Microsoft Leads AI Revolution, Cloud Growth Fuels Upside Despite Competitive Risks
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Microsoft is at the forefront of the AI revolution through its strategic partnership with OpenAI, enabling it to add unmatched AI capabilities across its offerings.
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Revenue growth is being driven by Microsoft's cloud segment, Intelligent Cloud, which grew 17% YoY in FY2023 and accounts for over 40% of total revenue.
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Microsoft competes with Amazon and Google in the $1.3 trillion AI industry expected to grow 37% CAGR through 2030.
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DCF analysis suggests Microsoft stock has 14% upside potential and is attractively valued.
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Risks include profit-taking at current high valuations, potential cyberattacks, and loss of competitive edge in AI technology.