microsoft (NASDAQ: MSFT) has emerged as a leader in the artificial intelligence (AI) market and is attracting significant attention. But analysts say the company’s advertising opportunities may be undervalued. barclays.
On Wednesday, the company maintained an “overweight” rating, with a price target of $475 and an approximately 17% upside from the current share price of $407.
Microsoft’s $50 billion advertising opportunity
Microsoft’s Bing search engine is gaining market share. alphabetGoogle. Analysts say this is leading to higher revenue, but it’s only the beginning.
Barclays argues that Microsoft could eventually rake in $50 billion in advertising revenue across search, LinkedIn and advertising technology, but that this would be less than a quarter of the company’s annual revenue. There is. By comparison, Google’s advertising revenue totaled $65 billion last year.
Barclays says Microsoft will need to invest more in distributing its Bing search engine to seize this opportunity, but Bing is already showing momentum after releasing new AI capabilities last year. In January, Microsoft announced that users had created 5 billion images and chats using a new feature that leverages generative AI. This is a significant increase compared to his 1 billion chats created through July.
Reasons to buy Microsoft stock
AI is driving Microsoft’s growth in a variety of areas, not just its Azure enterprise cloud business. Management previously said that its AI-powered Copilot features are “reshaping daily search and web habits.” This statement suggests that the company is targeting Google.
If Microsoft continues to gain search share, it will provide new growth avenues to boost its stock price over the next decade.
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Suzanne Frey, an Alphabet executive, is a member of the Motley Fool’s board of directors. John Ballard has no position in any stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Microsoft. The Motley Fool recommends Barclays Plc and recommends the following options: A long January 2026 $395 call on Microsoft and a short January 2026 $405 call on Microsoft. The Motley Fool has a disclosure policy.
Microsoft stock is on track to rise 17%, according to one Wall Street analyst, according to The Motley Fool
