Bullish Microsoft Analysts Say AI Spending Worries Are Overblown [Video]

Despite Microsoft’s (MSFT) earnings beat, worries about weaker-than-expected cloud growth and spending on artificial intelligence (AI) sent shares lower in the wake of the company’s quarterly update.

Bullish analysts say those concerns could be overblown, citing the company’s potential to gain from AI.

The tech giant’s shares lost a bit more than 1% to close at $418.35 Wednesday. The stock has gained over 11% since the start of the year. Analysts are broadly bullish on the shares, with a mean target price above $500 according to Visible Alpha.

Despite “a lackluster end to an otherwise strong” fiscal year, Mizuho analysts said they believe Microsoft’s medium- and longer-term revenue growth opportunities are “greater than many realize,” citing opportunities in generative AI.

Deutsche Bank analysts wrote that Microsoft is “leading the charge” in AI monetization with its Azure AI services and revenue set to grow as the company raises capacity.

In Microsoft’s earnings call …