Microsoft, Amazon, Google among AI software winners for 2025: Jefferies

Microsoft (NASDAQ:MSFT), Google (NASDAQ:GOOG) (GOOGL) and Amazon (NASDAQ:AMZN) are among the tech companies that are likely to be artificial intelligence-software winners next year, investment firm Jefferies said.

“MSFT is a primary beneficiary of [generative] AI, set to gain from both [infrastructure] (Azure AI) & app opportunities (various Copilots) but has underperformed the [iShares Expanded Tech-Software Sector ETF] IGV by 19% since ChatGPT’s release,” analysts at the firm wrote. “As Azure reaccelerates and Copilot’s momentum builds, we believe MSFT will rerate.”

Jefferies has a Buy rating and $550 price target on Microsoft.

Meta Platforms (NASDAQ:META) is also another expected generative AI beneficiary, given that it can introduce AI tools to roughly 4B users and more than 200M businesses across its various apps.

“META can further leverage Gen AI to unlock new monetization avenues outside of Advertising with Llama & WhatsApp,” analysts at the firm wrote.

Amazon has more than 50% of the cloud service provider market, which should enable “strong AI revenue potential over time,” Jefferies’ analysts said. They also upped their price target to $275 from $235 and kept their Buy rating on the stock.

Another AI software beneficiary is Snowflake (SNOW), with CEO Sridhar Ramaswamy (who took over in February) likely changing the company’s trajectory.

“We believe the business is headed for an inflection point in CY25 with strong backlog growth & increasing AI contribution supporting top-line growth and significant upside to margins over the next 2-3 yrs after hitting a trough in 2024,” the analysts wrote. They raised their price target on Snowflake to $200 from $180 and kept their Buy rating.

And last but not least, Google is seen as an AI pioneer and has more products coming that it can release to the seven apps that have more than 2B users each.

“The impressive performance of GOOGL’s models positions them to make significant strides in Cloud, where it currently lags peers,” Jefferies analysts wrote.