Enterprise adoption of Microsoft Copilot continues to climb: Jefferies

Microsoft (NASDAQ:MSFT) Copilot continues to be adopted by enterprises at a decent clip and could reach $11B in revenue for the company during calendar year 2026, according to a recent survey by Jefferies.

The survey, which included 40 enterprises, found adoption of M365 Copilot had increased to 82% compared to 67% in September 2024. It also revealed that 80% of respondents planned to increase their spending on Microsoft products by 4% in 2025 and 2026.

As a result, Jefferies reiterated its Buy rating and $600 price target and named Microsoft as a “Top AI winner.”

“MSFT continues to underperform the iShares Expanded Tech-Software Sector ETF (BATS:IGV) by 3% since the release of ChatGPT, despite being a top enterprise AI winner,” said Jefferies analysts, led by Brent Thill, in a Tuesday note. “At just 31x cons CY26 EPS, risk/reward looks attractive with potential for AI rev to materialize over next 3yrs, providing upside.”

“Using conservative assumptions of 10%/17% of eligible M365 seats, our build indicates that M365 Copilot has the potential to drive $5.1B/$11.4B in CY25/CY26 rev,” the analysts noted.

The results support a recent survey of chief information officers by Morgan Stanley. It indicated that CIOs expect to increase their spending by an average of 6.3% year over year on Microsoft products.