Microsoft’s (MSFT) newly announced Frontier suite version of Microsoft 365 should boost the tech giant’s agentic artificial intelligence offerings, Morgan Stanley said, while at the same time increasing its AI monetization efforts.
“While Microsoft has seen strong momentum across the entire platform (not just GenAI) and continues to aggressively integrate AI across its product portfolio, Microsoft 365 Copilot and E5 upgrades (driven by security) remain the key drivers of average revenue per user (ARPU) growth, with the new Agent 365 another potential growth lever going forward,” analyst Keith Weiss wrote in a note to clients. “These drivers align well with our latest CIO survey results on multiple fronts: 1) Upticking O365 Spending Intentions; 2) Clear Mix-Shift Towards Higher O365 Subscriptions; 3) Increasing CIO Intentions to Leverage Microsoft’s Generative AI products; and 4) Improving M365 Copilot Penetration Levels.”
Weiss has an Overweight rating and a $650 price target on Microsoft.
