AI Could Lower Oil Prices Via Improved Logistics And Resource Allocation: Goldman Sachs
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Sep 04 2024
0mins
Should l Buy MSFT?
Source: Benzinga
Impact of AI on Oil Prices: Goldman Sachs predicts that AI could lower oil prices over the next decade by reducing costs and increasing recoverable resources, potentially leading to a $5/bbl decrease in marginal incentive prices despite a modest increase in oil demand.
Market Sentiment and OPEC Production: Recent data shows that 8 OPEC+ members plan to boost production by 180,000 barrels per day, contributing to bearish market sentiment as Brent crude oil prices fell to $77.21 per barrel amid weakening demand indicators from major economies.
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Analyst Views on MSFT
Wall Street analysts forecast MSFT stock price to rise
34 Analyst Rating
32 Buy
2 Hold
0 Sell
Strong Buy
Current: 401.840
Low
500.00
Averages
631.36
High
678.00
Current: 401.840
Low
500.00
Averages
631.36
High
678.00
About MSFT
Microsoft Corporation is a technology company that develops and supports software, services, devices, and solutions. Its Productivity and Business Processes segment consists of products and services in its portfolio of productivity, communication, and information services, spanning a variety of devices and platforms. It comprises Microsoft 365 Commercial products and cloud services; Microsoft 365 Consumer products and cloud services; LinkedIn, and Dynamics products and cloud services. The Intelligent Cloud segment consists of its public, private, and hybrid server products and cloud services. It comprises server products and cloud services, including Azure, and enterprise and partner services, including Enterprise Support Services. Its More Personal Computing segment primarily comprises Windows and Devices, including Windows OEM licensing; Gaming, including Xbox hardware and Xbox content; Search and news advertising, comprising Bing and Copilot, Microsoft News, and Microsoft Edge.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Revenue Potential Outlook: Should Microsoft achieve another 160% growth in users over the next year, it could generate an additional $8.6 billion in revenue, which represents nearly 3% of its projected $328 billion revenue for fiscal year 2026, highlighting Copilot's commercial value.
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- User Growth Data: Microsoft revealed that Copilot reached 15 million paying users in its latest earnings call, reflecting a 160% year-over-year growth, although this figure appears small compared to its 450 million Microsoft 365 paid users, indicating potential market demand.
- Market Competition Analysis: While Copilot's conversion rate stands at approximately 3.3%, lower than ChatGPT's 5%, Microsoft's existing user base provides a solid opportunity for future growth through cross-selling, especially as AI tools become more mainstream.
- Revenue Potential Outlook: Should Microsoft achieve another 160% growth in users over the next year, it could generate an additional $8.6 billion in revenue, which represents nearly 3% of its projected $328 billion revenue for fiscal year 2026, highlighting Copilot's commercial value.
- Strategic Positioning and Competitive Advantage: With significant equity stakes in both OpenAI and Anthropic, Microsoft can leverage AI to enhance Microsoft 365's competitiveness, thereby maintaining its leadership in the office software market and mitigating competitive pressures in the future.
See More
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- Cloud Competition: Microsoft faces fierce competition in the cloud computing sector from Amazon and Alphabet, with Azure's revenue growth of 39% lagging behind Google Cloud's 48%, indicating market share pressures.
- Rising Infrastructure Costs: The company's increasing infrastructure costs have raised concerns among investors, as CFO Amy Hood noted a direct correlation between capital expenditures and Azure's revenue, potentially impacting future returns on investment.
- Stock Valuation Decline: Microsoft's price-to-earnings (P/E) ratio has fallen to 25, nearing its lowest level in three years, reflecting market caution regarding its growth prospects, despite analysts' price target of $596 suggesting a 48% upside.
- Investor Sentiment Weakens: Following the earnings report on January 28, Microsoft's stock has dropped 16%, leading to investor doubts about the returns from its AI infrastructure investments, although the low valuation may present a buying opportunity in the long run.
See More
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- Inflation Data Eases: The U.S. Consumer Price Index rose 2.4% year-on-year in January, down from 2.7% in December, indicating a potential easing of inflation pressures, which could influence the Federal Reserve's interest rate decisions.
- Core CPI Insights: The core CPI registered at 2.5%, marking the lowest level since April 2021, aligning with economists' expectations, suggesting that inflation may be gradually coming under control, which is favorable for market sentiment.
- Cautious Market Reaction: Despite the positive inflation data, major U.S. indexes experienced slight declines on Friday, reflecting ongoing investor uncertainty regarding the impacts of artificial intelligence, leading to a cautious market atmosphere.
- International Relations Improvement: Signs of easing tensions between the U.S. and Iran emerged as both sides prepare for a second round of talks in Geneva, with Iran expressing readiness to discuss nuclear program restrictions in exchange for economic benefits, potentially creating a positive market impact.
See More
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- Market Validation: The AI Impact Summit in India has attracted CEOs from tech giants like Nvidia, OpenAI, and Alphabet, highlighting the global business community's recognition of India's market potential, which is expected to drive future investments and collaborations.
- Infrastructure Investment: With rising demand for AI data centers, significant infrastructure investment deals are anticipated, further solidifying India's position as a global hub for AI technology.
- Talent Attraction: India is regarded as an 'AI talent factory,' with over 60% of Global Capability Centers focusing on AI and data development, and 80% of new centers projected to be AI-led in the next six to eight months, indicating a strong demand for tech talent.
- Executive Position Growth: An increasing number of firms are establishing senior leadership roles, such as 'Chief AI Officer,' in India, reflecting a reliance on local talent and a focus on the AI sector, which enhances competitiveness in the global market.
See More
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- New Position Established: Harvard Management Co. has established a new position in the iShares Ethereum Trust ETF by acquiring 3,870,900 shares, with an estimated transaction value of $86.82 million, indicating a sustained interest in the digital asset market.
- Asset Allocation Proportion: This investment represents 4.18% of Harvard Management's reportable U.S. equity assets as of December 31, 2025, highlighting its significance within a diversified investment portfolio.
- ETF Performance Analysis: As of February 14, 2026, the Ethereum ETF's share price stands at $15.44, reflecting a 23.90% decline over the past year, underperforming the S&P 500 by approximately 35%, which indicates market caution towards this asset.
- Long-term Investment Strategy: Harvard's investment portfolio includes 19 positions with total reportable assets of $2.08 billion, demonstrating a strategic focus on diversification and long-term growth potential.
See More
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- Significant Investment: Harvard Management recently acquired 3.87 million shares of the iShares Ethereum Trust ETF (ETHA), with an estimated transaction value of $86.82 million, indicating its ongoing commitment to the digital asset market.
- Diversified Asset Allocation: This investment represents 4.18% of Harvard Management's 13F reportable assets, highlighting its focus on cryptocurrency, particularly the potential of Ethereum within a diversified investment portfolio.
- Market Performance Comparison: Despite ETHA's 41.32% decline since inception, while the iShares Bitcoin ETF (IBIT) has risen approximately 40% since January 2024, Harvard Management remains optimistic about the long-term outlook of the crypto market, viewing ETHA as a viable investment option.
- Portfolio Management Expertise: Harvard's investment portfolio holds only 19 assets across various sectors, including commodities, real estate, technology, and cryptocurrencies, demonstrating its professional capabilities in risk management and yield optimization.
See More
