OpenAI's Advertising Pricing Strategy and Market Competition

Written by Emily J. Thompson, Senior Investment Analyst

MSFT+1.54%

Source: seekingalpha

Updated: 1h ago

0mins

Source: seekingalpha

Advertising Pricing Strategy: OpenAI plans to sell ads at approximately $60 per 1,000 views, a price point comparable to premium video programs like the NFL, indicating its competitive stance in the advertising market.
Lack of Data Transparency: Unlike Meta and Google, OpenAI has not yet provided detailed metrics on ad performance, although it may introduce more sophisticated ad tools in the future, which could impact advertisers' investment decisions.
Revenue Goals: OpenAI aims to generate $11 billion in annual revenue from its advertising business by next year, highlighting the urgency of creating revenue streams from non-paying users.
Shopify Integration: OpenAI's partnership with Shopify allows U.S. merchants to sell products directly through ChatGPT, with a 4% commission on completed sales, providing a new revenue avenue for the company.

MSFT

$473.14+Infinity%1D

Analyst Views on MSFT

Wall Street analysts forecast MSFT stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for MSFT is 631.36 USD with a low forecast of 500.00 USD and a high forecast of 678.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.

34 Analyst Rating

32 Buy

2 Hold

0 Sell

Strong Buy

Current: 465.950

Low

500.00

Averages

631.36

High

678.00

Current: 465.950

Low

500.00

Averages

631.36

High

678.00

UBS

Buy

maintain

$650 -> $600

2026-01-23

New

Reason

UBS

Price Target

$650 -> $600

AI Analysis

2026-01-23

New

maintain

Buy

Reason

UBS lowered the firm's price target on Microsoft to $600 from $650 and keeps a Buy rating on the shares. The continued ramp of Microsoft's large Fairwater AI data centers in Atlanta and Wisconsin is emerging as a key near-term catalyst for Azure growth, with the Wisconsin site coming online in Q1, the analyst tells investors in a research note. Progress at the Wisconsin build-out supports a higher Azure growth outlook ahead of Microsoft's January 28 earnings report, UBS says.

Citi

Buy

downgrade

$690 -> $660

2026-01-21

New

Reason

Citi

Price Target

$690 -> $660

2026-01-21

New

downgrade

Buy

Reason

Citi lowered the firm's price target on Microsoft to $660 from $690 and keeps a Buy rating on the shares. Citi's reseller survey and partner data points were "more mixed" into Microsoft's fiscal Q2 results, the analyst tells investors in a research note. Citi expects an Azure beat in Q2 but reduced estimates for Microsoft's non-Azure businesses on weaker PC forecasts. The stock remains a top mega-cap idea at Citi.

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Rothschild & Co Redburn

Alex Haissl

Neutral

downgrade

$500 -> $450

2026-01-21

New

Reason

Rothschild & Co Redburn

Alex Haissl

Price Target

$500 -> $450

2026-01-21

New

downgrade

Neutral

Reason

Rothschild & Co Redburn analyst Alex Haissl lowered the firm's price target on Microsoft to $450 from $500 and keeps a Neutral rating on the shares.

Mizuho

Outperform

NULL

downgrade

$640 -> $620

2026-01-21

New

Reason

Mizuho

Price Target

$640 -> $620

2026-01-21

New

downgrade

Outperform

NULL

Reason

Mizuho lowered the firm's price target on Microsoft to $620 from $640 and keeps an Outperform rating on the shares. The firm adjusted targets in large-cap software as part of a Q4 earnings preview. Channel checks were solid overall, with public cloud data points were "generally good" and AI adoption "very strong," the analyst tells investors in a research note. However, Mizuho says some of its checks noted more moderate budget flush activity than usual. In addition, growing investor concerns about AI disruption :continue to decimate many software company multiples," the firm contends. It cites recent multiple compression for the target cuts.

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.