Survey Reveals Microsoft and Others to Benefit from AI Adoption
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 18 2026
0mins
Should l Buy MSFT?
Source: seekingalpha
- AI Budget Allocation: Jefferies' survey of 30 CIOs revealed that enterprises allocate an average of 8.7% of their total IT budget to AI tools and features, with 63% operating with a dedicated AI budget, indicating a significant shift towards prioritizing AI initiatives and enhancing demand for related software companies.
- Beneficiaries Identified: The survey identified cloud service providers, such as Amazon, Microsoft, and Google, as the biggest beneficiaries of AI adoption, with 33% of respondents selecting this category, followed closely by foundation model labs like OpenAI and Anthropic, suggesting a strengthening market position for these companies in the AI landscape.
- Risk Assessment: Adobe and Docusign were highlighted as the companies most at risk of being displaced by AI in the next five years, with 40% of respondents indicating significant risk, reflecting CIO sentiment regarding AI's impact while also emphasizing the innovation opportunities for incumbents.
- Application Software Vulnerability: Analysts noted that application software appears more vulnerable to AI disruption compared to infrastructure software, with companies like Atlassian, Workday, and Salesforce mentioned as having over a 50% chance of being replaced by AI in the next five years, indicating cautious market sentiment towards their future prospects.
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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: 369.370
Low
500.00
Averages
631.36
High
678.00
Current: 369.370
Low
500.00
Averages
631.36
High
678.00
About MSFT
Microsoft Corporation is a technology company. The Company develops and supports software, services, devices, and solutions. The Company’s segments include Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. The Productivity and Business Processes segment consists of products and services in its portfolio of productivity, communication, and information services. This segment primarily comprises: Office Commercial, Office Consumer, LinkedIn, and Dynamics business solutions. The Intelligent Cloud segment consists of server products and cloud services, including Azure and other cloud services, SQL Server, Windows Server, Visual Studio, System Center, and related Client Access Licenses (CALs), and Nuance and GitHub; and Enterprise Services, including enterprise support services, industry solutions and Nuance professional services. The More Personal Computing segment primarily comprises Windows, Devices, Gaming, and search and news advertising.
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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- Market Sell-Off Analysis: The recent sell-off is one of the largest in Microsoft's history, prompting investors to assess whether this decline is justified or represents a once-in-a-decade buying opportunity, particularly if geopolitical stability improves, which could lead to a significant stock price increase.
- Valuation Metrics Near Lows: Both the price-to-earnings ratio and operating earnings ratio indicate that Microsoft's valuation is approaching decade lows, suggesting that the current stock price may be undervalued, making it an attractive buying opportunity for investors.
- Future Earnings Expectations: Microsoft is expected to report its next quarterly earnings in April, with market sentiment suggesting this could act as a catalyst for stock price appreciation, especially given the company's ongoing investments in AI and cloud computing.
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- Shift to Multi-Model Strategy: Recognizing the ineffectiveness of Copilot's reliance on OpenAI models, Microsoft has pivoted to a multi-model agentic approach, introducing new features like Council and Critique aimed at enhancing user experience and strengthening Copilot's competitiveness in the enterprise AI tool market.
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See More
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- Market Reaction Analysis: The video published on April 4, 2026, highlights investor interest in both companies, particularly in the current economic climate where investors are inclined to favor companies with stronger growth potential.
- Investor Decision Factors: When selecting investment targets, investors must consider factors such as financial health, market share, and future growth potential, as these will directly impact investment returns.
- Future Outlook: Although both companies exhibit solid market performance, investors should closely monitor their financial reports and market dynamics to make informed investment decisions.
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- Market Performance Analysis: Stock Advisor's total average return of 926% significantly outperforms the S&P 500's 185%, reflecting the effectiveness of its stock selection strategy and market outperformance.
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See More
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- Strategic Shift: Microsoft is transitioning Copilot to a multi-model agentic product, introducing new features like Council and Critique aimed at enhancing user experience and increasing market appeal, which could improve its performance among enterprise users.
- Stock Price Volatility: Microsoft shares currently trade at 23 times its trailing 12-month earnings, about 30% below its 10-year average, reflecting market concerns over future growth; however, analysts project a long-term annual growth rate of 13% to 14%, suggesting potential value for investors.
- Dependency on OpenAI Risks: With approximately 45% of its commercial bookings tied to OpenAI, Microsoft faces significant risks; however, the market has substantially lowered its valuation, potentially offering a buying opportunity for investors, especially as the company continues to see earnings growth.
See More
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- Optimistic Guidance: Management anticipates a 9% sequential revenue increase in the first quarter, projecting adjusted EPS of $0.79, indicating sustained growth potential in AI infrastructure, particularly within the data center segment.
- Collaboration with Nvidia: Nvidia's announcement of a $2 billion investment in Marvell, coupled with a product partnership, is expected to enhance Marvell's market position in AI infrastructure, particularly in the application of photonic networking technologies.
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See More
