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Microsoft’s (MSFT) AI Push Could Be a $100B Business—Wells Fargo Explains

Microsoft Corporation (NASDAQ:MSFT) is one of 10 AI Stocks Making Waves on Wall StreetOne of the biggest analyst calls on Wednesday, June 25, was for Microsoft Corporation. Wells Fargo maintained its Overweight rating on the stock and raised the price target to $585 from $565. The firm focused on the company’s ‘AI Ambitions’, noting that it is ‘still early days.’

“We still see a bright future ahead for Microsoft, driven by continued growth prospects in huge categories of IT spend, ability to further monetize strong positioning in multiple end markets, and a financial profile that continues to exhibit durable margin expansion. We acknowledge shares are trading near historical highs, but think this is justified given its early AI lead and strong incumbent position in a tight market, esp. favorable in the current environment.”

-Wells Fargo analyst Michael Turrin.

A doctor in a laboratory, overseeing the development of Artificial Intelligence (AI).

According to Turrin, Microsoft’s AI business has the potential to reach $100 billion in revenue by fiscal 2029. The company has already scaled its AI business to $13 billion in annual recurring revenue in less than three years, which is it its “fastest product ramp ever,” despite significant capacity constraints.

The firm anticipated that the business nears $20B exiting fiscal year/June 2025 and accelerate further as constraints ease/capacity comes online.

It also expects a growing emphasis on Copilot, Microsoft’s AI assistant, looking ahead. Turrin believes that the application may reach critical mass by next year and bring in $12 billion in annual recurring revenue over time.

“Across the Microsoft 365 Commercial Cloud business we assume a total addressable population of 430M users between all user tiers. From this, we note that MSFT would only need to achieve ~10% adoption rate to reach the $10B annualized revenue run-rate mark, which also assumes an average ~20% discount.”

Microsoft Corporation (NASDAQ:MSFT) provides AI-powered cloud, productivity, and business solutions, focusing on efficiency, security, and AI advancements.

While we acknowledge the potential of MSFT as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 10 AI Stocks in the Spotlight and 10 Trending AI Stocks on Wall Street Right Now

Disclosure: None.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.

And this breakthrough has already set off a frenzy among hedge funds and Wall Street’s top investors.

What most investors don’t realize is that one under-owned company holds the key to this $250 trillion revolution.

In fact, Verge argues this company’s supercheap AI technology should concern rivals.

Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.

  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…

But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.

And judging by what I’m hearing from both Silicon Valley insiders and Wall Street veterans…

This prediction might not be bold at all:

A few years from now, you’ll wish you’d owned this stock.

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