Club holdings Microsoft and Best Buy were the subject of upbeat Wall Street research, while TJX Companies hit an intraday high Friday on the same day it announced plans to enter a new international market. Here’s a closer look at the news and the implications for our investments. MSFT YTD mountain Microsoft (MSFT) year-to-date performance The news: Oppenheimer boosted Microsoft’s price target to $500 a share from $450, implying a nearly 18% rise from Thursday’s close. Analysts argued that Microsoft’s partnership with ChatGPT creator OpenAI “cannot be underestimated” and adoption of its artificial intelligence-related offerings will boost the stock’s price and company revenues. Oppenheimer predicted Microsoft will grab more share of the cloud-computing market and forecasted $50 billion in generative AI revenues in 2028, with around $36.2 billion tied to cloud-computing service Azure; AI-powered assistant tools Copilot and Github Copilot account for the remaining chunk of sales. In Microsoft’s fiscal third quarter ended in March, generative AI contributed $1 billion to Azure, according to Oppenheimer, which annualizes to $4 billion. The firm estimates Copilot revenue of $330 million this year. “Microsoft will regain a dominant platform role like its PC-era influence in a larger AI-driven market, and expand its multiple,” analysts wrote in a note dated Thursday. Also on Thursday, news hit that the Federal Trade Commission will start an antitrust investigation into Microsoft and OpenAI’s influence on the AI space, a source confirmed to CNBC. Microsoft shares are up slightly Friday, and have advanced 13.2% since the start of 2024. The Club take: We’ve long celebrated the Microsoft-OpenAI partnership because it’s given the Club holding a leading position in the heated AI arms race. Microsoft has introduced a number of promising offerings like Copilot, which the Club sees as a nice recurring revenue stream due to its monthly subscription cost. Meanwhile, the company’s recently announced AI-integrated Copilot+ PCs should be a boon for hardware sales as customers upgrade to the latest devices. Finally, we’re not concerned about the FTC’s regulatory inquiry. “What are they going to do, say ChatGPT shouldn’t have gone to them?” Jim said. “I’m not sure what their point is.” BBY YTD mountain Best Buy year-to-date performance The news: Loop Capital increased its Best Buy price target to $100 from $93 while maintaining its buy rating on the stock. A key reason for the hike is the retail analyst’s most-recent quarterly pricing survey found Best Buy’s price gap versus Amazon is narrowing. In fact, Loop said Best Buy was at “virtual price parity” with the e-commerce giant in three of five product categories in the survey: televisions, home theater and accessories. “Best Buy’s prices are 0.9% more expensive than Amazon’s on average, as compared to 1.5% more expensive in March,” according to Loop. The retail analyst also was encouraged by Loop’s tech hardware…
Read More: Best Buy, Microsoft get price-target hikes — plus, TJX plans to enter a new