MSFT
Microsoft’s trying to turn AI into a two-headed money machine
Microsoft already has the obvious AI story: Azure demand. But BNP Paribas says that’s only half the movie. The bank thinks Microsoft is building a second monetization layer through OpenAI revenue share and the shift toward consumption-based Copilot pricing.
That matters because pay-per-use software tends to be a sneaky little growth accelerator. If customers actually start leaning on Copilot the way they did on GitHub Copilot, BNP thinks Microsoft 365 growth could get an extra lift by the fiscal fourth quarter. In analyst-speak, that’s code for: “this could get juicier than people expect.”
The bullish math is doing a lot of heavy lifting
BNP now sees Azure growth hitting 46% in fiscal first-quarter 2027 and nearly 50% in the second quarter. It also raised its fiscal 2027 revenue and EPS estimates by 1% to 2%, while keeping Microsoft on an Outperform rating and nudging its price target to $604 from $549.
The key idea is pretty simple:
- Azure keeps humming on AI demand
- OpenAI-related economics add another layer of upside
- Copilot usage-based billing could quietly become a real revenue stream instead of a feature perk
Next stop: Ignite and the investor briefing
BNP also flagged Microsoft’s upcoming Ignite conference and a Financial Community Briefing on November 17th as possible catalysts. If Satya Nadella actually gets more specific about the company’s AI strategy and capital plans, investors could get another reason to bid the stock up.
Big picture: Microsoft is no longer just selling the shovels for the AI gold rush. It may also be charging admission to the mine.