Microsoft slips even as Wall Street is impressed by Copilot pricing
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Microsoft (NASDAQ:MSFT) shares fell on Wednesday even as several Wall Street analysts praised the U.S. tech for the announcements made at its Inspire conference, including pricing of its AI tool, Copilot.
Mizuho Securities analyst Gregg Moskowitz said the news of the $30 per user per month add-on for Microsoft 365 Copilot could boost revenue by fiscal 2025 by as much as $9B, assuming 20% of customers sign-up for the voluntary add-on, or $19B, if 40% of them do.
Moskowitz, who also boosted his per-share price target to $420 from $390 following the news, added that Mizuho is confident on the company's growth opportunities, including "significant" monetization of its generative artificial intelligence capabilities.
Barclays analyst Raimo Lenschow wrote in an investor note that the pricing announcement "suggests that the product is finally ready for prime time" and that it is a "major next step for MSFTâs AI monetization." 
TD Cowen analyst Derrick Wood, who also boosted his per-share price target on Microsoft (MSFT) to $390 from $330, said that he expects Microsoft's (MSFT) generative AI capabilities to offset some mixed demand data points. 
Morgan Stanley analyst Keith Weiss said the pricing, which came in higher than expected, allows Microsoft (MSFT) to show its "compelling" value for customers.
Unveiled at its virtual Inspire conference, Microsoft (MSFT) said the $30 per user per month cost will be for its E3, E5, Business Standard and Business Premium customers. These customers have monthly plans that range between $12.50 and $57 per user per month.
Current E3 users pay roughly $36 per user per month for Office 365, effectively making Copilot an 83% increase for that tier of customers.
Amid concerns about the steep price hike, Copilot is a voluntary upgrade, Microsoft, which has been testing Copilot with at least 600 customers since it was unveiled in March, added.
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