Wall Street analysts upbeat on Microsoft's Bing and Edge ChatGPT integration

© Reuters

By Sam Boughedda

After Microsoft (NASDAQ:MSFT) introduced its new AI-powered Bing and Edge offerings, which it said is "reinventing search," Wall Street analysts reacted extremely positively.

Microsoft said Tuesday that it is launching an all-new, AI-powered Bing search engine and Edge browser to "deliver better search, more complete answers, a new chat experience and the ability to generate content."

The tech giant stated that it thinks of the tools as an AI copilot for the web.

Oppenheimer analysts raised the firm's price target to $280, maintaining an Outperform rating on the stock, stating that the move to integrate ChatGPT was "well-telegraphed" and they see Microsoft as "structurally advantaged to leverage OpenAI, as well as its own technology, sustaining its core while disrupting adjacencies."

Bernstein analysts said these are "the first green shoots of the OpenAI partnership."

"This is only the beginning, and we believe more use cases will come relatively quickly," said the analysts, who have an Outperform rating on Microsoft. "This will drive both top-line and bottom-line growth, and while margins may grow incrementally slower, the AI platform Microsoft has built will deliver margin improvement as it scales."

Wolfe Research analysts titled their research note "MSFT - Hey Google, We're Bing-ing the p(AI)n."

"MSFT has been investing ahead of this for years, can spread the cost along the entire product portfolio, and is planning a number of monetization pathways," wrote the analysts, who maintained an Outperform rating on Microsoft. "We believe that the ubiquity of the AI value prop across the MSFT product portfolio creates incremental monetization opportunity on nearly every product, and while any individual one is not likely to be a magnitude increase in incremental dollars added (except Search) they are all potentially gross profit accretive across the product stack."

Microsoft shares are up more than 1% Wednesday.