Microsoft 's investment in OpenAI should offer "significant underappreciated upside" for the big technology stock in the months ahead, according to D.A. Davidson. The firm initiated coverage of the tech bellwether with a buy rating and $270 price target, viewing its investment in the research company, which operates ChatGPT, as a potential short-term catalyst for shares that help support its premium valuation.
The "value-creation" opportunities ChatGPT offers both Microsoft's Bing and Azure products have yet to materialize in the company's current share price, but should support advertising, cloud and search growth, Luria said. "Furthermore, we believe Google will need to face a major case of innovator's dilemma in deciding to incorporate generative AI into Search, thus significantly disrupting its current ad selling model," he wrote.
Google is better off branded as fisher-price.