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Microsoft (MSFT) stock rose Wednesday after the software giant added artificial intelligence technology to its cybersecurity offerings. MSFT stock returned to the buy zone of its recent breakout on the news.
On Tuesday, Microsoft announced the launch of Microsoft Security Copilot, a new tool for enterprises to quickly detect and respond to threats and better understand the threat landscape.
Microsoft described Security Copilot as a “generative AI security product” that takes advantage of Microsoft’s vast threat intelligence footprint. It said the AI assistant will help cybersecurity professionals keep ahead of threats.
Security Copilot is the latest example of Microsoft infusing its products with artificial intelligence following its partnership with OpenAI.
On Feb. 7, Microsoft added generative AI to its Bing search engine and Edge browser. Then on March 16, it introduced Microsoft 365 Copilot, which added AI tools to its popular Office productivity applications.
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On the stock market today, MSFT stock rose 1.9% to close at 280.51.
With the advance, Microsoft returned to the buy zone of its March 17 breakout from a flat base. MSFT stock has traded just in and out of the 5% buy zone, which runs from 276.86 to 290.70, according to IBD MarketSmith charts.
Earlier Wednesday, KeyBanc Capital Markets analyst Michael Turits reiterated his overweight, or buy, rating on MSFT stock and raised his price target to 316 from 270.
In a note to clients, Turits said Microsoft’s early leadership in artificial intelligence is an opportunity to drive long-term growth for its Azure cloud infrastructure business. It also should boost sales for its applications and stand-alone AI services, he said.
JPMorgan analyst Mark Murphy reiterated his overweight, or buy, rating on MSFT stock on Wednesday. He has a price target of 305 on Microsoft shares.
In a note to clients, Murphy said he was impressed by Microsoft’s AI advancements in cybersecurity.
“We have consistently called out the strength of Microsoft’s security portfolio evident in our survey work,” Murphy said. “Security remains an underappreciated growth opportunity for Microsoft longer term, particularly given the depth of its AI models and massive volume of data signals.”
Murphy noted that Microsoft stock has been pressured by slowing growth in its Azure business. But other cloud computing players are facing the same issue.
“We continue to see Microsoft as the best house in a temporarily deteriorating neighborhood, while the fundamental trends of modernization and automation remain intact long term,” he said.
MSFT stock has an IBD Composite Rating of 94 out of 99, according to IBD Stock Checkup. That means Microsoft is in the top 6% of stocks on key fundamental and technical measures.
Also, Microsoft stock is in the IBD Long-Term Leaders Portfolio.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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