Microsoft Stock Hits All-Time High On AI Software Pricing

“Copilot jump-starts your creativity in Microsoft Word, analyzes data in Excel, designs presentations in PowerPoint, triages your Outlook inbox, summarizes meetings in Microsoft Teams—whether you attended or not—and so much more,” Microsoft said in its announcement.

Microsoft shares jumped 4% on Tuesday, to $359.49, a record high close. Earlier in the session, shares set an intraday record high of $366.78.

Bernstein analyst Mark Moerdler points out in a research note on the news that the price for 365 Copilot is higher than he’d expected—and amounts to a price increase of 53% to 240%, depending on which version of Microsoft 365 a particular customer is using.

Moerdler noted that the announcement focused on Microsoft 365, and not on the more-limited set of tools and software included in Office 365.

“The company may believe this is a further way of driving not only new subscriptions” but also shifting more users to Microsoft 365, which has a higher per-user price.

The company also announced that it will offer a stand-alone chatbot app for business customers—Bing Chat Enterprise—for $5 per user per month.

Wedbush analyst Dan Ives writes that he finds the pricing announcement to be “very bullish for the total addressable cloud AI market opportunity for Microsoft,” with the potential to boost annual cloud revenue by 20% as soon as 2025.

Citi analyst Tyler Radke likewise wrote that pricing was well above his own forecast of $5 to $20 a month. “While general availability is still likely many months away, we see this as an incremental positive,” he writes.

Write to Eric J. Savitz at eric.savitz@barrons.com