A microsoft corp MSFT the analyst said on Thursday He’s “more optimistic” about the prospects for the company.

The Microsoft Analyst: Wedbush analyst Daniel Ives kept an Outperform rating on the stock and increased its price target to $340 from $325.

The stock remains on Webush’s “Best Ideas List,” the analyst said.

The Microsoft thesis: Monetization opportunities around the use of AI and ChatGPT in the cloud represent a transformative opportunity across the industry, with Microsoft being the driving force, analyst Ives said in a note. The analyst based the conclusion on queries from Microsoft customers and partners, as well as his field testing.

“We believe Microsoft is in a unique position to gain market share in the cloud market while deploying additional AI capabilities,” the analyst said. He estimates that as a result, the company’s total addressable market around the cloud could grow by 35-40% in the coming years.

“In this Game of Thrones battle for AI market share, we view the company as a golden opportunity as we estimate the AI ​​market opportunity will reach an $800 billion market in the next decade,” said Ives.

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The analyst expects others like Alphabet, Inc. Google GOOG, Oracle Corp. ORCL, Salesforce, Inc. CRM And IBM Corp. IBMto benefit from it too.

““ChatGPT will be the next leg of the growth stool for MSFT,” said the analyst. He anticipates that the cloud and the underlying Office 365/Windows ecosystem will become an ever larger part of the enterprise in the future. This will ultimately spur growth and margins in fiscal 2023 and 2024 despite this downturn, he said.

ChatGPT/AI monetization in both the consumer and enterprise space combined will likely increase the company’s valuation by $25-$30 per share, he added.

price action: In premarket trading, Microsoft shares are down 0.36% to $311.20, according to data Benzinga Pro dates.

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