Why These Magnificent 7 Stocks Hit All-Time Highs

microsoft (NASDAQ:MSFT) stock soared on Thursday after the company announced the launch of a new product to help information technology and security professionals do their jobs better.

Microsoft’s Copilot for Security is billed as the first generative artificial intelligence (GenAI) solution for the cybersecurity industry. Wall Street analysts are optimistic about the launch of this new product, seeing it as another growth vehicle within the company’s portfolio of AI-based products.

Microsoft stock hit an all-time high of $427 per share Thursday morning, but later fell to about $417 per share on Friday. Year to date, Microsoft stock is up about 13% and is up 52% ​​over the past 12 months.

Given the stock’s surge to record highs, investors may be wondering if it’s too late to buy the stock.

Analysts remain optimistic about Microsoft.

Copilot for Security, scheduled to launch April 1, is designed to address threats faster and more accurately with features informed by the more than 78 trillion security signals Microsoft processes every day. Experienced security experts who used the product during the testing phase said it was, on average, 22 times faster and 7 times more accurate than previous systems. In fact, 97% said they would like to use Copilot for security the next time they perform the same task.

The software features a pay-as-you-go licensing model, making it more accessible than other products because you are billed based on frequency of use. This approach allows users to manage their usage and control costs more efficiently according to their needs and budget. Copilot for Security can process and respond in eight languages, has a multilingual interface for 25 languages, and will be available globally.

Several analysts weighed in on the news. The pricing model should foster rapid adoption, Wells Fargo (NYSE:WFC) analysts said in a research note. They also expect the Azure platform to add incremental revenue growth in Microsoft’s fiscal fourth quarter, which ends June 30, and in fiscal 2025. Wells Fargo analysts maintained an overweight rating on Microsoft and increased their price target to $460. 10% higher than the current stock price.

According to Investors Business Daily, Mizuho Securities analyst Gregg Moskowitz took a similar stance, saying the pricing model “will (initially) provide enterprises with a low-cost opportunity to pursue interesting cybersecurity use cases.” We maintained a buy rating and target price of $450.

JPMorgan Chase (NYSE:JPM) analyst Mark Murphy believes this GenAI product will bring a “paradigm shift” to Microsoft’s security capabilities. He also believes that Copilot for Security is what sets the company apart in the market. Murphy reaffirmed his overweight rating and $440 price target on Microsoft.

Is Microsoft still a buy?

Microsoft’s leadership position in GenAI has driven its bottom line significantly over the past few years, and in its last earnings report, CEO Satya Nadella said the company was only scratching the surface.

“We’ve moved from talking about AI to applying AI at scale,” Nadella said on the company’s fiscal second-quarter earnings call Jan. 30. “By infusing AI into every layer of our technology stack, we are reaching and helping new customers, driving new benefits and increased productivity across all sectors.”

Copilot for Security appears to be an example of such a strategy.

Typically, when a stock competes at as high a level as Microsoft over a period of a year or so, it can raise red flags for its valuation. However, Microsoft is still relatively decently valued at 31x future earnings, which is higher than the S&P 500 average. But Microsoft can certainly earn more than the average S&P 500 company.

Microsoft stock fell slightly on Friday after hitting an all-time high on Thursday. Shares fell 2% on the day to about $417 per share, which is probably not a bad thing. Considering the company’s outlook and strength in AI, analysts’ price targets seem quite reasonable.