Evercore ISI analyst Kirk Materne this morning raised his price target for Microsoft to $106 from $93 and reiterates an Outperform rating on the shares. The software giant in premarket trading is up 75c to $83.24. The analyst sees a "visible path" to Microsoft reaching a market capitalization of $1 trillion, or $128 per share, by 2020, if not sooner. Azure and O365 could grow to $49B in revenue by fiscal 2021, and Microsoft can generate $115B in cumulative free cash flow over the next three years, Materne tells investors in a research note. The analyst believes Azure is well positioned to help power Microsoft's revenue and free cash flow growth over the next five years.

Conduent (CNDT) announced an innovation initiative with Microsoft (MSFT) that will use Microsoft Azure OpenAI Service to bring the power of generative AI to drive quality, productivity and faster cycle times for Conduent's global clients. The innovative initiative initially is exploring generative AI implementation in healthcare claims management, customer service platforms and fraud detection, with three pilots underway. By integrating generative AI into its client offerings and internal operations, Conduent builds on its longstanding history of delivering technologies and solutions that improve client operating and cost performance, enhance customer experience and optimize business processes..."With a heritage built on helping our clients improve their business performance through technologies such as automation, machine learning, and digitalization, we are excited to collaborate with Microsoft to develop the next generation of business solutions that will be powered by generative AI," said Cliff Skelton, Conduent President and Chief Executive Officer. "We are focused on harnessing the potential of generative AI to further advance our solutions and capabilities leading to improved quality, efficiency and productivity for our clients and in our own operations." "

Microsoft (MSFT), Meta (META), and Alphabet (GOOGL) disclosed last week that they had spent more than $32B combined on data centers and other capital expenses in Q1, as they accelerate AI spending, The New York Times' Karen Weise reports. The companies all said in calls with investors that they had no plans to slow down their AI spending, Weise writes. Reference Link

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