AI monetization

Microsoft

2026-07-31 07:02:41

Citi lifts Microsoft target to $600 after Azure growth hits 43% and Copilot seats top 30 million

Microsoft’s latest quarterly results pushed back against a bearish view that had centered on the cost side of AI investment, according to a July 30 note from Citi. The bank raised its price target on Microsoft to $600 from $570 and kept its Buy rating after the company reported revenue and profit ahead of expectations, with both Azure and Copilot showing faster momentum. Citi said Azure revenue growth reached 43% year over year in the quarter, above the market’s 40% expectation and up from 39% in the prior quarter. Management then guided to roughly 45% Azure growth in the next quarter. Citi raised its FY27 Azure growth forecast by about 3 percentage points to 45.5%, arguing the acceleration came from better deployment efficiency and improved fleet utilization rather than a change in capacity allocation. On the software side, Microsoft said paid Copilot seats surpassed 30 million, above Citi’s 28 million estimate, with net additions of 10 million in the quarter. Citi linked that jump to strong year-end sales execution and broader customer adoption supported by discounts for large deployments. The note said the market had mostly focused on capital spending before, but is now starting to see AI monetization show up in revenue and earnings.

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Google

2026-07-24 04:38:40

Google’s Q2 cloud revenue jumps 82% as JPMorgan says AI spending is starting to pay off

Google posted a strong second-quarter report, with cloud revenue rising 82% year over year to $24.77 billion, search and other revenue up 17%, and TPU revenue topping $1 billion in a single quarter for the first time, according to JPMorgan’s estimates. The bank said the results show Google’s AI spending is moving beyond a heavy investment phase and into a period of revenue realization. The company also raised its 2026 capital expenditure guidance to a range of $195 billion to $205 billion, up from $180 billion to $190 billion, and warned that spending would continue to rise materially in 2027. JPMorgan now projects 2027 capex at $378 billion, up 85% year over year, while maintaining an Overweight rating and a $420 price target based on 25x its 2028 GAAP EPS estimate of $16.66. JPMorgan argued that the higher capex outlook reflects customer demand rather than cost inflation. It also said margin pressure appears tied to temporary factors, including third-party compute rentals, TPU hardware mix, Wiz integration costs, accelerated depreciation, and legal expenses. If investors sell the stock on capex concerns, the bank said, that could create a buying opportunity.

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OpenAI

2026-07-23 17:25:16

OpenAI Rolls Out ChatGPT Ads Platform as Monetization Questions Grow

OpenAI has launched a self-serve ads platform for ChatGPT, targeting massive ad revenue by 2030. The challenge is that ads are shown mainly to free users, a group with weaker payment and purchase intent.

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