Latest news with #NikolasKokovlis
Forbes
07-07-2025
- Business
- Forbes
MSFT Stock To $1,000?
The OpenAI logo appears on a smartphone screen and the Microsoft logo on a laptop screen as the ... More background in Athens, Greece, on July 4, 2025. Microsoft cuts up to 9,000 more jobs as it invests in AI. (Photo by Nikolas Kokovlis/NurPhoto via Getty Images) Microsoft's stock (NASDAQ:MSFT) has already achieved remarkable gains, increasing over 2x from $235 in early 2023 to about $500 now. What factors could drive the stock to double from its current value over the next few years? The answer is found in Azure and AI – the main growth engine for Microsoft. The company's AI strategy is yielding tangible results, with notable uptake of its AI-driven features across its product offerings. This momentum, especially in its cloud computing sector, positions Microsoft for significant future expansion as businesses progressively adopt AI solutions in their operations. On another note, if you seek an upside with a smoother experience than a single stock, you might explore the High Quality portfolio, which has outperformed the S&P 500, garnering >91% returns since its inception. Additionally, check out – SOUN Stock To $20? Microsoft is making a significant investment in its AI infrastructure, with capital expenditures expected to rise from approximately $44 billion in 2024 to over $80 billion in 2025. This considerable investment is largely driven by the growing demands of artificial intelligence. Azure is the primary beneficiary of this investment in AI infrastructure, experiencing over 30% growth that is anticipated to persist in the near future. However, Microsoft's integration of AI extends well beyond Azure. Hundreds of thousands of customers are already utilizing Microsoft 365 Copilot to transform their daily workflows. This represents a major transition for Microsoft, shifting from the sale of traditional software licenses to providing AI-driven productivity improvements, which command premium pricing and encourage deeper customer dependence. For instance, more than 230,000 organizations—including 90% of the Fortune 500—have already embraced Copilot Studio to create AI agents, indicating Microsoft's successful shift from pilot projects to widespread enterprise implementation. Revenue Acceleration Microsoft's Intelligent Cloud segment serves as the company's foremost revenue driver, producing roughly $105 billion in 2024 with impressive 20% growth. This segment is Microsoft's fastest-growing and highest-margin area, benefiting from its unique status as both a cloud infrastructure provider and a leader in enterprise software. The incorporation of AI capabilities into Azure services further increases its value, while strong enterprise relationships ensure customer loyalty and opportunities for upselling. While Azure's rapid growth garners significant attention, Microsoft's Productivity and Business Processes segment provides an essential foundation. This segment, which includes Microsoft 365, generated $78 billion in 2024, delivering stable, recurring income. This dependable revenue source allows Microsoft to finance investments in high-growth fields such as AI and cloud services. The 82.5 million Office 365 subscriptions, an increase of 10% year-over-year, highlight the stickiness of this business. With total annual revenues exceeding $245 billion, this stable base enables Microsoft to aggressively invest in AI and cloud infrastructure while maintaining strong profitability across its varied business portfolio. Path To 2x Growth For Microsoft's stock to double, the company must maintain its impressive growth, predominantly driven by its strategic leadership in AI and cloud computing. This growth will likely be propelled by the increasing adoption of AI across its Azure platform and the robust monetization of its AI-driven software, especially Microsoft 365 Copilot. Examining the figures, we estimate Microsoft's revenues will surpass $405 billion within the next four years, with adjusted earnings exceeding $20 per share. Currently trading around $500, MSFT stock is valued at about 14 times its trailing revenues. Although this is slightly higher than its four-year average price-to-sales (P/S) ratio of over 12 times, the substantial growth in Azure and Copilot may justify a premium. If Azure sustains its remarkable 30%+ growth rate, the accelerated revenue could merit even higher valuation multiples. Additionally, AI services often yield higher margins than traditional cloud infrastructure. As AI becomes a more significant contributor to Microsoft's revenue, operational leverage could lead to considerable profit growth. If Microsoft establishes a clear lead in enterprise AI, mirroring its historical dominance in productivity software, investors might attribute a lasting premium valuation to the stock. Even a minor increase in the P/S ratio to 18 times could push the stock beyond $1,000 within the next four years. The combination of growing revenues across all segments and improved profitability stemming from AI efficiencies could substantially enhance investor confidence in Microsoft. As the company showcases its ability to monetize significant AI investments while preserving market leadership, investors may begin to apply premium valuation multiples typically reserved for high-growth technology firms. This multiple expansion, coupled with fundamental business growth, provides a mathematical foundation for the stock to double. This outcome relies on both sustained revenue growth and a reevaluation of Microsoft's long-term earnings potential within the AI economy. Potential Risks to Growth While Microsoft's trajectory appears optimistic, a number of factors could impede the stock from doubling. The primary concern is the normalization of AI spending. Companies might become more cautious about initiating new Azure projects, implying that the current rate of AI investment may not be sustainable over the long term. Additionally, competition from Google, Amazon, and emerging competitors could also challenge Microsoft's pricing power in the AI market and its ability to gain market share. High-interest rates could render growth stocks like Microsoft less attractive compared to fixed-income alternatives. In summary, investors considering a position in Microsoft should also account for these risks. 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Forbes
20-03-2025
- Business
- Forbes
Best Buy's Social+ Platform Signals Retail Media's Off-Site Future
The Best Buy logo is being displayed on a smartphone screen and on a computer screen in Athens, ... [+] Greece, on May 22, 2024. (Photo by Nikolas Kokovlis/NurPhoto via Getty Images) Best Buy Ads announced today the launch of Social+, a new offering that allows brands to extend their retail media campaigns to Meta's social platforms. The solution leverages Best Buy's first-party customer data to enhance advertising performance on Facebook and Instagram, with plans to expand to additional social platforms in the future. With Social+, Best Buy is expanding its footprint into off-site retail media – advertising that reaches consumers beyond a retailer's owned properties – which eMarketer projects will grow twice as fast as on-site retail media through 2026. This expansion comes just months after Best Buy announced its upcoming U.S. marketplace launch, further signaling the retailer's coordinated strategy to diversify revenue streams beyond traditional retail. "Our world relies on technology more than ever, and no one understands customers who use and love tech better than Best Buy," said Lisa Valentino, president of Best Buy Ads. "We're excited to launch this in collaboration with Meta. With Social+, we've set a new industry standard that will help our partners thrive, boost their return on investment and provide more ways to measure meaningful impact." Best Buy's expansion beyond its owned channels reflects a broader industry recognition: the upper limits of on-site monetization are coming into focus. Retailers can only place so many ads within search results or product browsing experiences before customer experience suffers. Accordingly, off-site advertising will have a growing influence on retail media's trajectory. eMarketer predicts that off-site retail media spend will grown 2X faster then on-site ad spend in ... [+] 2026. This move into social platforms is particularly significant given current retail media spending patterns. 71% of retail media spending currently focuses on lower-funnel, conversion-oriented formats like sponsored products. Only 29% supports upper-funnel brand-building initiatives. Off-site retail media capabilities like Best Buy's Social+ offering could help brands achieve better balance in their approach to retail media. Social+ leverages Best Buy's proprietary customer insights with Meta's Advantage+ shopping campaigns to drive revenue across the Best Buy app and physical stores. The solution aims to help advertising partners increase ROI through automation that identifies both existing and prospective customers and delivers optimized content. A key feature is access to SKU-level data through Meta's Product Level Reporting Beta capabilities. This granular performance visibility gives advertisers more detailed insights into which specific products drive results, potentially improving how brands allocate their media investments across different items in their catalog. Best Buy says the technology was developed in-house and is already available to partners of Best Buy Ads, following a beta test with select brands. Best Buy's announcement follows a growing trend of retailers partnering with social platforms to extend their advertising reach. Costco has also been building momentum in off-site retail media, expanding from its first campaign with a CPG brand partner last year to approximately ten different partnerships currently active, as of March 2025. Pinterest has become another key player in this space. In a case study from late 2024, Mondelez's Triscuit brand worked with Pinterest and Albertsons Media Collective through a LiveRamp clean room. The six-week campaign yielded impressive results: 16% incremental sales and 19% incremental buyers by targeting Pinterest users searching for summer hosting inspiration and charcuterie board ideas. In August 2024, TikTok partnered with Amazon for in-app shopping, creating a direct commerce integration rather than an advertising solution. The relationship with Meta builds on Best Buy's existing strategic partnerships in marketing and advertising. In April last year, Best Buy announced a partnership that integrates CNET product recommendations across Best Buy channels. In 2023, Best Buy and Roku established a partnership to make connected TV advertising more relevant by applying the retailer's customer insights to deliver targeted content. These partnerships, alongside Best Buy's upcoming marketplace launch, reveal a comprehensive strategy to build what CEO Corie Barry described as 'incremental profit streams' through both expanded product selection and enhanced advertising capabilities. Best Buy's expansion into social media advertising underscores how retail media networks are evolving beyond simple sponsored product listings on their websites. As competition intensifies among the hundreds of retail media networks now operating, differentiated offerings and expanded reach will likely become increasingly important. When viewed alongside its marketplace ambitions, Best Buy's Social+ platform represents another piece in the retailer's strategy to build more sustainable advertising revenue streams. While the marketplace will help diversify Best Buy's advertiser base beyond major brands, Social+ extends their reach across the customer journey, and opens up additional revenue opportunities for the retailer. For brands, these developments create both opportunities and challenges. The ability to reach consumers across multiple touchpoints with consistent messaging and audience targeting represents a significant advancement. However, the proliferation of retail media options also creates greater complexity in campaign planning and measurement. As retail media continues to mature, retailers like Best Buy that can effectively bridge on-site and off-site advertising while providing meaningful measurement capabilities will likely capture a growing share of advertising budgets.
