Microsoft's Build developer conference is going to be a "showstopper," Wedbush analyst Dan Ives told Business Insider.
Ethan Miller
It's about to be a big week for Microsoft.
Microsoft is in the spotlight as it follows major announcements from OpenAI and Google last week and prepares to unveil its latest AI innovations at Build, the company's annual developer conference.
The tech giant is also holding an exclusive event for journalists on Monday detailing its vision for hardware, which will likely feature its new Surface lineup along with some software updates.
The next day is the main event, Microsoft's Build keynote, where it's expected to announce updates to its AI assistant Copilot and cloud computing platform Azure, along with other Windows features.
Wedbush analysts said in a Monday note that they believe Microsoft's AI and cloud advancements have been underestimated by the stock market — but Microsoft tools like Copilot will be a major source of revenue growth that could generate between $25 and $30 billion for Microsoft by its fiscal year 2025.
According to Dan Ives, Wedbush's managing director and senior equity analyst, Microsoft's big week is expected to be all about three things — here's what's expected to be front and center.
Wedbush analysts expect Microsoft to roll out more Copilot and AI features into its consumer and enterprise product stack.
Wedbush said in its analyst note that it expects more AI integration with Microsoft apps like Excel, Teams, and Word, which will increase subscriptions and strengthen Microsoft's consumer base.
Over 70% of Microsoft's installed base "will ultimately be on this AI-driven functionality" in the next three years, the analyst said, which will be a big change for the company.
Ives said putting AI features into Windows will give developers the foundation to build AI use cases through Windows and, ultimately, Azure.
Ives said in some ways, the most important aspect of the developer conference is going to be showing off the AI framework in Azure.
In its analyst note, Wedbush estimated that Microsoft's customers still have plenty of room to increase their spending with the company. For every $100 they spend on Azure, there is an estimated $35-$40 in potential additional AI spending, they wrote.
"Cloud is where the battleground is between Google, Oracle, Amazon," Ives said. "Microsoft is showing developers to look no further than between us and OpenAI."
Wedbush analysts anticipate new laptops along with Windows updates this week.
The new hardware expected to be announced on Monday, the day before Build kicks off, could include the Surface Pro 10 and the Surface Laptop 6, The Verge reports. Both would run on Qualcomm's Snapdragon X Elite processors as the company transitions to Arm, The Verge said.
New processors would come as Microsoft and other PC companies have been under pressure to ramp up their processing chips since Apple transitioned to creating its own. Recent reports also indicate that Apple is working on revamping its entire Mac lineup with a series of new M4 processors that aim to put AI at their center.
But Microsoft's Surface updates may kick off the trend. Ives said the new AI Surface updates will start a new PC-driven cycle that's "AI-led, from Dell to Microsoft, and ultimately to Apple as well."
Microsoft has big shoes to fill following OpenAI's spring update and Google's I/O conference last week. Both companies announced human-like updates to their AI products, showcasing their AI agent's ability to respond to prompts with voice and act as a tutor.
Google also announced a revamped search engine integrated with AI, which competes with Microsft's AI-powered Bing.
But according to Ives, Microsoft will be a "showstopper." Due to OpenAI's collaboration with Microsoft, Ives said the conference will build on OpenAI's announcements from last week.
Business Insider will be liveblogging Microsoft's big opening keynote on Tuesday at 12 p.m. ET, so check back with us then to follow along.
