Microsoft announced new artificial intelligence software agents capable of performing more complex tasks during a keynote presentation at its Build conference in Seattle on Monday. But Microsoft stock dipped on Tuesday.
Microsoft Chief Executive Satya Nadella characterized the current landscape as "entering the middle innings" of AI product development.
With its latest advancements, Microsoft is taking AI agents from isolated applications to a more capable connected network, Raymond James analyst Andrew Marok said in a client note.
"We see many of these announcements as highly additive to Microsoft's AI services, enabling power users to accomplish more while addressing some complaints around agents' limited scope to date," Marok said. "We come away from today's reveals positive that Microsoft can maintain its recent AI momentum."
Marok reiterated his outperform rating on Microsoft stock with a price target of 490.
On the stock market today, Microsoft stock slid 0.2% to close at 458.17.
Last week, Microsoft stock cleared a buy point of 448.38 in a cup base, based on IBD analysis.
Now, Microsoft is approaching a buy point of 468.35 out of a 46-week consolidation pattern, according to IBD MarketSurge.
"Announcements like support for Anthropic's Model Context Protocol (MCP) and Google's A2A agent-to-agent protocol, along with deeper connections among Microsoft's own agentic tools, seeks to compound the impact of individual agentic tools by tying them together and sharing data across them," Marok said.
Microsoft Stock Is Long-Term Leader
Elsewhere on Wall Street, Wedbush Securities analyst Daniel Ives had a positive response to Microsoft's Build conference news.
"Nadella and Microsoft laid out a future at Microsoft Build around AI agents focused in a ubiquitous way helping organizations from navigating its Windows operating system to coding across functional areas," Ives said in a report.
He added, "AI agents are moving closer to fully autonomous pieces of AI software that can quickly perform tasks for users."
Wedbush rates Microsoft stock as outperform with a price target of 515.
Microsoft stock is in the IBD Long-Term Leaders Portfolio.
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