Microsoft's Copilot Revolutionises AI Investing

Copilot Pro brings many of the Copilot 365 capabilities to non-corporate users for $20 per month per seat. The official Microsoft blog notes that subscribers will be able to create custom Copilot assistants to write emails, help code, design, and perform research, among other tasks. Although the Pro version will not be contextually aware, subscribers will have the option to export data to their connected Microsoft products, such as Outlook, Word, and PowerPoint.
iOS and Android smartphones will also get Copilot via dedicated mobile applications.
Small businesses have been clamoring for these features and general Copilot availability. Until now Copilot subscriptions were restricted to corporations willing to pony up a minimum license of 300 seats. This Copilot envy from small businesses has been amplified by stories of fantastic increases in productivity at real businesses. The London Times reported last May that Octopus Energy, a U.K. firm, used a trial version of Copilot to write generative emails to customers. Satisfaction increased from 65% to 85%, while saving the company millions in human labor costs.
Increased productivity is the big selling feature for Copilot.
It is not hard to imagine smaller companies rolling out Copilot to salespeople, analysts, software developers, and executives. Saving even one hour per month, the cost of a subscription, could lead to a dramatic return on investment. Deployed correctly, Copilot could significantly impact the bottom line of a corporation. The buzz for investors is even more important. They are currently skeptical about AI. Many feel it is overhyped, and will not catch-on with enterprises. This is unlikely. Microsoft executives had a pilot program long before the official launch. They consulted with enterprises regarding pricing and availability. When executives at the Redmond, Wash.-based company report earnings on January 23 they should announce that Copilot sales exceeded forecasts.
Buzz is important. What investors believe about the future drives share prices. At $388.47 Microsoft shares trade at 30 times forward earnings and 13.2 times sales. These metrics are at the higher end of the historical range; however, this is the beginning of a major new business at Microsoft. It’s a revenue stream with extremely strong competitive advantages.
Investors should buy Microsoft shares into any pullback to the $370 level, the rising 50-day moving average.
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Copilot is powered by the newer GPT-4 large language model (LLM), as well as featuring OpenAI's DALL-E 3 image AI tech.
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