* The launch of AI chatbot CoPilot represents an "iPhone moment" for Microsoft, according to Wedbush.

* Wedbush said a suite of AI products is set to change the trajectory of Microsoft's cloud growth.

* Wedbush raised its Microsoft price target to $450, representing potential upside of 21%.

The launch of artificial intelligence tool CoPilot represents an "iPhone moment" for Microsoft that will change the trajectory of the company's growth profile, according to Wedbush analyst Dan Ives.

Ives said in a note on Wednesday that recent channel checks with Microsoft's AI customers have turned incrementally more bullish and bode well for Microsoft's ability to monetize the product in 2024.

"We view this as Microsoft's 'iPhone moment' with AI set to change the cloud growth trajectory in Redmond the next few years," Ives said. "In a nutshell based on our recent work in the field we believe over the next three years over 60% of its Microsoft installed base will ultimately be on this AI functionality for the enterprise/commercial."

The growing monetization potential of Microsoft's AI tools sparked Ives to raise his Microsoft price target to $450 from $425, representing potential upside of 21% from current levels.

"We believe the stock still has yet to price in what we view as the next wave of cloud and AI growth coming to the Redmond story with a strong competitive cloud edge vs. Amazon and Google," Ives said, adding that CoPilot could add $25 billion to Microsoft's total revenue next year.

Microsoft's full embrace of AI, along with the rest of the tech sector, should unleash a "$1 trillion AI golden spending wave" over the next decade that rivals the internet boom seen during the 1990s, Ives predicts, and that should ultimately be great news for Microsoft investors.

Ref: ca.finance.yahoo.com - Microsofts iphone moment arrived AI