TipRanks
5 min read
Microsoft (NASDAQ:MSFT) and Salesforce (NYSE:CRM) sell to many of the same corporate customers, and both are betting that AI agents, software that can carry out tasks on its own, will become a major source of revenue.
Today, Microsoft got an uncomfortable reminder of how much those customers rely on it. A global outage that started Thursday afternoon knocked Outlook and parts of Teams, Copilot and other Microsoft 365 services offline for millions of users, and it dragged into Friday after the first fixes didn’t hold. Microsoft says it has found no sign of malicious activity.
Microsoft shares are down around 1.5% in premarket trading on Friday. Salesforce has had a tough year of its own, with the stock down about 18% year to date.
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RBC analyst Rishi Jaluria covers both tech giants and published notes on each this week, ahead of Microsoft’s Ignite conference (November 17-20) and Salesforce’s fiscal third-quarter report on December 2.
Microsoft
Starting with Microsoft, the analyst expects Ignite to show how far the company has pushed AI into every layer of its business, from data centers and in-house chips to apps and security. However, he doesn’t see the event moving the stock much in the short term.
The backdrop is strong. Azure grew 48% in constant currency last quarter, up from 43% the quarter before, and management has guided for 49% to 50% this quarter. Jaluria believes demand still outruns the capacity Microsoft can bring online, which makes that guidance look cautious, though the year-ago comparison is a tough one. He wants updates on capacity and on Maia 300, the custom chip unveiled in October, which Microsoft is designing to be 40% more efficient than leading GPU setups and expects to roll out at multi-gigawatt scale in 2027.
Then there’s Copilot. Daily users jumped about 50% from the prior quarter and more than fivefold year over year, while customers with over 50,000 Microsoft 365 seats grew more than 8x. Jaluria thinks investors are overlooking Microsoft’s shift toward usage-based pricing, which Cowork and GitHub Copilot already use. Charging for consumption rather than per user could lift the ceiling on what Microsoft earns as agents take on more work, and he expects Ignite to add new agent-building and management tools.
