Benzingaยท2025-07-10 17:49Core Insights - Nvidia has achieved a historic $4 trillion market capitalization, with Microsoft expected to follow suit soon, highlighting the transformative impact of the AI Revolution [1][2] - Both Nvidia and Microsoft are positioned as key players in the AI Revolution, with Microsoft projected to join the $4 trillion club this summer and potentially reach $5 trillion within 18 months [3] AI Revolution's Impact - The pace of enterprise-scale AI deployments is accelerating, with Microsoft customers prioritizing AI use cases across various sectors, particularly in financials, government, and retail [4] - Over the next three years, more than 70% of Microsoft's installed base is expected to adopt AI functionality for enterprise or commercial purposes, significantly altering the company's growth trajectory [4] Fiscal Projections - Fiscal 2026 is anticipated to be a pivotal year for Microsoft's AI growth, with substantial investments planned, including $80 billion in capital expenditures for fiscal 2025 [5] - This investment aims to expand data center capabilities to meet increasing demand and support AI monetization strategies [5] Competitive Positioning - Microsoft is identified as the leading player in enterprise hyper-scale AI, with AI being a core driver of Azure's value proposition [6] - The company is expected to benefit from strong momentum around Copilot deployments, potentially adding approximately $25 billion to revenue by fiscal 2026 [7] Future Growth Expectations - The multiplier effect of AI, driven by Nvidia, is beginning to impact the cloud and software sectors, suggesting that cloud and AI monetization will increasingly contribute to Microsoft's business growth and margins [8] - Projected fourth-quarter revenue for Microsoft is $73.77 billion, with an EPS of $3.34 [8]