Jefferies Doubles Down on Microsoft's Copilot Opportunity

Anthropic, an AI startup, plans to spend $518B over the next decade on cloud computing and AI infrastructure, with 80% of the spending non-cancelable. Alphabet (GOOG, GOOGL), Amazon (AMZN), and Microsoft (MSFT) are expected to benefit, with commitments of $111.1B, $110B, and $31.4B respectively. Alphabet and Amazon have already recorded significant paper profits from their investments in Anthropic.

Apple's stock fell 2% to $331.08 after Bank of America warned Meta's shopping agent could reduce online commerce activity in its ecosystem. Meta's stock rose 0.4% to $718.53. Alphabet and Microsoft also declined, but less sharply. Bank of America maintained a Buy rating on Apple, citing its strengths despite potential risks. Apple plans a structural overhaul to speed product development and adapt to slowing services growth.

Microsoft's stock fell 1.2% to $503.32 after expanding its Copilot AI super-app. The company integrated three features into one hub, with Autopilot moving to private preview in late September. Investors question whether AI agent costs will be offset by customer payments. The stock is 14.47% below GuruFocus's estimated value of $588.50.

Microsoft's stock fell 1.2% to $503.32 on Tuesday, despite expanding its Copilot AI super-app. The app now includes Home, Code, and Autopilot features. Microsoft aims to keep users and AI agents within its ecosystem, but investors question whether customers will pay enough to offset computing costs. The stock is 14.47% below GuruFocus's $588.50 GF Value estimate.

Anthropic plans to spend $518 billion over a decade on AI infrastructure with partners, including $111.1 billion with Google, $110 billion with Amazon, and $31.4 billion with Microsoft, according to an IPO filing. About 80% of these commitments are non-cancellable. The company also has $161.2 billion in non-cancellable Broadcom equipment leases. Anthropic warns that dependence on these partners poses risks.

Microsoft updated its Copilot AI platform, combining chat, delegated work, and coding tools. Home unifies Chat and Cowork, integrating Office apps. Code lets non-programmers describe software to build it. Autopilot handles recurring tasks independently. Features roll out in weeks, with usage-based pricing for some. Microsoft did not provide adoption or accuracy data.