01:32 PM EDT, 10/08/2024 (MT Newswires) -- Microsoft ( MSFT ) could see its near-term financials impacted by losses tied to OpenAI, Oppenheimer said in a note Tuesday.

"OpenAI losses are the primary concern and could be in the [$2 billion to $3 billion] range in [fiscal year 2025]," Oppenheimer said in the note. "OpenAI reportedly expects a loss of [around $5 billion] this year, with half flowing through [Microsoft ( MSFT )] given its 49% stake."

Enterprises have been slow to adopt artificial intelligence, and AI-related revenues may fall short of expectations, which could impact Microsoft ( MSFT ), Oppenheimer said.

The firm also pointed to rising capital expenditures and depreciation expense, driven by investments in graphics processing units, or GPUs, and data centers, and warned that this higher spending may not generate immediate returns.

In fiscal 2024, gross margins and earnings before interest, taxes, depreciation, and amortization margins hit record highs at 69.8% and 58.1%, respectively, but are expected to drop due to AI-related costs, Oppenheimer said. Earnings per share growth is projected at 3% for Q1 of 2025, with "weakish guidance" for the year, it added.

Oppenheimer downgraded Microsoft's ( MSFT ) stock to perform from outperform.

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