12:48 PM EDT, 07/31/2024 (MT Newswires) -- Microsoft ( MSFT ) ramping investments with an anticipated yield in the future from capturing the generative artificial intelligence market warrants patience from investors, Morgan Stanley said in a note Wednesday.

The current financial report showed investments in the generative AI realm not yielding much at the moment with Azure revenue growth stabilizing and Office 365 Commercial decelerating.

The company described generative AI business exceeding supply and is working on building data center capacity to meet demand.

Investors can expect revenue growth in AI businesses and potential share gains over the next one to three years.

Microsoft's ( MSFT ) capital expenditure investments are aligned with current demand trends for generative AI, with about 50% of fiscal year 2025 spending related to durable land and data center build-outs, which are expected to monetize over 15 years or more, according to the note.

Morgan Stanley cut its price target on Microsoft ( MSFT ) to $506 from $520 and reiterated its overweight rating.

Price: 415.67, Change: -7.25, Percent Change: -1.71