Microsoft (MSFT) Stock Climbs 4% as Copilot Redesign Takes Aim at Anthropic

TLDR

• Microsoft stock rose about 4% this week as it unveiled a major Copilot redesign.
• The new app merges chat, coding and always-on agents into one product to rival Anthropic’s Claude.
• Copilot lead Jacob Andreou admitted the coding push is Microsoft playing catch-up on AI.
• Paid Copilot seats hit 30 million, up 10 million in a single quarter.
• Analysts remain mostly bullish, with price targets implying 15% to 40% upside.

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Microsoft stock rose about 4% this week as investors cheered a major overhaul of Copilot. The move puts the company on a collision course with Anthropic’s Claude.

Microsoft Corporation, MSFT

On September 25, Microsoft folded several separate AI products into one unified app. The redesign is meant to compete directly with Claude and OpenAI’s tools.

The new app has three sections. Home combines chat with a task tool called Cowork, plus full versions of Word, Excel and PowerPoint.

The second section, Code, lets users build apps and dashboards with natural language prompts. It runs on the same technology behind GitHub Copilot.

The third piece, Autopilot, was previously called Scout. It lets users set up agents that run in the cloud and handle recurring tasks on their own.

CEO Satya Nadella first teased this combined app back in June at Microsoft’s Build conference. He told investors on a July earnings call it would launch this quarter, and it did.

Playing Catch-Up on AI

Copilot lead Jacob Andreou admitted that adding coding tools to the app means Microsoft is chasing rivals rather than leading them. OpenAI and Anthropic have already bundled chat, coding and agents together.

Meta’s Muse app has also climbed to the top of Apple’s App Store since launching this month. Microsoft is betting on enterprise trust instead of raw capability to win customers back.

Andreou said sending sensitive files to a local machine was a nonstarter for corporate clients, an apparent jab at Claude Cowork’s earlier setup. Nadella also criticized Anthropic’s Claude Fable model as overly restricted for creative work.

Despite the rivalry, Microsoft keeps working with Anthropic. The company is integrating Claude models into Copilot and collecting Azure revenue from Anthropic’s own $30 billion cloud commitment.

The Numbers Behind the Bet

Microsoft stock fell as much as 17% earlier this year, its worst stretch since the 2008 financial crisis. Paid Copilot seats made up just 3.3% of its roughly 450 million commercial Microsoft 365 users at the time.

Daily active users had already tripled year over year before the redesign. More than 1,500 enterprise customers were running both Anthropic and OpenAI models side by side on Microsoft’s platform.

Microsoft closed one recent quarter with 30 million paid Copilot seats, up 10 million in three months. GitHub Copilot separately passed 50 million users.

Stifel upgraded Microsoft from Hold to Buy this month, with analyst Brad Reback saying the company had turned the corner after its June quarter. Goldman Sachs modeled that Copilot and AI agents could drive more than $35 in earnings per share by fiscal 2030.

Fourth quarter revenue climbed 18% year over year to $90 billion, with Azure growing 43% and passing $100 billion in annual revenue. Thirty-three of 36 analysts covering Microsoft rate it a buy.

Average price targets in the $558 to $573 range imply upside of roughly 15% to 40% from current levels. Even the new Copilot app lets users pick between OpenAI’s GPT models and Anthropic’s Opus model for coding tasks.