Here’s How Analysts Reacted to Microsoft’s (MSFT) Loss of Exclusivity to OpenAI Technology

On Monday, Microsoft (MSFT) and OpenAI announced a renegotiated partnership agreement, under which the tech giant’s license to the ChatGPT maker’s intellectual property will no longer be exclusive. While Microsoft will remain OpenAI’s primary cloud provider, the AI startup can now offer its products to customers across any cloud company, including Amazon (AMZN) and Alphabet’s (GOOGL) Google Cloud. Here, we will discuss analysts’ reactions to this revamped partnership.

Meanwhile, Microsoft is scheduled to announce its fiscal third-quarter earnings on April 29. Wall Street expects Microsoft to report more than 17% year-over-year growth in Q3 FY26 EPS (earnings per share) to $4.06. Revenue is estimated to rise by over 16% to $81.4 billion.

Analysts Weigh in on Revamped Microsoft-OpenAI Deal

Following the news of the revised deal, Wedbush analyst Daniel Ives reiterated a Buy rating on MSFT stock with a price target of $575. The 5-star analyst views the revamped deal as a net positive for Microsoft, as the company locks in a 6-year intellectual property control over OpenAI technology and maintains a significant share of the AI startup, while securing revenue generated on its core platform. “In essence, the training wheels are off for MSFT with OpenAI, and now it’s about a step-up in AI monetization on its core platform looking forward,” said Ives.

Also, Evercore analyst Kirk Materne reiterated a Buy rating on Microsoft stock with a price target of $580. The 4-star analyst believes that the new deal simplifies the relationship, with Microsoft “giving up some exclusivity in exchange for greater clarity, flexibility, and economic certainty.” Meanwhile, OpenAI gets more freedom to operate, with Microsoft keeping its key partner role, long-term access to its technology, and a share in the AI startup’s growth.

Overall, Materne believes that investors might not be surprised by the new deal, as Microsoft has increasingly shown interest in a broader multi-model strategy, while OpenAI is set to gain from expanded distribution. The analyst expects management to provide more details on the impact of the new revenue share structure on Azure’s economics during the Q3 FY26 earnings call.

Also, RBC Capital analyst Rishi Jaluria reiterated a Buy rating on MSFT stock with a price target of $640. While the analyst was surprised to see another amended agreement, just six months after the previous one, he agrees that the dynamics in the AI space are shifting rapidly. Jaluria thinks that some parts of the deal, including research rights and API exclusivity, are unclear, and he looks forward to getting clarity on them during the upcoming Q3 earnings call. Overall, Jaluria believes the new deal looks positive for both parties, with MSFT becoming less dependent on OpenAI through a multi-model approach, while OpenAI gains flexibility to work with more partners and expand capacity.

Is MSFT Stock a Buy, Sell, or Hold?

Heading into Q3 FY26 earnings, Wall Street has a Strong Buy consensus rating on Microsoft stock based on 32 Buys and two Holds. The average MSFT stock price target of $570.15 indicates 34.2% upside potential.