'AI is eating Microsoft,' says Melius, downgrades to 'hold'

Melius Research downgrades Microsoft's MSFT.O stock rating to "hold," says "Satya Lost the AI Narrative"

Brokerage says the company is moving too slowly on Copilot in 365, with more of a seat-first model that is susceptible to agents

Shares of MSFT marginally up at $403.68 in premarket

"We increasingly think that 'pay extra for AI' isn't a thing - and Copilot will need to be included for free, increasing costs long-term" - Melius Research

60 analysts rate the stock "buy" on average; median PT is $600 - data compiled by LSEG

As of last close, MSFT is down nearly 3.5% in the past 12 months