Microsoft (MSFT) shares climbed as much as 4% on Friday, touching $516.39 in afternoon trading, after Oppenheimer raised its price target on the software giant and Microsoft rolled out a major overhaul of its Copilot application.

The rally followed a series of analyst upgrades. Oppenheimer's Brian Schwartz lifted his price target on Microsoft to $570 from $515 while keeping an Outperform rating on the stock. Schwartz pointed to customers increasingly standardizing on Microsoft as their primary enterprise AI platform.

Stifel analyst Brad Reback also turned more positive, upgrading Microsoft from hold to buy and raising his price target to $575 from $530 — a level implying roughly 11% upside from Friday's closing price.

Technology stocks broadly supported the market on Friday. The Technology Select Sector SPDR Fund, which counts Microsoft among its largest holdings, rose 0.8%, while the S&P 500 added a more modest 0.2%.

Microsoft Narrows Its Copilot Focus

As part of the overhaul, Microsoft merged its consumer and workplace Copilot assistants into a single application built for businesses, ending the company's effort to position Copilot as a personal AI companion for everyday users.

Microsoft executive Charles Lamanna laid out the rationale at a preview event, saying the company is not trying to build a personal companion app and instead wants to help people get work done.

The redesigned app is organized around three core tools. The first is a home hub that combines chat with task delegation, allowing users to edit Word, Excel, and PowerPoint files directly within the app. The second, built on GitHub Copilot technology, enables non-technical employees to create apps and workflows using plain language, running inside a sandbox controlled by a company's IT team. The third, called Autopilot, operates as a persistent agent embedded in a company's own cloud environment, capable of handling multi-step background tasks without constant human input.

A New Way Microsoft Gets Paid

Microsoft's pricing now follows a split model: everyday chat usage is covered by a fixed subscription fee, while longer agentic tasks are billed on a pay-as-you-go basis, with charges tied to how much customers actually use the tools.

The change alters the predictability of Microsoft's AI revenue. The company has more than 30 million paid Copilot enterprise subscriptions, which had provided a steady, seat-based revenue base. Usage-based billing ties part of that revenue to how frequently customers actually run the agent tools — a different setup from counting fixed seats each month. That makes actual agent usage, rather than seat counts, the figure to track as the new model takes effect.

Microsoft is not competing for every segment of the AI market. Alphabet continues to target consumer AI users through Gemini, and OpenAI does the same with ChatGPT. Alphabet shares rose 0.68% to $344.70 on Friday.

Microsoft stock has lagged its own sector for most of 2026. Shares are up 7% year to date, compared with a 37% gain for the Technology Select Sector SPDR Fund over the same period.

Schwartz flagged risks alongside his higher price target, citing AI disruption and the possibility that companies pull forward their enterprise technology spending — both of which could weigh on Microsoft's growth trajectory.

Wall Street overall remains constructive on the company. Microsoft carries a Buy consensus among the 55 analysts covering the stock, with 14 rating it Strong Buy, 38 rating it Buy, and three rating it Hold.

Microsoft closed Thursday at $497.93 before Friday's rally. The stock's 52-week range spans from $348.54 to $549.20, and even Friday's afternoon touch of $516.39 left shares short of that high.

This article is based on originally published by CoinCentral.