Bernstein analysts raised the price target on Microsoft (NASDAQ:MSFT) to $380 per share from the prior $342 on the back of the expected Azure growth.

The analysts highlighted that the hyperscale market is the largest tangible market opportunity in Software/Cloud/Internet, estimated at over $1 trillion. They also reminded investors that Microsoft’s management said it expects AI services to contribute ~1% to incremental growth of Azure next quarter.

“This is a huge number, and while AI has been part of the Azure story for years, for AI to already generate 1% incremental growth shows that demand for AI, especially post the GPT announcements, is going to be a big driver of Azure,” they said in a note.

The analysts argued that there are signs that the Redmond-based giant has “taken the AI mantel from Google (NASDAQ:GOOGL).”

“Azure could become a bigger and more important hyperscale provider than AWS,” they added.

The continuation of this trend could see AI become “a very large driver of the size of Azure’s long term revenue.”

Bernstein also raised the price target on Oracle (NYSE:ORCL) as the company’s hyperscale business is showing consistent signs of gaining traction.