What happened

Shares of Teladoc Health (TDOC -2.40%) were moving higher Tuesday after the telehealth company announced a new AI partnership with Microsoft Azure, the latest expansion of its relationship with the tech giant.

The stock was up 3.4% as of 12:30 p.m. ET after having gained as much as 9.8% earlier in the session. A note from Credit Suisse seemed to tamp down some of the excitement around the Microsoft news.

So what

In its press release Tuesday morning, Teladoc said it is integrating Microsoft Azure OpenAI Service and other products into the Teladoc Solo virtual care platform. The goal is to minimize the administrative burden on healthcare professionals by automating clinical documentation during virtual and in-patient exams.

While the stock initially popped as investors were excited to see the company embracing AI technology, Credit Suisse described the move as positive, but not a game-changer. The investment bank further described it as a natural step in Teledoc's relationship with Microsoft, and said it was maintaining a neutral rating and a price target of $27 on Teladoc.

Now what

Teladoc was a big winner during the pandemic as "stay at home" stocks skyrocketed, but since then, its share price has crashed by more than 90% from its peak, its growth has slowed significantly to just 11% in Q1 2023, and the company continues to post wide losses on the bottom line.

The telehealth company has also taken billions in write-downs on its acquisitions, including $13.4 billion in noncash goodwill impairment charges on Livongo Health, which it bought for $18.5 billion in 2020.

We'll get an update from the healthcare company next week when its second-quarter results come out, but Teladoc needs more than Tuesday's news to turn things around.