[ad_1]
Microsoft CEO Satya Nadella speaks at the company’s Build Developer Conference in Seattle, May 23, 2023.
Microsoft
Microsoft Stocks jumped to a record high on Thursday, after analysts said c. B. Morgan Chase Promote the growth prospects of software maker in artificial intelligence.
The stock rose 3.2% to close at $348.10, surpassing its all-time high in November 2021, the same month the Nasdaq peaked. US indices enjoyed a broad rally, after the Federal Reserve announced on Wednesday that it would delay an interest rate increase.
AI has been a hot topic all year, after Microsoft-backed OpenAI released ChatGPT in November, which quickly went viral. Tech companies have scrambled to embed technology in products and features and boasted of their ability to use artificial intelligence for cost savings as recession fears persist.
Microsoft is one of the main beneficiaries of the emergence of ChatGPT products and spin-offs. On top of its huge investment in OpenAI, the company provides the underlying computing power. Microsoft also holds an exclusive license to OpenAI models, including the GPT-4 large language model that can speak natural words in response to human text input.
Microsoft has integrated OpenAI tools into the Bing search engine and even the Windows operating system. At the company’s February event to announce the Bing Chatbot, Microsoft CEO Satya Nadella said, “It’s an exciting time in technology.”
Investors want to know what it all means for Microsoft’s earnings and revenue.
In April, Amy Hood, Microsoft’s chief financial officer, said it expected fiscal fourth-quarter growth for Azure cloud from 26% to 27% year-over-year in constant currency, with 1 percentage point of that coming from AI services. On Monday, in a public discussion with Microsoft Chief Technology Officer Kevin Scott, Hood went into more detail, saying that “the next generation of AI business will be the fastest growing $10 billion business in our history.”
In the past four quarters, Microsoft has generated nearly $208 billion in total revenue.
Scott delved into Hood’s predictions.
“Because it’s really a very public platform, we have a lot of different ways that $10 billion of ARR will debut,” he said. ARR stands for Annual Recurring Revenue.
“There are all the people out there who want to come use our infrastructure, whether they’re training their own models, whether they’re running their own open source model or whether they’re running API calls in one of the big frontier models we’ve built with OpenAI,” Scott said.
After the event, JPMorgan analysts raised the price target to $350 from $315.
“As MSFT continues to weather a broad wave of cloud improvements weighing on Azure growth, we see it sowing the seeds of long-term success across Security, Teams, Power Apps and now its forward-looking OpenAI/ChatGPT investments,” the analysts wrote, who have an equivalent Buy rating. for Microsoft shares.
With Microsoft up 46% this year, the stock has regained all of its losses from 2022, when investors abandoned technology in anticipation of rising interest rates and economic headwinds.
Negative sentiment about the growth of the cloud and the shrinking PC market led to pessimism on Wall Street last year. But the excitement around artificial intelligence as well as the cost-cutting measures implemented by technology companies has led to a renewed bullish trend. The Nasdaq is up 32% this year, doubling the gains in the S&P 500.
He watches: Dot com bust vs AI Mania: 1999 vs 2023 comparison
[ad_2]
