OpenAI And Microsoft Are Making Sure They’re Centers Of Attention

OpenAI And Microsoft Are Making Sure They’re Centers Of Attention
Paul Allison, CFA

4 months ago2 mins

Mentioned in story

What’s going on here?

OpenAI made sure that artificial intelligence was still on the main stage, and Microsoft’s stock shot to stardom straight after.

What does this mean?

ChatGPT’s creator OpenAI took to the stage earlier this week, reminding everyone – especially small, competing AI startups – that it’s the one leading the path to a dystopian future. Microsoft popped its head in too, making sure investors remember that as the owner of 49% of OpenAI, the tech titan is a direct beneficiary of all and any success. The point landed: Microsoft’s stock hit a new altitude after the developer event.

Microsoft stock
Source: Google Finance

Why should I care?

Zooming out: Win-wins.

Not all of Microsoft’s success is down to that sweet talking, though. Investors are now pretty confident that the Federal Reserve is staying away from the rate-hiking pedal, which would release some of the pressure that’s weighing down stock prices. Remember, investors value stocks based on their future prospects, and higher rates reduce what a company’s future cash flows are worth today. Thing is, Microsoft likely has the heft it needs to stay stable even if rates end up ticking up or the economy tanks. And even if the stock slips, investors would simply see that as a chance to buy the goliath on the cheap.

For markets: Good things (might) come in threes.

AI investors can’t relax yet. Nvidia – high-tech chipmaker to the super-smart stars – reports its latest set of quarterly results on November 21st, and the stats will offer breadcrumbs about how the AI trend as a whole is doing. Nvidia’s predicted revenue of $16 billion, and more importantly, Wall Street wizards have pinned hopes for this quarter’s takings near the $18 billion mark. But because China’s lagging economy may drag down sales of the company’s chips, Nvidia’s own forecasts will be the ones to watch.



All the daily investing news and insights you need in one subscription.

Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.

/3 Your free quarterly content is about to expire. Uncover the biggest trends and opportunities. Subscribe now for 50%. Cancel anytime.

© Finimize Ltd. 2023. 10328011. 280 Bishopsgate, London, EC2M 4AG