By
Godfrey Benjamin
April 26th, 2024
Market analysts believe the new updates released by OpenAI significantly contributed to the rise of Microsoft (MSFT) shares.
Microsoft Corporation (NASDAQ: MSFT), a global technology powerhouse, witnessed a remarkable surge in its share price, achieving unprecedented heights for the first time since 2021.
On November 7, the company’s shares ended the trading session at a record high of $360.53, representing an impressive daily increase of 1.12%. The surge propelled the company’s market value to approximately $2.68 trillion.
Positive Market Sentiment
The robust performance aligns with broader market sentiment on Tuesday, as major US indices displayed significant gains. The S&P 500 marked its seventh consecutive rise, while Microsoft celebrated its eighth straight positive session, demonstrating a level of sustained performance not observed since January 2021.
Nasdaq Composite also recorded its longest winning streak since November 2021. Similarly, the Dow Jones Industrial Average showed notable gains, reflecting the prevailing optimism across various market segments.
According to a CNBC report, the latest uptick in Microsoft’s stock price follows an event hosted by the company’s AI partner, OpenAI, in San Francisco on November 6.
During the DevDay conference, OpenAI unveiled a series of updates, including price reductions and plans to offer customizable versions of its ChatGPT chatbot.
Microsoft CEO Satya Nadella also attended the conference. The company’s boss emphasized the benefits for developers utilizing OpenAI’s tools during his speech, mainly through the swift deployment capabilities of the company’s Azure cloud infrastructure.
Having invested $13 billion in OpenAI, Microsoft has secured an exclusive license for OpenAI’s advanced GPT-4 large language model, known for its ability to generate human-like text responses from minimal textual cues.
What is Good for OpenAI Is Good for Microsoft
Market analysts believe the new updates released by OpenAI significantly contributed to the rise of Microsoft (MSFT) shares.
According to UBS analysts, “what is good for OpenAI is also good for Azure”, referring to the latest updates released by the company on Monday. The analysts believe that introducing a customizable feature that allows developers to build their own version of ChatGPT will drive the consumption of Microsoft’s Azure product, which would in turn, reflect on the company’s shares.
“If OpenAI is now actively courting software developers to build apps using ChatGPT/GPT-4, lowering price points and improving model performance, it could drive greater OpenAI consumption of Azure and serve as a modest positive for Microsoft,” said analysts.
Additionally, Oppenheimer analysts have emphasized OpenAI’s prominent position in the industry, affirming the mutual synergies between OpenAI’s success and Microsoft’s market performance.
“When OpenAI succeeds, it’s ‘mutually synergistic’ for Microsoft,” said the analysts.