The corporation known’s shares have rallied in recent weeks, pushing the software giant’s market value set to close above $2 trillion for the first time in nearly six months.[0] This surge in the stock has been driven by investor interest in artificial intelligence and its acquisition of market share in AI research and development.[1]
Microsoft recently announced it’s stepping up its investment in OpenAI, the owner of a wildly popular chat bot, and unveiled a version of its Bing internet-search engine powered by the ChatGPT technology.[1] Shares of the tech giant rose as much as 3.4% to $276.76 early Wednesday, joining Apple Inc. as the only stocks with market capitalizations above $2 trillion.
The company is helping many of its partners and customers train AI models with the help of its supercomputing infrastructure and Azure cloud computing services.[2] Given its strong financial and strategic position, Microsoft presents a great investment option for those looking for a long-term investment. The current market conditions have caused a decrease in their stock prices, making this an even more attractive option.[3]
Microsoft’s diverse profit streams make it an incredibly resilient business, and its strong position in the cloud computing market should allow those profits to keep growing. The company enjoys significant exposure to the rapidly growing cloud computing, gaming, and artificial intelligence markets.[2]
Microsoft’s purchase of a substantial portion of AI research and development provides a great opportunity for future expansion.[3] Microsoft products will experience an increase in market demand due to the inclusion of OpenAI products.[3] Conversely, the demand for Microsoft’s intelligent cloud segment is growing, as more businesses move to online operations, thereby driving up the demand for cloud computing services.[3]
Separately, Britain’s antitrust watchdog provisionally found that Microsoft’s $69 billion acquisition of Activision Blizzard Inc. will harm competition in the UK gaming market.[4] Technical analysis suggests that if Microsoft closes the trading day near its high-of-day prices, the stock will print a bullish kicker candlestick, which could indicate higher prices are on the horizon.[5]
Overall, Microsoft’s consistent revenue growth over the past decade is indicative of the company’s financial strength. The strong long-term outlook for Microsoft is underpinned by the company’s revenue predictability, resilient profit margins, and the growth potential relating to AI. Therefore, Microsoft is a great investment option for long-term investors.[3]
0. “Microsoft Rejoins Apple in $2 Trillion Club as Rally Accelerates” Bloomberg, 8 Feb. 2023, https://www.bloomberg.com/news/articles/2023-02-08/microsoft-rejoins-apple-in-2-trillion-club-as-rally-accelerates
1. “Microsoft Rejoins Apple In $2 Trillion Club As Rally Acceler…” MENAFN.COM, 8 Feb. 2023, https://menafn.com/1105545696/Microsoft-Rejoins-Apple-In-2-Trillion-Club-As-Rally-Accelerates
2. “Is It Time to Buy Microsoft Stock?” The Motley Fool, 8 Feb. 2023, https://www.fool.com/investing/2023/02/08/is-it-time-to-buy-microsoft-stock
3. “Microsoft construct bullish momentum” FXStreet, 6 Feb. 2023, https://www.fxstreet.com/news/microsoft-construct-bullish-momentum-202302060901
4. “Microsoft back in the $2trn club for the first time in nearly 6 months” News24, 8 Feb. 2023, https://www.news24.com/fin24/companies/microsoft-back-in-the-2trn-club-for-the-first-time-in-nearly-6-months-20230208
5. “You Ask, We Analyze: Why Microsoft Needs A Quick Rest Before Another Run Higher By Benzinga” Investing.com UK, 8 Feb. 2023, https://uk.investing.com/news/stock-market-news/you-ask-we-analyze-why-microsoft-needs-a-quick-rest-before-another-run-higher-2908188