[ad_1]
Microsoft CEO Satya Nadella speaks at the OpenAI DevDay event in San Francisco on November 6, 2023.
Justin Sullivan | Getty Images
Microsoft closed Tuesday’s trading session at a record high of $360.53, following new optimism about the growth of a major partner in artificial intelligence. The daily increase of 1.12% gives the software maker a market value of about $2.68 trillion.
The major US indices all posted gains for the day, with the S&P 500 rising for the seventh consecutive year, while Microsoft rose for eighth in a row. The stock hasn’t seen such a strong rise since January 2021.
At an event in San Francisco on Monday, Microsoft’s strategic AI partner OpenAI announced a slew of updates, including price cuts and plans to let people create custom versions of the ChatGPT chatbot. Microsoft CEO Satya Nadella was present at the event and he emphasized that developers building applications with OpenAI’s tools can get to market quickly by deploying their software on Microsoft’s Azure cloud infrastructure.
Microsoft has reportedly invested $13 billion in OpenAI, giving Microsoft an exclusive license to OpenAI’s GPT-4 major language model that can generate human-like prose in response to a few words of text. Last week, Microsoft announced the release of an AI add-on for its Office productivity app subscriptions and an assistant in Windows 11, both of which rely on OpenAI models.
“What’s good for OpenAI is, in our view, good for Azure,” UBS analysts led by Karl Keirstead wrote in a note distributed to clients on Monday. “If OpenAI now actively engages software developers to build apps using ChatGPT/GPT-4, lowering prices and improving model performance, this could drive greater OpenAI consumption of Azure and serve as a modest positive for Microsoft serve.” The analysts have a buy recommendation for Microsoft shares.
Oppenheimer analysts, with the equivalent of a buy rating, said OpenAI’s price updates confirm OpenAI’s status as a category leader.
If OpenAI succeeds, it will be “mutually synergistic” for Microsoft, they wrote. Microsoft said in a regulatory filing in October that OpenAI is its “strategic partner” in AI.
Also on Tuesday, maker of cloud monitoring software Data hound has told investors that its customers are starting to relax cost-cutting projects. Datadog can monitor infrastructure in Azure and other public clouds, such as Amazon Web services. Amazon ended the day up 2.13%, but has not yet surpassed its July 2021 record.
WATCH: 2024 is the year of AI revenue, says analyst
Don’t miss these stories from CNBC PRO:
