A hefty investment in AI chatbot maker OpenAI and Microsoft’s focus on artificial intelligence (AI) have enabled the US technology giant to rise to a new record high at Thursday’s closing. This is the first time the company has crossed $2 trillion in market value, a milestone it reached after its shares rose to $348.10 apiece, up 3.20 percent.
The rally for Microsoft can largely be attributed to the growing excitement around AI, which has become one of the most popular themes in tech investing. Companies in various sectors are widely expected to use AI to streamline their operations and boost productivity increasingly. This is why many investors are rushing to buy shares of tech companies at the forefront of this trend.
This year has been particularly exciting for the tech sector, as the Fed’s pause in interest rate hikes has unleashed optimism about the economy, and technology investments have soared. As a result, the Nasdaq and S&P 500 have reached all-time highs this year. Despite the negative sentiment that plagued tech stocks last year, these gains have been driven by renewed enthusiasm for AI, which has triggered a wave of cost-cutting measures among major IT companies.
One of the companies benefiting from this trend has been Microsoft, which saw its shares rise 46% this year. The company’s shares had recouped all the losses they suffered in 2022 when investors rotated out of technology stocks on fears about interest rate hikes and slowing cloud growth.
Microsoft’s rally can be attributed to its strategic investments in the AI sphere, including its hefty $10 billion investment in AI chatbot maker OpenAI. Since then, the company has rolled out a series of AI upgrades that the industry has welcomed. One such upgrade was launching a generative AI system that could respond to written inputs with natural-sounding phrases. Another was the release of a large language model called GPT-4 that can easily understand natural-sounding conversations.
These upgrades are helping Microsoft to compete with the likes of Google and Amazon, which are also focused on making their technology more intelligent. The company is expected to continue to progress in this area, which may lead to its share price continuing to soar.
