Microsoft stock prices set a new record after announcement of subscription to generative AI
Will the forecast for explosive growth of Microsoft come true?
Microsoft stock prices reached a new record level after the announcement of the subscription price for the Copilot generative artificial intelligence (AI). Tuesday, July 18th, became the day when Microsoft stocks significantly increased, marking a growth of 4%. The tech giant introduced the subscription price for the generative AI in the office suite, leading to an increase in stocks to $359.49. This is a new record, surpassing the previous peak set on June 15th at $348.10. Over the past year, Microsoft stocks have grown by 50%.
The Microsoft Copilot subscription adds artificial intelligence features to popular company office programs such as Word, Excel, and Teams, within the Microsoft 365 package. The subscription cost is $30 per month, which will result in a 83% increase in monthly fees for corporate clients. Thus, Microsoft will receive additional income from regular subscriptions, CNBC notes.
Morgan Stanley predicts Microsoft’s market capitalization to reach $3 trillion by early 2024.
Analysts from Morgan Stanley recently published a forecast stating that by early 2024, Microsoft’s market capitalization will reach $3 trillion. Therefore, there is expected growth potential of around 20% from the current price. And the company could achieve this figure in less than a year. At least, that’s what analysts from Morgan Stanley predict.
The forecast appears quite realistic. As of July 19th, 2023, Microsoft’s stock is trading at around $359, while the target price is $415. Upon reaching this target price, Microsoft’s market capitalization will be around $3 trillion. This will allow it to catch up with Apple. Recall that Apple’s market capitalization recently reached around $3 trillion.
The success of ChatGPT, in which Microsoft has invested billions of dollars.
One of the factors contributing to the growth of Microsoft’s stocks is the ongoing success of generative artificial intelligence (AI), including the development of the chatbot ChatGPT. Microsoft has invested significant resources in the development of this project, and its results have been impressive.
ChatGPT is an AI system capable of generating human-like texts and engaging in dialogue with users. It is based on the GPT-3 model developed by OpenAI, but with additional improvements and customization to meet the specific needs of users.
ChatGPT has received widespread acclaim for its ability to generate natural and informative responses to a wide range of questions. It can be used in various fields, including education, technical support, travel, medicine, and more. Many companies have already started integrating ChatGPT into their business processes, leading to increased interest in the product and higher value.
As one can easily guess, the continued boom of generative AI, including the chatbot ChatGPT, remains the key driver for the growth of Microsoft’s stocks. However, it is highly likely that in the upcoming summer months or early autumn, there may be a reality check in the market.
In other words, the stocks of technology companies may retreat from their euphoric highs.
The benchmark for technology companies, the Nasdaq 100 index, has risen by 39% since the beginning of the year.
Over the same period, the S&P 500 has only grown by 15.5%.
So, what is the conclusion?
The subscription to the generative AI Copilot adds artificial intelligence features to Microsoft’s office programs, which has caught the attention of investors. Analysts forecast Microsoft’s market capitalization to reach $3 trillion by early 2024. Microsoft and other AI-related companies have the potential for growth, but today’s stock prices for Microsoft seem inflated. Investors should exercise caution as a market correction may occur in the near future. However, careful consideration is required when selecting companies as not all of them will be able to benefit from AI.