After strong earnings, Microsoft Corp (MSFT.O) shares rose 8% premarket on Wednesday, lifting tech stocks.
If premarket gains persist, Microsoft (MSFT) will surpass Saudi Aramco (2223. SE) as the world’s second-most valuable firm. Its $2.2 trillion valuation is $400 billion behind Apple Inc. (AAPL.O).
Brent Braceli of Piper Sandler said the stock was an “AI-All Star” as at least 18 analysts boosted their price estimates for it. Investors were unprepared for a dismal quarter, yet Microsoft’s results astounded them with better-than-expected growth across several areas, from cloud computing to Office productivity software.
Microsoft’s findings are encouraging for an industry that recently let go of tens of thousands of people as demand declined due to the weakening economy.
Amazon.com Inc. (AMZN.O) and Meta Platforms Inc. (META.O), two Big Tech rivals, saw their shares rise while Alphabet Inc. (GOOGL.O), which is competing with Microsoft for supremacy in AI, had its share price drop 1.3%.
The parent company of Google also announced better-than-anticipated quarterly results. However, its search engine only increased by 2% compared to Microsoft’s Bing, which saw a 10% gain thanks to the inclusion of ChatGPT’s technology.
In a 60-minute event, CEO Satya Nadella mentioned artificial intelligence (AI) 50 times, underscoring its rising significance.
According to Nadella, the firm has over 2,500 users of its Azure-OpenAI services, including Snap Inc., Mercedes-Benz, and Coursera. He also claimed that AI is included in a variety of the company’s products.
Given the significant advantages that OpenAI and Microsoft have over their hyper scaler (large-scale data center) rivals and other generative AI engines, D A Davidson analyst Gil Luria said, “We believe that Azure may gain share as generative AI continues to proliferate into many more corners of software and the economy.”