Microsoft’s huge bet on ChatGPT is a “game-changing investment in AI” that could boost stocks by 20%, Wedbush says.

  • Microsoft’s $10 billion ChatGPT bet could boost the company’s stock by 20%, Wedbush said on Monday.
  • The tech giant has confirmed the expansion of its partnership with OpenAI, the developer of ChatGPT.
  • This is a game-changer, Wedbush said, as Microsoft has lagged behind important trends in recent years.

Microsoft’s huge bet on ChatGPT is a game-changer as the tech giant enters the AI ​​space, and according to Wedbush, it could boost the company’s stock by 20%.

“Because ChatGPT is one of the most innovative AI technologies in the industry, MSFT is clearly aggressive on this front and is not going to be left behind in what could be a potential game-changing investment in AI,” Wedbush said in a note on Monday. , hours after Microsoft confirmed its $10 billion partnership with OpenAI, the developer of a noisy AI bot that can spit out complex prose.

This expands on the $1 billion investment Microsoft already made in the company in 2019, with plans to bring AI technology to Microsoft’s existing services, including Azure, Microsoft’s public cloud platform. The technology can also be used to optimize services like Bing and Outlook that lag behind competing services like Google, Wedbush said.

Analysts noted that this could turn Microsoft into a major AI stock and expected the latest investment to send Microsoft’s stock up 20% this year, with the share price hitting $290 by the end of 2023. Shares have already risen 6% to $244.04 since Microsoft first announced it was mulling a $10 billion investment on Jan. 10.

It comes after a dismal year for the tech giant, whose shares lost 28% of their value last year amid rising inflation and tightening Fed policies. Wedubush noted that the company had largely underperformed other mega-cap technology stocks due to a notorious 1990 antitrust lawsuit that saw the company fall behind key trends in social media and mobile technology.

“Nadella has no intention of repeating the same mistakes and we believe this strategic investment is a smart poker move in this AI arms race that is happening around the world,” the Microsoft CEO said in a note.

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