Microsoft Stock: GPT-4 Improves Microsoft Position In AI

The release of the latest version of OpenAI’s artificial intelligence-powered chatbot will bolster Microsoft‘s (MSFT) position as a leader in the AI market, a Wall Street analyst says. Microsoft stock rose Wednesday despite a rough day for stocks.

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Privately held OpenAI released GPT-4 on Tuesday, one year after version 3.5. GPT is short for generative pre-trained translator. It uses artificial intelligence to produce humanlike responses to questions and commands. It also powers the buzzy application ChatGPT.

Microsoft is a major investor in OpenAI and is using GPT-4 to power its Bing search engine and other applications. GPT-4 runs on Microsoft’s Azure cloud computing infrastructure.

Oppenheimer analyst Timothy Horan reiterated his outperform rating on Microsoft stock after the GPT-4 news. He also kept his price target on Microsoft stock at 280.

Microsoft Stock Rises On AI News

On the stock market today, Microsoft stock climbed 1.8% to close at 265.44.

With GPT-4, the technology is moving from research to commercial phase, Horan said in a note to clients. It will increase demand for Azure and improve Microsoft’s positioning in AI in general, he says.

However, Microsoft is still working out the kinks with GPT-4 in Bing, Horan said. Responses are more accurate but much slower with the new AI engine, he said.

In addition to Microsoft, other companies using GPT-4 include Duolingo (DUOL), Stripe and Morgan Stanley (MS).

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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