Tech stock Microsoft (NASDAQ:MSFT) is making some changes in how it approaches artificial intelligence. Those changes aren’t sitting well with investors, who pulled back to the tune of over 2% of Microsoft’s market cap in the closing minutes of Tuesday’s trading session.
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The latest plan goes right to the heart of Microsoft’s AI ambitions, as it seems to be making its own artificial intelligence, spurning the OpenAI models that got it this far. Microsoft intends to bring out the same quality of AI with its new models, just with nowhere near so much OpenAI involvement. The matter is one of costs, as the cost of OpenAI models has been on the rise, and Microsoft wants to save a few bucks and make its own house-brand AI. At last report, Microsoft has dispatched a 1,500-researcher-strong team to build a conversational AI.
But it actually goes deeper than that. A separate report noted that Microsoft may be cutting its orders with Nvidia (NASDAQ:NVDA). The orders Microsoft was putting out for H100 AI chips may be sliced, and that, in turn, comes with reports that ChatGPT traffic actually went down somewhat over the summer. That’s prompting concerns that AI may be something of a flash in the pan, and investors will have to lengthen their timelines to find true glory in AI.
Is Microsoft Stock a Buy Right Now?
Turning to Wall Street, Microsoft stock is currently rated a Strong Buy thanks to 30 Buy recommendations and four Holds. Plus, with an average price target of $397.19, Microsoft stock boasts a healthy 27.8% upside potential.
