Technology giant Microsoft (NASDAQ: MSFT) has rallied in recent months, mainly due to its involvement in the artificial intelligence (AI) scene.
Indeed, part of the company’s AI venture was driven by its investment in OpenAI, the firm behind the successful generative AI tool ChatGPT. Microsoft is now under the spotlight after announcing its exit from the OpenAI board.
This decision was made to ease US and UK antitrust regulators’ concerns about the extent of its control over the AI startup.
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Considering that OpenAI has been central to Microsoft’s prospects in recent months, it is worth examining how the stock will likely trade in the coming months. Finbold consulted OpenAI’s latest AI tool, ChatGPT-4o, to predict MSFT’s share price for the next 12 months. The tool provided both optimistic and bearish scenarios for the stock.
MSFT’s optimistic scenario
In an optimistic scenario, ChatGPT-4o noted that Microsoft’s continued expansion in AI and cloud computing could substantially boost its stock price. Despite regulatory challenges, the company’s investments in AI are expected to lead to significant revenue growth from new services and products.
Additionally, Azure’s growth could outpace competitors like Amazon Web Services and Google Cloud, solidifying Microsoft’s market position. Consistently exceeding earnings expectations across its cloud, enterprise software, and gaming sectors would further enhance its financial performance.
Successfully addressing regulatory issues would also bolster investor confidence. Under this scenario, ChatGPT-4o predicts that Microsoft’s stock could rise by 15-25%, reaching between $530 and $580 in the next 12 months.
MSFT’s bearish scenario
Conversely, several risks could drive Microsoft’s stock down. The AI tool noted that heightened regulatory scrutiny could result in significant fines or operational limitations, hampering growth. Increased competition from rivals in AI and cloud computing might erode Microsoft’s market share.
A broader economic slowdown could reduce corporate IT and cloud spending, impacting revenue. Additionally, issues with product launches or the integration of acquisitions could create operational setbacks.
Under these circumstances, Microsoft’s stock could decline by 10-20%, potentially dropping to $370-$415.
Microsoft in a stable environment
ChatGPT-4o also stated that a balanced view considers steady growth without major disruptions. Continuous progress in key business segments and manageable compliance costs from regulatory scrutiny would support moderate growth.
Maintaining a competitive stance in the market without significant gains or losses and stable economic conditions would further bolster Microsoft’s position. In this case, ChatGPT-4o forecasts a modest 5-10% increase in Microsoft’s stock, bringing it to $485-$510.
In summary, the AI platform advised investors to monitor new regulations or fines affecting AI and cloud operations, insights from quarterly earnings reports on financial health and growth prospects, broader market and economic trends influencing investor sentiment, and competitive moves by rivals that could alter Microsoft’s market position.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
