Microsoft has made a three-day rebound in price after a recent downtrend and seeks to push to resistance.
MSFT: Weekly Chart
The price of Microsoft stock trades at $334.27 after recently hitting highs near $370.
The price action of the stock is important because it has been a beneficiary of the AI hype this year, which some are starting to question.
“We are still in the relatively early stages” of a new tech cycle, said Jay Jacobs, BlackRock US Head of Thematic and Active Equity ETFs.
Jacobs said, “This is a $15 to $20 trillion theme over the coming decades. This is going to massively upend several aspects of the economy. Not just technology, but if we look at health care, if we look at services, if we look at productivity, it’s going to have a really incredible impact.
In a recent report titled, “Why AI is not a bubble?”, the Goldman analyst disputes any signs of this trend popping, saying, quote, “We believe we are still in the relatively early stages of a new technology cycle that’s likely to lead to further outperformance.”.
“The big takeaway here is that most of the AI stock market moves this year have been really concentrated in just a few names, some of these mega-cap tech names that, to be fair, are massive platforms and really some of the pioneers in the space,” Jacobs said.
But after seeing early hype and adjustments to market valuations, some companies are struggling to see gains. Shares in C3.ai fell on Thursday after the software maker reduced its target to turn into a profitable company by the fourth quarter of this fiscal year amid growing investments in artificial intelligence.
“Q1 results do not suggest that C3 is benefiting from growing demand for AI. Metrics such as average total contract value and a largely unchanged fiscal 2024 revenue outlook do not point to any meaningful AI tailwinds either,” BofA’s Brad Sills said to clients.
At Deutsche Bank, Brad Zelnick said in his note to clients: “C3.ai reported fiscal Q1 results that are unlikely to quell concerns about customer traction and commitments, the path to profitability, steady state margins of the business ex-Baker Hughes, and the level of generative AI monetization on its platform relative to management’s very bullish commentary.
For the likes of Microsoft, analysts are also looking to see if there is any traction on earnings beyond chipmakers like Nvidia in the early stages.
