Artificial intelligence (AI) is a bit of a controversial subject these days. Some are convinced it is about to usher in the end of the world as we know it, while others believe we are about to get something a lot better out of the deal. Tech giant Microsoft (MSFT) is doing its part to advance AI, either way, and is currently in talks with Anthropic to offer up servers powered by chips Microsoft itself designed. The end result left investors a bit cold, and Microsoft shares slipped fractionally in Thursday afternoon’s trading.
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If the deal goes through as hoped, reports note, it will be a substantial step forward for Microsoft’s chip operations. But the talks only recently began, reports note, and that leaves the very real possibility that nothing may come of the deal. But given that several other big-name players in the space are doing something similar, Microsoft landing a client for its own efforts on that front should mean good news.
Reports also note that Microsoft has designed its chip to be laden with SRAM, a kind of memory that works particularly well with chatbots and AI tools. Apparently, SRAM works especially well when fielding large numbers of queries at the same time. This is exactly the kind of use case that AI tools will find themselves most frequently involved in, so the Microsoft chips might be just the tool AI needs.
New Hire for Xbox
Meanwhile, Microsoft also brought in an analyst from the video game market to give it some insights and fuel what it hopes will be an Xbox revival in its 25th anniversary. The new chief strategy officer at Xbox is Epyllion CEO Matthew Ball. Ball has held multiple strategy and leadership roles before this move, and has actually been working with Xbox for some time now.
This move comes at a difficult time for Xbox. With the Steam Machine from Valve potentially ready to undercut Microsoft’s Project Helix, and run for around a year and a half before Microsoft releases its own new console, something needs to be done, and quickly, to get Microsoft back in customers’ minds. The 25th anniversary year is nearly half over, and not much has come out about Microsoft’s future plans. It needs a clear strategy, and as soon as possible.
Is Microsoft a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Strong Buy consensus rating on MSFT stock based on 33 Buys and two Holds assigned in the past three months, as indicated by the graphic below. After an 7.63% loss in its share price over the past year, the average MSFT price target of $559.98 per share implies 34.1% upside potential.
