Microsoft's bet on AI has paid off: shares hit a new high. What's next?

Microsoft shares ended trading on June 5 at a record high, hitting their high for the first time in a year. Investors increasingly see the tech giant as one of the main beneficiaries of the artificial intelligence era, write Bloomberg. The software developer and cloud storage owner is currently the most valuable company in the world, ahead of chipmaker Nvidia in terms of capitalization.

In trading on June 5, Microsoft shares rose by 0.8% and ended the session at $467.68, exceeding the high of last July. Since the April low, the quotes have risen by more than 30%, adding over $800 billion to Microsoft's capitalization. The company is now valued at about $3.48 trillion and is the most expensive in the world, ahead of Nvidia ($3.42 trillion).

Since the beginning of the year, Microsoft's securities have risen 11%, outperforming the Nasdaq 100 index. In its latest report, the company showed strong growth in demand for cloud solutions and AI services, cementing Microsoft's reputation as an «island of stability» amid trade duties and a volatile macroeconomic environment, wrote Bloomberg. 

Microsoft CEO Satya Nadella, in an interview Thursday emphasized the company's close relationship with startup OpenAI, which developed ChatGPT. «Why would any of us want to ruin that?» - he said, referring to the partnership with OpenAI.

Back in January, Nadella told analysts that OpenAI had made a major new commitment to Microsoft's Azure cloud platform, reminds CNBC. Microsoft's total investment in OpenAI is currently valued at about $14 billion.

At the same time, the company continues to aggressively cut staff: one way to keep AI-related costs under control, Bloomberg notes.

«Microsoft is well positioned across all product lines and really knows how to monetize AI. I think in three to four years, we'll see that it's one of the companies that has benefited the most from the development of artificial intelligence,» Clearstead Advisors Senior Managing Director Jim Awad told Bloomberg.

According to Bank of America, Microsoft shares are in the portfolios of 91% of traditional funds with long positions, making the tech giant's securities the most popular. More than 90% of analysts tracked by Bloomberg recommend buying Microsoft stock. None of them advise selling. The average target for the stock suggests a 9% growth rate over the next 12 months.

«Microsoft will continue to grow at an impressive rate, and its stock can't be called overvalued. Yes, it is sometimes alarming when everyone thinks alike. But in this case, I think the consensus is right,» Aouad added.