Microsoft stock notches best week in nearly 8 years following SVB collapse, OpenAI's ChatGPT popularity
By Wallace Witkowski
Microsoft shares finish week up 12.4%
Microsoft Corp. shares rallied for their best week in nearly eight years as the collapse of Silicon Valley Bank and the popularity of OpenAI's ChatGPT drove investors to an established tech name with an interest in the next big thing.
Microsoft (MSFT) shares ended Friday with a 12.4% gain for the week, their best weekly gain since April 24, 2015, when shares surged 15% over the week after the company predicted growth in its cloud business.
Read: OpenAI launches 'safer' AI, GPT-4; Morgan Stanley one of its first customers
The tech giant was not only a beneficiary of last Friday's closing of Silicon Valley Bank, as investors sought safety in established tech names, but also benefited from its significant investment in privately held artificial-intelligence company Open AI, which is quickly becoming a household name as its ChatGPT AI model gains in popularity.
Read: SVB fallout likely to affect some software sales in the short term, and how startups are financed long term
Microsoft is already incorporating ChatGPT into its Bing search engine and Office 365 Copilot, which combines large-language models with a user's data to increase productivity. The Copilot system uses ChatGPT's latest version, GPT-4, which OpenAI released this past week
While the Federal Deposit Insurance Corp. and Federal Reserve took emergency measures to insure deposits over $250,000 at Silicon Valley Bank last weekend, continued turbulence in the regional banking sector, like First Republic Bank's (FRC)$30 billion infusion from the banking sector, has pushed investors to the security of established names in the tech sector, as the Nasdaq gained 4.5% on the week compared with a 1.6% gain on the S&P 500 index.
Read: Silicon Valley Bank's failure is an extinction-level event for startups, says Y Combinator's Garry Tan
Over the past 12 months, Microsoft shares have declined 5.4%, while the iShares Expanded Tech-Software ETF (IGV) is down 13.4%, the Dow Jones Industrial Average is off 7.6%, the S&P 500 index is off 11.2%, and the tech-heavy Nasdaq Composite Index is down 14.6%.
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March 17, 2023 16:56 ET (20:56 GMT)
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