OpenAI may be valued at more than $100B in new funding round - WSJ
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Aug 28 2024
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Should l Buy MSFT?
Source: SeekingAlpha
OpenAI's New Funding Round: OpenAI is seeking to raise several billion dollars in a funding round led by Thrive Capital, potentially valuing the company at over $100 billion, with Microsoft also expected to participate.
Valuation and Previous Investments: The startup was previously valued at $86 billion last year, and current negotiations suggest a valuation of around $103 billion, marking the largest fundraising effort since Microsoft's $10 billion investment in January 2023.
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Analyst Views on MSFT
Wall Street analysts forecast MSFT stock price to rise
34 Analyst Rating
32 Buy
2 Hold
0 Sell
Strong Buy
Current: 429.250
Low
500.00
Averages
631.36
High
678.00
Current: 429.250
Low
500.00
Averages
631.36
High
678.00
About MSFT
Microsoft Corporation is a technology company. The Company develops and supports software, services, devices, and solutions. The Company’s segments include Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. The Productivity and Business Processes segment consists of products and services in its portfolio of productivity, communication, and information services. This segment primarily comprises: Office Commercial, Office Consumer, LinkedIn, and Dynamics business solutions. The Intelligent Cloud segment consists of server products and cloud services, including Azure and other cloud services, SQL Server, Windows Server, Visual Studio, System Center, and related Client Access Licenses (CALs), and Nuance and GitHub; and Enterprise Services, including enterprise support services, industry solutions and Nuance professional services. The More Personal Computing segment primarily comprises Windows, Devices, Gaming, and search and news advertising.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- AI Business Surge: The AI segment achieved an annual recurring revenue of over $37 billion, up 123%, indicating significant returns on investment in AI and suggesting future revenue growth potential.
- Capital Expenditure Plans: The company expects capital expenditures to reach approximately $190 billion for calendar year 2026, with Q4 spending projected to exceed $40 billion, demonstrating a strong commitment to infrastructure expansion to meet rising market demand.
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See More
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- Positive Financial Outlook: Microsoft's CFO noted that the revenue-sharing agreement extending to 2030 offers predictable income streams, and the elimination of revenue sharing with OpenAI is expected to benefit its future financial performance, enhancing investor confidence in the company's financial health.
- Azure Sales Growth: Microsoft reported a 39% increase in Azure sales last quarter, surpassing analysts' expectations of 38%, with a forecasted 40% growth for the current quarter, although its growth rate still lags behind Google Cloud and Amazon Web Services, indicating ongoing competitive pressures in the cloud market.
- Capital Expenditure Plans: Despite exceeding revenue and profit expectations, investor concerns over Microsoft's capital expenditure plans of $190 billion for 2026, compared to a consensus of $154.6 billion, may negatively impact short-term stock performance, reflecting market caution regarding the company's future investment returns.
See More
