The Nasdaq led Wall Street gains as heavyweight Microsoft hit a record high after it hired prominent artificial intelligence executives. The S&P 500 and Dow also posted robust gains.
Microsoft is journeying to become a “truly Intelligence Driven Organization.” This is a monumental undertaking that requires every person in the company to break down siloes, work differently, experiment more, and learn from failure. Everyone needs to align around a vision that inspires real change and commit to transforming processes.
It’s a journey that started with CEO Satya Nadella transforming and prioritizing the transformation. He announced last year that the company will shift its focus from being product-first to more data-driven. That meant investing in AI, building a new team, and empowering employees to make decisions independently. It was a big transition, but one that’s starting to pay off.
And this week, Microsoft delivered another solid quarterly earnings report. Its results were even better than expected, a welcome relief for investors. The stock rose nearly 2% on Monday and is trading at its highest level in over three years.
Some analysts believe that the turmoil at OpenAI over the weekend ultimately worked out for the best for the technology giant. The company was able to lure Sam Altman, the former CEO of the generative artificial intelligence startup, into a high-level position. Altman is expected to head a new advanced research team at Microsoft. The hiring has sent shares of the software giant higher and has boosted other mega-cap tech stocks like Nvidia and Apple.
The Nasdaq boasted its highest closing level since July 31, while the S&P 500 registered its highest close since Aug. 1. The S&P 500’s information technology sub-index (.SPLRCT) ended up 1.5% and was the top gainer among the S&P 500’s 11 major sectors. Its most considerable boost came from a 7% surge in Nvidia, the world’s most valuable listed chipmaker. The stock soared after it forecasted quarterly revenue that was well above expectations and said it was ramping up production of its GPU chips.
The market also appreciates a stronger-than-expected earnings season and the ongoing trend of falling Treasury yields, which has bolstered investors’ confidence. But investors are also grappling with the one-two punch of economic uncertainty and a violent uprising over the killing of an unarmed black man in Minneapolis. That’s why some analysts are worried about the current rally and warn that stocks could fall back to their recent lows over the next few months. The indexes have risen more than 40% from their March lows.