The shares of Microsoft Corp. had 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.
shares ended Friday with a 12.4% gain for the week, their best weekly gain since April 24, 2015, when shares rose 15% over the week after the company forecast growth in its cloud business.
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Not only did the tech giant benefit from the closing of Silicon Valley Bank last Friday as investors sought safety in established technology names, but it also benefited from its significant investment in the private artificial intelligence company Open AI, which is rapidly becoming a household name as it ChatGPT AI model gaining popularity.
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Microsoft already integrates ChatGPT into its Bing search engine and Office 365 Copilot, which combines large language models with user data to increase productivity. The Copilot system uses the latest version of ChatGPT, GPT-4, which OpenAI released last week.
While the Federal Deposit Insurance Corp. and the Federal Reserve took emergency measures over the weekend to insure deposits of more than $250,000 at Silicon Valley Bank, turbulence in regional banking industries such as First Republic Bank’s FRC continued.
A $30 billion inflow from the banking sector has pushed investors to the safety of technology established names as the Nasdaq gained 4.5% this week compared to a 1.6% gain on the S&P 500 index.
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Over the past 12 months, shares of Microsoft are down 5.4% as the iShares Expanded Tech-Software ETF IGV,
is down 13.4%, the Dow Jones Industrial Average DJIA,
is 7.6% lower, the S&P 500 index SPX,
is down 11.2% and the tech-heavy Nasdaq Composite Index COMP,
decreased by 14.6%.