Microsoft's $1 Billion Investment in OpenAI Yields $135 Billion Stake

"...not everyone thought much of it..."

"...downright disastrous assessment..."

"...That turned out to not be the case, however..."

"...Though you would not know it to look at Microsoft shares today..."

"...Microsoft shares are down nearly 2% in Friday afternoon’s trading..."

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"...so most likely believed that monetizing it was going to be a nightmare..."

"...Indeed, it ultimately did, reports noted..."

"...But it took several years and $13 billion worth of investment to get there..."

"...That might sound like a lot, but it pales in comparison to the $135 billion worth of OpenAI that Microsoft now owns with a 27% stake in the company..."

"...Good Timing..."

"...The news that Microsoft’s OpenAI stake is now worth a bundle comes at a welcome time..."

"...as reports note that Microsoft’s Xbox hardware is still in open decline..."

"...Reports note that Xbox hardware revenue is down 29% against this time last year..."

"...and breaking the picture down by quarters only gets worse..."

"...With Microsoft hiking console prices, that only makes things worse..."

"...However, this really should be expected..."

"...The biggest time for console hardware sales is right about the time the console comes out, within two years or so of launch..."

"...Once most users actually have one, buying a second makes little sense unless the first is irredeemably broken..."

"...And with another likely to come out in the next two years or so, the hardware market is likely sitting out until the next launches start..."

"...Is Microsoft a Buy, Hold or Sell?..."

"...Turning to Wall Street, analysts have a Strong Buy consensus rating on MSFT stock based on 33 Buys assigned in the past three months, as indicated by the graphic below..."

"...After a 28.12% rally in its share price over the past year, the average MSFT price target of $632.78 per share implies 22.45% upside potential..."

"...See more MSFT analyst ratings..."

"...Disclosure..."