Benzinga - by Zaheer Anwari, Benzinga Contributor.
- After achieving an all-time high in July 2023, Microsoft's stock has seen a 12% decline. However, with a year-to-date increase of 32%, there's potential for recovery and growth.
- Microsoft's acquisition aspirations of Activision Blizzard, valued at $69 billion, faced hurdles from the UK's CMA over cloud gaming dominance concerns.
Lately, they have made important choices that may have an impact on their stock trajectory.
Microsoft is planning to introduce a new version of Databricks software. Databricks is a well-known data analytics platform that utilizes artificial intelligence capabilities.
Their strategy is to make this software accessible through its Azure cloud server.
The importance of this strategic move cannot be overstated. Databricks offers businesses the ability to create AI models from scratch or customize existing open-source models, offering a strong alternative to licensing OpenAI's proprietary models.
However, it is worth considering that this development may strain Microsoft's relationship with OpenAI, as the new offering could be seen as direct competition.
Microsoft stock's future hangs in the balance as speculation looms. After reaching an all-time high in July 2023, the stock has plummeted 12% from its peak.
Despite still maintaining a 32% increase for the year, the recent dip has undeniably affected its overall annual growth.
The stock has demonstrated resilience and growth potential. Despite reaching a noteworthy peak of $366 in July, there is a promising opportunity for it to not only regain that level but potentially surpass it.
However, before achieving this ambitious goal, the stock must overcome two substantial obstacles. Surpassing the 2022 high of $338 and overcoming the major resistance stemming from the November 2021 high at $349.
Microsoft's strategic plan gains depth with the exciting prospect of acquiring video game powerhouse, Activision Blizzard.
Although the $69 billion deal faced opposition from the UK's Competition and Markets Authority (CMA) due to concerns about potential dominance in the cloud gaming industry, it signals Microsoft's ambitious growth strategy.
In an effort to address these concerns, they have made changes to the proposal. Specifically, the company will not include cloud rights outside Europe for current Activision games and future releases for the next 15 years.
If the CMA deems this adjustment satisfactory, the acquisition could be the boost Microsoft is looking for to drive up its stock price.
After the closing bell on Thursday, August 24, the stock closed at $319.97, trading down by 7.03%.
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