Microsoft's Winning Streak Continues Amid AI Hints and Legal Challenges

As of last week, Microsoft's stock (MSFT) rose by 0.84%, marking a five-day winning streak with a 7.19% increase over the past five days. Year-to-date, the stock has gained 15.2%, reflecting a robust market performance and boasting a market capitalization of $3.2 trillion.

During a recent interview at a technology summit, Microsoft's CTO, Kevin Scott, hinted at the potential launch of a significant new AI model or product by the end of the year. Although he refrained from sharing specific details, Scott emphasized the strong partnership with OpenAI, creators of Chat-GPT, highlighting its importance to Microsoft. He remarked that forthcoming developments would be apparent to those watching closely, noting that the work on GPT-4 continues.

Scott underscored that the AI evolution is still in its early stages, urging caution against hype, yet recognizing AI's increasing power. He made comparisons to previous technological revolutions such as the internet and smartphones, suggesting that the current AI progression could be happening at an unprecedented rate, facilitated by faster data center constructions.

Microsoft is also leveraging its gaming division by planning to add "Call of Duty: Black Ops 6" to its Xbox Game Pass lineup. This move is aimed at boosting subscribers after having laid off over 2,500 personnel this year and implementing price increases for its subscription services. Despite these efforts, third-party research indicates that growth in subscription services in North America has plateaued.

Additionally, Microsoft recently announced initiatives to bolster Windows security features following a major outage caused by Crowdstrike software issues. Key future security enhancements include reducing kernel-level security software for improved compatibility with platforms like Linux, which could benefit gaming devices such as the Steam Deck.

Another development involves Microsoft being implicated in a lawsuit filed by semiconductor firm Xockets, which accuses both Microsoft and Nvidia of patent infringement related to data processing technology. Xockets alleges that these infringements contribute to a monopoly in the AI platform sector. Microsoft and Nvidia are also accused of colluding to suppress intellectual property prices.

Finally, Microsoft has unveiled the Windows Agent Arena benchmarking framework designed to evaluate generative AI performance on Windows PCs. Initial tests reveal significant gaps in AI capabilities compared to human benchmarks, with Microsoft's AI assistant Navi achieving considerably lower task success rates.