Microsoft Stock News: MSFT rises on AI search integration, gives jolt to NVDA, AMD stocks

Microsoft (MSFT) stock is riding high once more on Wednesday. Shares of the tech giant are up another 2.1% in Wednesday's premarket after Tuesday's news that it would be integrating artificial intelligence technology with its Bing search engine pushed the stock up 4.2%. Microsoft is now worth over $2 trillion for the first time in nine months.

Meanwhile, Nvidia (NVDA) and Advanced Micro Devices (AMD) also surged forward as investors grow excited that the age of AI will mean plenty of more business for these top-tier AI chip designers.

Microsoft stock news: AI search could mean more market share

Since Alphabet (GOOG) has held a near monopoly on search for more than a decade, something around 90%, Microsoft's Bing has remained a distance #2. CEO Satya Nadella announced Tuesday that a search-focused AI technology from OpenAI, the same company that built the wildly popular AI chatbot ChatGPT, will be intregrated into Bing shortly. The AI-enhanced Bing should be able to narrow down results more accurately with users supplying longer, more verbal-like commands and sentences.

"I think this technology is going to reshape pretty much every software category," Satya Nadella said at Microsoft's Washington state headquarters.

Just in January reports emerged that Microsoft invested $10 billion in OpenAI. The investment gave OpenAI a $29 billion private market valuation. Microsoft had already investsed $1 billion in OpenAI back in 2019 when the two companies began working together on creating an artificial general intelligence technology that could work with Microsoft's Azure cloud product. The $10 billion investment gives Microsoft the right to 75% of OpenAI's profits until the larger company gets paid back. After that Microsoft's share of OpenAI gets pushed down to 49%.

Microsoft's Nadella also unveiled a new AI-enhanced version of its web browser – Microsoft Edge. The web browser will now use AI capabilities for its chat function, search and writing. 

More than 65 million shares of Nvidia traded on Tuesday, nearly 20 million more than the average. This is because Microsoft had announced spending cuts during its earnings call several weeks ago that the market thought may affect Nvidia. Now that Microsoft has unveiled its major push into AI-enhanced search, the market foresees heavier than normal orders for Nvidia's A100 and H100 AI-focused integrated circuits. Besides Nvidia's chips, AMD's MI250 integrated circuits are next in line for AI workloads. This is why both chipmakers saw their shares rise so strongly.

Fallout from Federal Reserve Chair Jerome Powell's speech on Tuesday has, however, begun affecting the market on Wednesday. Initial excitement of Powell's view that the Fed's interest rate hikes are working got washed away by the larger view that those interest rates are unlikely to be cut anytime soon.

Microsoft, Nvidia stock forecasts

This uptrend on Tuesday and Wednesday has pushed Microsoft stock well above the $264 resistance point from mid-December. At that time MSFT stock hit a roadblock at that price and then sank below $215 over the next few weeks. Now bulls must have their sights set on $294. That is the range high from mid-August of last year. A few more good days like that in February, and bulls will have received their price target. On the other hand if the stock consolidiates, then $264 may become support or else the 9-day moving average, which is currently at $254.

MSFT daily chart

Nvidia stock's weekly chart below shows that the share price is currently up against the resistance window between $225 and $230. That region has worked as support and resistance since the summer of 2021, so it bears some real significance. A break through that barrier would place the next price target at the supply zone above $280. 

Support sits between $190 and $193. The 4-week moving average, now at $203, should also provide support in the case that the $230 level cannot be broken. NVDA shares are not yet in overbought territory though on the Relative Strength Index (RSI).

NVDA weekly chart