TLDR
- Microsoft stock rose 2% to $542.07, pushing market cap to $4.04 trillion on Tuesday
- Company acquired 27% stake in restructured OpenAI valued at $135 billion
- Exclusive API and intellectual property rights secured through 2032
- Analysts set average price target at $631.12, showing 16% upside potential
- OpenAI committed to $250 billion in Azure cloud services purchases
Microsoft reclaimed its position in the exclusive $4 trillion valuation club on Tuesday. Shares climbed 2% to close at $542.07, valuing the company at $4.04 trillion.
The rally followed news of a restructured partnership with OpenAI. The ChatGPT maker announced its conversion to a public benefit corporation.
Both Delaware and California attorneys general approved the restructuring plan. This clears the way for OpenAI to raise additional capital.
Microsoft now holds a 27% stake in the new OpenAI entity. That position is valued at $135 billion under the agreement.
The tech giant previously hit $4 trillion in July. It became only the second company after Nvidia to reach that level.
Apple briefly crossed $4 trillion earlier the same day. The company closed just below at $3.99 trillion.
Deal Terms and Exclusive Rights
The partnership agreement includes several key components. OpenAI will purchase Azure cloud services worth $250 billion over time.
Microsoft received exclusive intellectual property rights through 2032. These rights extend to OpenAI’s API access as well.
The exclusivity continues even after artificial general intelligence development. This provides long-term protection for Microsoft’s investment.
Goldman Sachs analyst Kash Rangan maintained his $630 price target. He highlighted the clear technology ownership structure between both companies.
Morgan Stanley analysts called the deal a resolution to Microsoft’s top investor concern. The firm praised revenue sharing terms and API exclusivity provisions.
Analyst Outlook and Earnings
Microsoft carries a Strong Buy consensus rating from Wall Street. Thirty-three Buy recommendations support this rating from the past three months.
The average analyst price target stands at $631.12. This implies over 16% upside from current trading levels.
William Blair analyst Jason Ader acknowledged potential headwinds. Cloud market competition and on-premises software shifts could pose challenges.
However, Ader believes the advantages outweigh risks. The deal strengthens Copilot initiatives and creates Azure monetization opportunities.
Evercore ISI joined Morgan Stanley in praising the agreement. Multiple firms upgraded their outlooks following the announcement.
Q1 Earnings Ahead
Microsoft reports first quarter fiscal 2026 results Wednesday after market close. Options traders anticipate higher volatility than typical post-earnings moves.
The $250 billion Azure commitment addresses investor concerns. It positions Microsoft to compete with OpenAI’s $300 billion Oracle cloud deal.
The public benefit corporation structure removes OpenAI’s capped-profit limitations. This format allows pursuit of both shareholder returns and public benefits.
The new agreement grants Microsoft extended API rights. These rights now cover post-AGI models as well.
Analysts expect growth in the Intelligent Cloud segment. Azure services drive this division’s performance.
Microsoft’s restructured OpenAI partnership includes revenue sharing arrangements. These terms provide near-term tactical benefits according to Morgan Stanley.
The post Microsoft (MSFT) Stock: Crosses $4 Trillion Mark on OpenAI Partnership News appeared first on Blockonomi.
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This articles is written by : Nermeen Nabil Khear Abdelmalak
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