For a while there, Nvidia (NASDAQ:NVDA) had things all its own way, particularly when it came to chips for artificial intelligence (AI) applications. But now, there’s a new player in town, as Microsoft (NASDAQ:MSFT) is stepping up and bringing out a new chip that should be a match for anything Nvidia’s got on hand. Microsoft investors weren’t particularly enthusiastic, though, as shares were down fractionally in Wednesday afternoon’s trading.
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Microsoft took to its Ignite conference to show off a pair of new chips, one that might set Nvidia’s teeth on edge. Known as the Maia 100, it’s a chip specifically geared toward AI applications. Further, reports suggest that it’s likely on par with Nvidia’s own lineup, and may represent a significant competitor going forward. That wasn’t all that Microsoft brought out, though; it also brought out the Cobalt 100, which is a more general-purpose processor and is said to be on par with the kind released from Intel (NASDAQ:INTC). That alone is a staggering notion; consider for a moment how most of the world’s PCs run on Microsoft software. Now they may also run on Microsoft hardware.
Microsoft is Already Getting to Work
Here’s a particularly unnerving point for Microsoft competitors: these new chips won’t be hitting the market in a few years, but rather, a few months. Reports note that, for cloud users, virtual machines powered by Cobalt chips will be on hand starting in 2024 via the Azure cloud. However, there were no release dates mentioned for the Maia 100. The Cobalt will likely prove trouble enough, however, as it’s a 64-bit processor complete with 128 computing cores. That gives it plenty of power, and uses less energy as well: the Cobalt 100 provides a 40% reduction in power used, which will likely prove welcome for power-intensive applications like data centers.
Is Microsoft a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on MSFT stock based on 30 Buys and one Hold assigned in the past three months, as indicated by the graphic below. After a 53.53% rally in its share price over the past year, the average MSFT price target of $408.76 per share implies 10.84% upside potential.
