When it comes to publishing these days, ad sales are a huge part of the process. But ad sales are proving increasingly difficult for all sides these days, buyers and sellers alike. In fact, a recent Wall Street Journal report noted that tech giant Microsoft (MSFT) has a blacklist of over 2,000 words that cannot be said in text surrounding an ad. This profoundly persnickety approach is hurting Microsoft with investors, as shares were down modestly in Thursday afternoon’s trading.
Don't Miss Our New Year's Offers:
- Discover the latest stocks recommended by top Wall Street analysts, all in one place with Analyst Top Stocks
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
The report noted that the blacklist includes some reasonable, if concerning points. For instance, likely in a bid to avoid associations with politics, the words “Trump” and “Biden” are part of the blacklist. The words “cocaine” and “guns” are also involved. But so too are entire locations like “Gaza”, and natural disasters like “sink hole.”
Essentially, publishers note, these blacklists become a “news-blocking tool,” which keeps advertisers from placing ads near any form of news at all out of concern for the news being too offensive to advertise alongside. And while this certainly contributed to softness in the advertising market, which started up about three weeks before the election, others noted that “positivity, happiness and holiday joy” was in short supply in 2024, mostly because of, again, the election.
An Unexpected Reveal
But Microsoft also took an unexpected step, noted a report from Analytics India Magazine. The report suggested that Microsoft may have spilled the tea on OpenAI, noting parameter counts for several AI models. The report noted that Microsoft suggested Claude 3.5 Sonnet has 175 billion parameters, and the o1 Preview has nearly double that at 300 billion.
The small models got similar reveals, with o1 Mini said to be at 100 billion parameters, and the GPT 4o Mini running at eight billion. These unexpected numbers prompted a lot of speculation, with the chief technical officer of Hyperbolic Labs, Yuchen Jin, asking if GPT 4o mini could be open-sourced. Such a move made sense, Jin noted, by declaring that it “…could run on our local devices.”
Is Microsoft a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Strong Buy consensus rating on MSFT stock based on 27 Buys and two Holds assigned in the past three months, as indicated by the graphic below. After a 13.09% rally in its share price over the past year, the average MSFT price target of $503.61 per share implies 18.90% upside potential.
