For some time now, Microsoft (NASDAQ:MSFT) has served as a backer for OpenAI, a company that has not yet gone public but might make a serious splash when it does. But then, a series of changes started slamming into OpenAI. First, OpenAI CEO Sam Altman jumped ship to Microsoft. Then the fallout began, and Microsoft lost just a little ground in Tuesday morning’s trading session.
Microsoft, via CEO Satya Nadella, noted that there would likely be no long-term damage to OpenAI without Sam Altman around and that “…something had to change around the governance” at OpenAI. But Nadella also noted that, as far as Microsoft was concerned, it didn’t matter much either way. Nadella stated that OpenAI employees could stay in their current roles or move to Microsoft, as Microsoft already had what it needed to innovate by itself.
Much Still Left Unresolved at OpenAI
Yet, even as one key factor seems to have been cleared up, there’s still quite a bit left unresolved. For instance, there’s still the matter of a potential lawsuit yet to come, as some of OpenAI’s investors are considering their legal options against OpenAI’s board. Indeed, investors are worried that they may lose hundreds of millions of dollars amid fears of a potential collapse.
Is Microsoft a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on MSFT stock based on 32 Buys and one Hold assigned in the past three months, as indicated by the graphic below. After a 53.29% rally in its share price over the past year, the average MSFT price target of $410.03 per share implies 10.13% upside potential.
