Microsoft downgraded due to AI competition from Amazon and Google, facing challenges with Nvidia chips.

From Nasdaq: 2024-10-10 06:30:00

Microsoft, the leader in AI among cloud giants, faces concerns as analysts suggest rivals have caught up. D.A. Davidson downgrades Microsoft to “neutral” despite its strong software and cloud businesses. Amazon and Google are seen as strong competitors in AI, with cost advantages due to their own AI accelerators. Microsoft may face challenges due to reliance on expensive Nvidia chips.

Analyst Gil Luria downgrades Microsoft, citing Amazon and Google’s AI advancements. Microsoft’s lead in AI may be diminishing, as rivals introduce competitive solutions. The cost advantage from Amazon and Google’s own AI accelerators poses a challenge to Microsoft’s high-priced Nvidia chips. Microsoft’s revenue contribution to Nvidia is significant compared to Amazon and Alphabet.

Despite challenges, Microsoft is seen as a solid investment alongside Amazon and Google in capturing AI opportunities. While competition is fierce, Microsoft remains a strong player in the AI space. As the AI race heats up, each major cloud provider is poised to benefit from the AI revolution. Microsoft, Amazon, and Google are positioned for success in AI with their capital and technical capabilities.



Read more at Nasdaq: Microsoft Just Got Downgraded — and It All Has to Do With Nvidia