Why AI Stocks Microsoft and AMD Popped Today
What happened
Shares of Microsoft (NASDAQ: MSFT) and Advanced Micro Devices (NASDAQ: AMD) climbed on Tuesday. Microsoft's partner, OpenAI, debuted a powerful new artificial intelligence model, while AMD launched a new line of cutting-edge processors.
So what
OpenAI unveiled GPT-4, the latest generation of its large language models (LLMs), which are trained on massive amounts of data and can be used to power AI applications. OpenAI used previous versions of its LLMs to build and operate its wildly popular AI bot, ChatGPT.
GPT-4 is an even more powerful model that can solve difficult problems with improved accuracy, according to OpenAI. It's also multimodal, meaning that it can accept both text and image inputs.
OpenAI trained GPT-4 on Microsoft's Azure AI infrastructure. The two companies also struck a multibillion-dollar partnership in January. Since then, Microsoft has integrated OpenAI's technology into its Bing search engine and several of its other products and services.
AMD, meanwhile, announced its latest generation of EPYC Embedded processors. The high-performance and energy-efficient 9004 Series chips are geared toward the embedded networking, cloud computing, and industrial markets.
Now what
Microsoft and AMD both stand to profit handsomely from the AI revolution. Microsoft's Azure cloud infrastructure platform, which is designed to efficiently power AI workloads, is likely to see booming demand for its computing services in the coming years. It also doesn't hurt that Microsoft is OpenAI's exclusive cloud provider, as ChatGPT is the most popular AI chatbot in the world today.
AMD is also likely to enjoy surging demand for its highly regarded chips. CEO Lisa Su knows that AI will be vital to the chipmaker's future. She's deftly positioning the semiconductor leader to power the AI megatrend -- and deliver more gains to its investors along the way.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices and Microsoft. The Motley Fool has a disclosure policy.
