Microsoft and ChatGPT Encounter Upgraded Rival in the AI Arena

Magnificent Seven tech stocks, including Nvidia (NVDA), Microsoft (MSFT), Amazon.com (AMZN), and Meta Platforms (META), continue to exhibit strength as 2024 kicks off. Google (GOOGL) stock, part of this elite group, stays in the buy range as Alphabet introduces a major upgrade to its AI assistant, Google Bard.

The upgrade, known as Gemini Ultra, marks a significant development in the ongoing competition of AI-driven chatbots. It particularly intensifies the battle between Google Bard and Microsoft Copilot, which integrates Bing search with ChatGPT.

Gemini Ultra, Google’s most advanced model, introduces multimodal reasoning capabilities and can operate across various platforms, from data centers to mobile devices. The rollout of Gemini Ultra began in two stages, with Bard using a tuned version of Gemini Pro for more advanced capabilities in December. Google plans to introduce Bard Advanced this year, providing users access to Gemini Ultra.

In terms of stock performance, three members of the Magnificent Seven—Nvidia, Meta, and Tesla—were among the best stocks of 2023. While Meta and Nvidia stocks approach record highs, Tesla stock has declined below key moving averages.

Google stock remains in the buy range, along with Microsoft and Amazon. Alphabet cleared a buy point of 139.42 in a cup with handle on Dec. 20. The stock exhibited institutional demand with several days of heavy volume leading to the breakout. Alphabet is set to report its Q4 and full-year 2023 performance on Jan. 30, with analysts forecasting a 23% gain in earnings per share.

Microsoft, also reporting on Jan. 30, attracted significant interest from top investors this month, with approximately $17.4 billion worth of Microsoft stock being acquired.

As the Q4 earnings season unfolds, investors are closely watching Alphabet, Meta, Amazon, Apple, and Microsoft. However, it’s important to note the risks associated with buying stocks just before their earnings reports.