Thanks for this interesting exercise. The one caveat I’d note is that the multiplier you use is based on annual revenue—if the remittances from OpenAI to MSFT occur over a number of years, we would need to divide the $1T number that you calculate by that number of years.
Microsoft has now officially announced their investment and their stock is up ~1% but that’s within normal daily variance. Probably the deal was considered likely enough to go through that a lot of the assumed benefit from this deal was already priced in before the official announcement, but I think it’s pretty hard to look at a graph of Microsoft stock price and claim that the market is pricing in substantial benefits in the next year.[1]
fwiw, I’m considering this a market inefficiency and purchasing Microsoft stock as my only non-index fund holding. Feel free to check in with me next year and see how much I regret this.
Thanks for this interesting exercise. The one caveat I’d note is that the multiplier you use is based on annual revenue—if the remittances from OpenAI to MSFT occur over a number of years, we would need to divide the $1T number that you calculate by that number of years.
(PS: amazing tiktoks)
Microsoft has now officially announced their investment and their stock is up ~1% but that’s within normal daily variance. Probably the deal was considered likely enough to go through that a lot of the assumed benefit from this deal was already priced in before the official announcement, but I think it’s pretty hard to look at a graph of Microsoft stock price and claim that the market is pricing in substantial benefits in the next year.[1]
PS: thanks :)
fwiw, I’m considering this a market inefficiency and purchasing Microsoft stock as my only non-index fund holding. Feel free to check in with me next year and see how much I regret this.