Finimize - 📈 Microsoft's flying

What’s going on here?

OpenAI made sure that artificial intelligence was still on the main stage, and Microsoft’s stock shot to stardom straight after.

What does this mean?

ChatGPT’s creator OpenAI took to the stage earlier this week, reminding everyone – especially small, competing AI startups – that it’s the one leading the path to a dystopian future. Microsoft popped its head in too, making sure investors remember that as the owner of 49% of OpenAI, the tech titan is a direct beneficiary of all and any success. The point landed: Microsoft’s stock hit a new altitude after the developer event.

Why should I care?

Zooming out: Win-wins.

Not all of Microsoft’s success is down to that sweet talking, though. Investors are now pretty confident that the Federal Reserve is staying away from the rate-hiking pedal, which would release some of the pressure that’s weighing down stock prices. Remember, investors value stocks based on their future prospects, and higher rates reduce what a company’s future cash flows are worth today. Thing is, Microsoft likely has the heft it needs to stay stable even if rates end up ticking up or the economy tanks. And even if the stock slips, investors would simply see that as a chance to buy the goliath on the cheap.

For markets: Good things (might) come in threes.

AI investors can’t relax yet. Nvidia – high-tech chipmaker to the super-smart stars – reports its latest set of quarterly results on November 21st, and the stats will offer breadcrumbs about how the AI trend as a whole is doing. Nvidia’s predicted revenue of $16 billion, and more importantly, Wall Street wizards have pinned hopes for this quarter’s takings near the $18 billion mark. But because China’s lagging economy may drag down sales of the company’s chips, Nvidia’s own forecasts will be the ones to watch.

What’s going on here?

BlackRock announced plans to invest $550 million in Occidental Petroleum's controversial carbon-capture project.

What does this mean?

Occidental’s ambitious Stratos project is one for the science buffs, aiming to become the world’s go-to facility for “direct air capture” (DAC). That’s a revolutionary technology that extracts carbon dioxide from the atmosphere, before using it to make building materials, agricultural products, and fuel. Stratos should start operating commercially in 2025, and has already attracted buy-ins from heavyweights Amazon and Airbus. And with goals to neutralize the carbon equivalent of one million barrels of oil a year, the project could play a part in the International Energy Agency’s net-zero plans. But here’s the catch: environmentalists have criticized the project’s plans to pump captured carbon dioxide into old oil reservoirs to make more dirty crude oil. BlackRock’s already sold, though, because the firm’s $550 million investment makes up 40% of the project’s total cost, and is one of the biggest financial commitments to DAC technology so far.

Why should I care?

For markets: Mining for silver linings.

There’s turning lemons into lemonade, and then there’s turning climate threats into money-making opportunities. BlackRock’s clearly out to squeeze some lemons, with the firm’s CEO saying the future’s “multibillion-dollar success stories” will be energy companies that invest in tech like DAC. And it’s not the only believer: Occidental was the S&P 500’s top performer last year, and counts Warren Buffett as its biggest shareholder.

The bigger picture: The gang’s all here.

Carbon capture technology is still in its infancy, with few major success stories and plenty of project failures in its history. But BlackRock’s support is a nod to the tech’s mounting credibility. The US government’s on board too, granting carbon capture companies major tax breaks and over $1 billion in investments. No wonder fashion retailer H&M, JPMorgan Chase, UBS, and SwissRe have started spending in the space as well.