Wall Street kept celebrating on Tuesday, with the biggest gains going to the Dow Jones Industrial Average (^DJI 0.40%) this time around. Both the Nasdaq Composite (^IXIC 2.02%) and the S&P 500 (^GSPC 1.02%) also posted solid increases as investors remain upbeat about the prospects for the economy to remain resilient.
|
Index |
Daily Percentage Change |
Daily Point Change |
|---|---|---|
|
Dow |
+1.06% |
+367 |
|
S&P 500 |
+0.71% |
+32 |
|
Nasdaq |
+0.76% |
+109 |
Data source: Yahoo! Finance.
Two Dow stocks were instrumental in leading the rally on Tuesday. Microsoft (MSFT 1.82%) announced a key AI initiative that could become a massive moneymaker for the software company in very short order, while UnitedHealth Group (UNH 0.30%) got a vote of confidence from analysts on Wall Street. Read on for more of the details on both stocks.
Microsoft looks to cash in on AI
Shares of Microsoft rose 4% on Tuesday, hitting an all-time high. The software provider made an announcement about artificial intelligence (AI) that could have a massive impact on its relationship with its business customers.
The big news from Microsoft was that it released its pricing for its Microsoft 365 Copilot product for commercial customers. Copilot is intended to take clients' existing Microsoft 365 data and make it available to Microsoft's Bing Chat Enterprise platform to unlock generative AI features. Copilot will be available for a monthly fee of $30 per user under several of Microsoft's customer categories.
Other AI-related news included a collaboration with Meta Platforms (META 0.43%) under which Meta will use Microsoft's Azure cloud computing platform for building AI models. Meta is following a hybrid approach to AI, with some proprietary models along with a commitment to open-source models for more general use.
Microsoft has been one of the highest-profile companies to embrace AI, with its investment in OpenAI helping to give it expertise in the popular ChatGPT platform. That has built up its reputation, and its market capitalization is making its own run toward $3 trillion.
UnitedHealth gets some love
Elsewhere, shares of UnitedHealth Group were up more than 3%. Because of the $500 share price for the health insurance giant, its weight in the Dow is the highest of any of its 30 component stocks, and the gains for UnitedHealth today were tied to positive comments from stock analysts.
Analysts at Bernstein upgraded their rating on UnitedHealth stock from market perform to outperform. The move came with a very modest increase in their price target, lifting it just $8 to $603 per share.
In Bernstein's view, the market for the UnitedHealthcare insurance division is looking more attractive as pricing conditions improve in 2024. Moreover, the Optum division has the potential to capitalize on long-term growth trends in managed care, and its OptumInsights business looks particularly attractive because of its ability to make health information flows more efficient.
The comments come just after UnitedHealth's earnings report last week buoyed enthusiasm for the stock. With big gains in revenue and solid profitability, the company said that shareholders could expect profits for the full 2023 year to be at the high end of its previous guidance.
Everyone needs good healthcare, and UnitedHealth's combination of businesses covers all bases in providing the care that patients need. Bernstein isn't the only group of investors who think that things look positive for the company at the moment.
