The market’s confidence regarding the potential of artificial intelligence (AI) has helped Microsoft Corp. shares rise to a fresh record high close on Thursday, helping the technology giant reach a record market valuation of $2.59 trillion.

Microsoft is seen as a pioneer in the software business when it comes to the use of AI technology thanks to its sizable investment in OpenAI, the San Francisco-based startup that created the hugely successful chatbot ChatGPT.

In an effort to challenge Alphabet Inc.’s Google’s hegemony, Microsoft started rolling out a number of AI enhancements, including ChatGPT, to Azure cloud services and its search engine Bing last month.

On Thursday, Microsoft’s shares ended the day up 3.2% at $348.10. On Nov. 19, 2021, the stock, which has increased more than 45% so far this year, closed at a record close of $343.11. On November 22, 2021, the stock reached an intraday high of $349.67.

Additionally, on Thursday, shares of Apple Inc. closed at a record high of $186.01, while those of the manufacturer of graphics chips, Nvidia, hit a brand-new intraday record of $432.89.

AI is driving demand for Microsoft’s products, according to JPMorgan analysts who raised their price objective on the stock of the business earlier on Thursday. Refinitiv statistics show that 44 out of the 53 analysts that track Microsoft recommended buying the company, with a consensus price target of $340.

JPMorgan analysts noted in a letter to clients that they “reaffirm our bullish-outlier perspective on generative AI and continue to see it fueling a resurgence of confidence in big software businesses.

Additionally, in April, Amy Hood, the head of finance at Microsoft, predicted that the company’s Azure cloud would increase by 26% to 27% year over year in constant currency in the fourth quarter, with AI services accounting for 1% of that growth. More information was offered by Hood on Monday during a public talk with Microsoft’s head of technology, Kevin Scott. Hood stated that “the next-generation AI business will be the fastest-growing $10 billion business in our history.”

Microsoft has made over $208 billion in revenue over the last four quarters.

We have many different ways that $10 billion in ARR will first manifest because it really is a very general platform, the speaker explained. Annual recurring revenue (ARR) is what it means.

Scott stated, “There are all the folks who want to come use our infrastructure, whether they’re training their own models, whether they’re operating an open-source model they have, or whether they’re making API calls into one of the huge frontier models that we’ve built with OpenAI.