Artificial intelligence is transforming the planet. From fast digital image production to conversational interactions to autonomous robotics to fraud detection, and more, AI has enabled things that were impossible a few years ago. The rise of AI has also highlighted businesses like Nvidia, Palantir, and Symbotic, which helped pioneer supercomputing.
Hidden in plain sight is another AI stock worth considering. Software powerhouse Microsoft (NASDAQ: MSFT). It may easily make you rich.
Microsoft is quietly knee-deep in the business. Naturally, you know the company. Microsoft is the world's largest firm by market valuation, and its Windows operating system powers over two-thirds of PCs. Microsoft is also a major participant in personal productivity software due to its PC market dominance. Xbox is a popular gaming device, and the firm is a leader in cloud computing.
Microsoft's 2023 multibillion-dollar investment in ChatGPT parent OpenAI shows its commitment to the AI industry's future. Microsoft has recently merged ChatGPT into Bing and turned it into Copilot, an AI assistant. Copilot can link with Microsoft's Office productivity tools for a monthly fee, making Word and Excel more powerful.
Its Azure cloud platform is an example. Azure can handle various kinds of cloud computing tasks, but one version is designed for AI. This tool can build enterprise-specific AI chat apps or client-specific Copilots. Heineken, Lexmark, and AT&T are paying customers of these solutions.
The IT giant is still funding AI-driven growth efforts. It set aside $2.9 billion this week to enhance its hyperscale cloud computing and AI in Japan. A large portion of this money will teach 3 million people to design and use AI technologies.
AI market growth outlook The AI industry's future is unclear. What Microsoft will accomplish with AI in the future is unclear. Undoubtedly, Microsoft will be ready for practically anything in the future. Certainly, that future is appealing. The AI software market alone will expand 23% year through 2032, reaching $1 trillion, according to Precedence Research.
However, this outlook may underestimate Microsoft's AI capabilities. Precedence forecasts the global virtual assistant market will expand 26% annually over the same time range. Microsoft, the hub of most computers, is almost unfairly positioned to dominate this business's growth. Wedbush Securities analyst Daniel Ives calls Microsoft's Copilot platform launch "We strongly view this as Microsoft's 'iPhone Moment' with AI set to change the cloud growth trajectory in Redmond the next few years."
A thrilling comparison. Since 2007, Apple shares have performed strongly due to the iPhone's popularity, which contributes for half of the company's sales.
A balanced, low-risk AI investment. Definitely not an AI "pure play." Productivity and business software make up about one-third of Microsoft's revenue, while cloud computing makes up more. When combined, Windows, video games, and Bing are virtually as big as those other arms. Some other ventures use AI, but some don't. Connect the dots—AI may take time to boost the software giant's profits.
However, AI may drive most of the company's revenue in a few years. That includes earnings from AI-powered enterprises that aren't advertised as such. Microsoft stock is easier to own while you wait due to its diverse, proven profit areas. Not so with most other popular AI stock picks. More importantly to investors, AI might boost Microsoft's growth, which is hampered by its size. The stock's millionaire-making potential comes from its generally unanticipated increase.
stay turned for development