Important points
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Microsoft partners with AI leaders to deliver in-demand AI services through the cloud.
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Meta Platforms’ business is improving thanks to AI and preparing for the next wave of breakthroughs.
Artificial intelligence (AI) is taking over Wall Street. Significant advances in technology have brought leading companies into the spotlight and enabled them to achieve superior financial results.
And the good news is that it’s never too late to monetize this. AI should continue to be a significant tailwind over the next decade and beyond, and picking the right stocks can yield superior returns.
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With this as a backdrop, let’s consider two attractive AI stocks that could outperform other stocks by 2035. microsoft(NASDAQ: MSFT) and meta platform(NASDAQ:Meta).
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1.Microsoft
Microsoft is one of the best companies in the AI space for at least two reasons. First, the company had the foresight years ago to partner with OpenAI, arguably the leader in generative AI. The move was clearly advantageous for Microsoft, which currently holds a 27% share of OpenAI.
The company also holds intellectual property rights to use models from OpenAI, which remains part of the market leader, until 2032. And OpenAI has committed to buying $250 billion in services from Azure, Microsoft’s cloud computing division.
This brings us to the second reason why Microsoft is one of the most attractive AI stocks. The company has established itself as a leader in cloud computing and is not far behind. Amazon.
This business is booming for Microsoft, and things have gotten even better in recent years thanks to the growing list of AI services Microsoft offers, including access to OpenAI’s market-leading models.
The company also benefits from a long-standing partnership with the company that has provided the Microsoft Office suite for decades. The company’s product and brand trust has a level of familiarity that is difficult to imitate. These competitive advantages are one of the reasons Microsoft continues to make great strides in cloud computing.
How will things change for the company over the next 10 years?Many believe that cloud adoption and AI growth are still in their infancy, so the company should continue to take advantage of these fast-growing markets.
In addition to its brand name and deep corporate relationships, the company benefits from high switching costs within the Azure segment. This will ensure better performance in the long run.
Finally, Microsoft is a great dividend stock that has increased its dividend by nearly 153% over the past 10 years. This is a great option for AI investors as well as those looking for growth and income.
2. Metaplatform
Metaplatforms’ stock price fell after the company announced its third quarter results. Investors were concerned about lower-than-expected net income and the company’s decision to increase capital expenditures (capex). However, in my opinion, neither of these issues is a reason to sell the stock.
The disappointing net income was due to tax charges incurred as a result of new US legislation, and the additional capital investment may actually be a good thing, as Metaplatform could be in a greater position to benefit from breakthroughs in AI.
This is one reason it’s a great AI stock. Furthermore, management is not just waiting for future breakthroughs. The company is already benefiting from its efforts on the ground, thanks to AI algorithms that drive engagement across its website and apps.
Meta makes most of its revenue from advertising. The company now finds that demand for advertising on its platform may increase as it attracts more users, spends more time on its apps, or both.
The number of monthly active users in the third quarter increased 8% year-on-year to 3.54 billion. Over the period, time spent on Facebook increased by 5%. On the other hand, ad conversions have also improved thanks to AI. As a result, third-quarter revenue increased 26% year over year to $51.2 billion.
Despite Meta’s recent sell-off, the company’s AI efforts should continue to have a significant impact on its overall business, driving revenue and profits, making it an attractive opportunity for investors looking to capitalize on this fast-growing sector.
Should you invest $1,000 in Microsoft right now?
Before buying Microsoft stock, consider the following:
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Prosper Junior Bakiny holds positions at Amazon and Meta Platforms. The Motley Fool has positions in and recommends Amazon, Meta Platform, and Microsoft. The Motley Fool recommends the following options: A long January 2026 $395 call on Microsoft and a short January 2026 $405 call on Microsoft. The Motley Fool has a disclosure policy.
