Wall Street is particularly bullish microsoft (MSFT -1.23%) The company has taken the lead in artificial intelligence (AI) and impressed investors as it moved closer to closing a historic deal to buy a video game company. activision blizzard.
The tech giant has a long history of consistent long-term growth, as evidenced by its status as the second most valuable company in the world by market capitalization.
Microsoft’s dominance in software has paved the way for expansion into multiple high-growth industries, including cloud computing, video games, AI, productivity software, and more.
In the nearly 50 years since its inception, the company has outperformed other companies. However, the innovative nature of its business suggests there is plenty of room for further expansion.
Here’s why it’s never too late to buy Microsoft stock.
Further growth in a $385 billion industry
On January 18, 2022, Microsoft announced its intention to acquire the world’s largest video game developer, creator of the popular series. call of duty, Activision Blizzard. Windows has disclosed a purchase price of $95 per share, or $69 billion. The partnership would make Microsoft the next-third largest video game company. Tencent and Sony.
Considering that the video game market is expected to reach $385 billion this year and expand at an 8% compound annual growth rate (CAGR), the acquisition could be lucrative for Microsoft.
The transaction is pending regulatory hearings around the world and has not yet completed. But despite more than a year of uncertainty about whether the acquisition will succeed, there appears to be a light at the end of the tunnel. Of the world’s three largest regulators, the EU and the US have approved the deal. Meanwhile, Microsoft and Activision are currently restructuring deals to appease UK regulators, and the deal could be completed in weeks or even days.
Microsoft’s Xbox has become one of the world’s most recognizable gaming brands and has revolutionized the way consumers buy new titles with its subscription service, Xbox Game Pass. Activision could attract more gamers to Microsoft’s consoles and services, increasing revenue in the long run.
Great advantage in the artificial intelligence market
Artificial intelligence has been a hot topic this year, and the market is expected to grow at a CAGR of 37% through 2030. As a result, Microsoft’s $1 billion investment in his ChatGPT developer OpenAI in 2019 appears to be a forward-thinking move in artificial intelligence. 10 years. This partnership gives Microsoft a significant head start in this space, allowing it to procure exclusive licenses for powerful AI models.
Microsoft has so far used its market dominance to introduce AI upgrades across its product lineup. Office programs like Excel and Word offer AI capabilities, and their search engine, Bing, has features like ChatGPT. Microsoft’s cloud platform, Azure, is also rapidly expanding its AI service catalog and offers full access to ChatGPT.
With products like Windows, Office, and Microsoft 365, the company has played a key role in the success of countless businesses around the world. Many companies have come to rely on Microsoft products, making it more likely that the company will become the go-to for anyone looking for AI services. The company’s OpenAI model and brand recognition could propel the company to the top of the market with significant revenue growth potential in the long term.
Microsoft shares have risen 229% over the past five years. Meanwhile, sales in the same period he increased by 58% and operating profit he increased by 94%. Financial figures are impressive compared to the most valuable companies, appleAs you can see in the table below, Microsoft outperforms on both fronts.
Data from YCharts
Microsoft may enjoy a top spot in the tech industry, but its consistent growth over the past five years and recent developments in AI and gaming show it’s far from over. It’s never too late to profit from the long-term potential of Microsoft stock.
Dani Cook has no positions in any of the stocks mentioned. The Motley Fool has positions in and endorses Activision Blizzard, Apple, Microsoft and Tencent. The Motley Fool has a disclosure policy.
