Artificial intelligence (AI) stocks are driving the market. S&P500 It has made incredible profits in recent years. Investors are rushing to get into the major companies driving this revolution, as well as lesser-known companies that could be future winners. The reason for this excitement is simple. Even in its early stages, AI has shown that it can deliver efficiencies and make companies more innovative. And all of this can lead to significant revenue increases for technology developers and users.
This is a fast-moving field, but that doesn’t necessarily mean all AI stocks are dangerous or need to be watched like boiling water on a stove. In fact, one AI company in particular offers a package that cautious investors like: long profitability from multiple businesses and a strong position in AI. And that’s why this AI stock is the ultimate set-it-and-forget-it buy for long-term investors. Let’s check it out.
Image source: Getty Images.
one of the world’s largest companies
The company I am referring to is involved in many technology areas and is one of the largest companies in the world. At the same time, it was an early entrant into AI and emerged as one of the major players in the field. This stock is worth buying and holding for the long term. microsoft (MSFT 1.45%).
Most of us are familiar with Microsoft. Because Microsoft is the owner of what we use every day: Microsoft 365, which includes famous products like Word and Excel. Microsoft sells these packages to individuals and businesses, but the company’s products go far beyond this software and app suite.
Microsoft also generates revenue from its ownership interests in professional networking platform LinkedIn, gaming brand Xbox, and cloud businesses. All of this has contributed to the company’s long-term revenue growth. This track record gives Microsoft investors some peace of mind that they can expect returns and growth from the tech giant.
MSFT Earnings (Annual) Data by YCharts
Meanwhile, the company has also become a central player in the AI boom. Microsoft has invested about $13 billion in OpenAI to date, and through this partnership gained access to the AI Institute’s models and became the company’s primary cloud provider.
In addition to this, Microsoft’s cloud business has seen tremendous growth by providing AI products and services to its customers. For example, in the most recent quarter, annual revenue for AI businesses exceeded $37 billion, an increase of 123%. Additionally, quarterly revenue for the cloud business as a whole increased 29% to $54 billion. Chip companies such as Microsoft and other cloud providers and leaders Nvidiaall companies are communicating the same message these days. Computing demands for AI workloads continue to skyrocket.
Today’s changes
(-1.45%) $-6.13
current price
$417.41
Key data points
Market capitalization
$3.1 trillion
daily range
$416.50 – $432.68
52 week range
$356.28 – $555.45
volume
1.7M
average volume
34M
gross profit
68.31%
dividend yield
0.63%
What is weighing on stock prices recently?
But some investors have avoided Microsoft in recent months, concerned that AI will replace Microsoft’s software in the coming years. This has weighed on the stock, which has fallen 12% this year. I don’t see AI as a threat because enterprise customers have deeply integrated Microsoft’s software into their systems. Enterprise customers are unlikely to dismantle these systems in favor of AI tools. Rather, growth in AI could be an opportunity, as Microsoft integrates AI tools into its software to make it increasingly powerful.
And as the AI boom moves into an era of AI agents, software that solves problems and completes tasks, Microsoft could emerge as a big winner. Tech industry giants are building cloud infrastructure to support this technology and are also building agent systems.
Meanwhile, Microsoft stock currently trades at 25 times forward earnings, down from more than 35 times forward earnings about a year ago. This is an excellent acquisition opportunity for a company that offers established growth drivers and leadership in the AI hotspot. That’s why it’s the ultimate AI stock to buy now, as it’s a set-it-and-forget-it option.
