Close Menu
Fund Focus News
    Facebook X (Twitter) Instagram
    Trending
    • Mutual Fund Return vs Inflation: How large inflation-adjusted corpus 25-year-old may generate on Rs 10 lakh investment by 60 years of age
    • SEC Commissioner Pushes Back on Crypto ETFs as XRP ETF Approval Odds Sink
    • Can I give £50,000 in Premium Bonds to my four grandkids to pass on money tax free?
    • Which Is the Better Buy?
    • Ethereum Price Forecast: Treasury companies are ‘better buys’ than ETH ETFs
    • How to understand a property’s real value
    • Two New ETFs Let You Trade Like A Washington Insider – Forbes Advisor
    • Active management questioned as report reveals few funds outperformed passive options
    Facebook X (Twitter) Instagram
    Fund Focus News
    • Home
    • Bonds
    • ETFs
    • Funds
    • Investments
    • Mutual Funds
    • Property Investments
    • SIP
    Fund Focus News
    Home»Investments»A Once-in-a-Generation Investment Opportunity: 1 Spectacular Artificial Intelligence (AI) Stock to Buy Now and Hold Forever
    Investments

    A Once-in-a-Generation Investment Opportunity: 1 Spectacular Artificial Intelligence (AI) Stock to Buy Now and Hold Forever

    July 27, 2024


    Microsoft’s next chapter will revolve around AI.

    The technology sector has been one of the best-performing industries so far in 2024 thanks in large part to booming demand in artificial intelligence (AI).

    Unsurprisingly, it seems like every tech company is trying to brand itself as an AI opportunity right now. However, one company that is emerging as a legitimate frontrunner in the AI marathon is Microsoft (MSFT 1.64%).

    Let’s dig into how Microsoft is making a splash in the AI realm, and explore why now is a great time for long-term investors to scoop up shares.

    How is Microsoft disrupting AI?

    In November 2022, the technology industry witnessed a seismic shift as the world was introduced to ChatGPT. It did not take long for ChatGPT to become large-scale. By January 2023, media reports were circulating that ChatGPT had over 100 million users on the platform.

    Considering its widespread popularity and the sophistication of its large language model technology, it’s no coincidence that Microsoft invested $10 billion into ChatGPT’s parent company, OpenAI, in January 2023.

    Over the last year and a half, Microsoft has integrated ChatGPT across its entire ecosystem. While it’s still in the early days, the initial financial results since its investment in ChatGPT have been quite impressive.

    A person using an AI chatbot

    Image source: Getty Images.

    Are the investments paying off?

    One of the biggest growth opportunities for AI in general is cloud computing. According to Statista, Microsoft currently owns 25% of the global cloud infrastructure market — second only to Amazon. Back in April, Microsoft reported financial results for its third quarter of fiscal 2024. For the period ended March 31, Microsoft generated $26.7 billion in its Intelligent Cloud unit — an increase of 21% year over year.

    Within the Intelligent Cloud segment, revenue from Microsoft’s Azure cloud services grew by 31% year over year. Considering the level of competition among cloud infrastructure providers, I’m encouraged by Azure’s growth rate. Moreover, after listening to management’s commentary during the call, investors have reason to believe that much more growth could be on the horizon.

    One of the biggest new products Microsoft has released since integrating ChatGPT into the business is a virtual assistant called CoPilot. According to management, roughly 60% of the Fortune 500 use CoPilot.

    A premium valuation well worth the price

    The chart below shows that Microsoft’s current price-to-earnings (P/E) ratio and price-to-free-cash-flow (P/FCF) levels are well above their 10-year averages.

    MSFT PE Ratio Chart

    MSFT PE Ratio data by YCharts

    Although these valuation levels might suggest Microsoft stock is a bit pricey, I’d encourage investors to zoom out and think about the bigger picture.

    In less than two years, Microsoft has swiftly implemented a brand new AI application across its ecosystem. In doing so, the company has continued to further accelerate its cloud business while heavily penetrating the world’s largest businesses with its new CoPilot assistant.

    Investors who are looking for exposure to AI should consider a position in Microsoft. The company’s ecosystem spans many different end markets, including cloud infrastructure, personal computing, workplace productivity, gaming, social networking, and more. All of these areas have the potential to be completely revolutionized by AI.

    To me, AI represents an interesting new chapter in Microsoft’s evolution.

    The secular tailwinds fueling the broader AI landscape suggest that the technology is here to stay one way or another. Considering Microsoft has been a dominant force across many areas of the technology spectrum for nearly 50 years, I’m convinced that its investments in ChatGPT will ensure it will be well positioned in the AI realm for years to come.

    I think Microsoft is a rare breed in that investors can own the stock forever and benefit from the company’s steadfast commitment to innovation and growth. For these reasons, I think investors are best off investing in Microsoft over a long term time horizon and holding onto the stock.

    John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Adam Spatacco has positions in Amazon and Microsoft. The Motley Fool has positions in and recommends Amazon and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.



    Source link

    Share. Facebook Twitter Pinterest LinkedIn Tumblr Telegram Email

    Related Posts

    Israel climbs to top 8 in Europe for investments in the UK

    August 6, 2025

    Kazakh Investments in Kyrgyz Republic Triple

    August 6, 2025

    Foreign investments in Nigeria’s telecom sector decline by 58% in Q1 2025  

    August 6, 2025
    Leave A Reply Cancel Reply

    Top Posts

    Mutual Fund Return vs Inflation: How large inflation-adjusted corpus 25-year-old may generate on Rs 10 lakh investment by 60 years of age

    August 7, 2025

    Qu’est-ce qu’un green bond ?

    December 7, 2017

    les cat’ bonds deviennent incontournables

    September 5, 2018

    ETF : définition et intérêt des trackers

    May 15, 2019
    Don't Miss
    Mutual Funds

    Mutual Fund Return vs Inflation: How large inflation-adjusted corpus 25-year-old may generate on Rs 10 lakh investment by 60 years of age

    August 7, 2025

    Mutual Fund Return vs Inflation: A 1 lakh lump sum investment at a 12 per cent…

    SEC Commissioner Pushes Back on Crypto ETFs as XRP ETF Approval Odds Sink

    August 6, 2025

    Can I give £50,000 in Premium Bonds to my four grandkids to pass on money tax free?

    August 6, 2025

    Which Is the Better Buy?

    August 6, 2025
    Stay In Touch
    • Facebook
    • Twitter
    • Pinterest
    • Instagram
    • YouTube
    • Vimeo
    EDITOR'S PICK

    Council Approves Generational Public Investments in East Portland and Central City

    October 30, 2024

    Investors embrace bond funds before rates start to fall

    July 29, 2024

    Eat, Sip, Shop: Single mother bringing ‘grand-scale’ bakery and cafe to new Boyd complex | Eat, Sip, Shop

    August 24, 2024
    Our Picks

    Mutual Fund Return vs Inflation: How large inflation-adjusted corpus 25-year-old may generate on Rs 10 lakh investment by 60 years of age

    August 7, 2025

    SEC Commissioner Pushes Back on Crypto ETFs as XRP ETF Approval Odds Sink

    August 6, 2025

    Can I give £50,000 in Premium Bonds to my four grandkids to pass on money tax free?

    August 6, 2025
    Most Popular

    ₹10,000 monthly SIP in this debt mutual fund has grown to over ₹70 lakh in 23 years

    June 13, 2025

    ₹1 lakh investment in these 2 ELSS mutual funds at launch would have grown to over ₹5 lakh. Check details

    April 25, 2025

    ZIG, BUZZ, NANC, and KRUZ

    October 11, 2024
    © 2025 Fund Focus News
    • Get In Touch
    • Privacy Policy
    • Terms and Conditions

    Type above and press Enter to search. Press Esc to cancel.