We recently compiled a list of the 30 AI News Investors Should Not Miss. In this article, we are going to take a look at where Microsoft Corporation (NASDAQ:MSFT) stands against the other AI stocks.
Artificial intelligence (AI) data centers are one of the hottest topics on Wall Street as companies across the industrial spectrum compete in a race to deploy AI technologies in their operations. The latest update comes from data center company Equinix, which recently announced that it would be forming a joint venture with GIC, a Singapore-based sovereign wealth fund, and Canada Pension Plan Investment Board, to raise more than $15 billion in capital. Per the data center company, the capital would be used to expand the US footprint of hyperscale data centers. Hyperscale data centers are the largest in the industry, typically developed by technology giants based in the US, and offer massive networking capacity and often consume as much power as a big city or even a small country.
Read more about these developments by accessing 33 Most Important AI Companies You Should Pay Attention To and 20 Industrial Stocks Already Riding the AI Wave.
As technology stocks stage a comeback on the back of Fed rate cuts and AI optimism, the news coming from the commerce department in the US has buoyed investors further. The US government said earlier this week that it plans to award nearly $100 million to boost the use of artificial intelligence in developing new sustainable semiconductor materials. The funding is part of the more than $52 billion in US chip manufacturing and research grants promised by US President Joe Biden. The latest funding would go towards helping universities, national laboratories, and the private sector develop AI-powered autonomous experimentation for sustainable semiconductor manufacturing. The goal is to reduce time needed to develop new semiconductor materials that are less resource-intensive.
Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and Beyond the Tech Giants: 35 Non-Tech AI Opportunities.
Our Methodology
For this article, we selected AI stocks by combing through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A development team working together to create the next version of Windows.
Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ:MSFT) is a Washington-based technology company. The tech giant has ramped up investments in AI over the past few years as it aims to get ahead of competitors in the emerging space. As part of this effort, it has invested nearly $13 billion in OpenAI of ChatGPT fame. Following the latest funding round, where OpenAI raised $6.6 billion in new funding, the startup is now valued at more than $157 billion, making it the highest valued private company in the US, overtaking SpaceX by Elon Musk. The latter is valued at around $125 billion. The only other private firm that rivals OpenAI globally is ByteDance, the Chinese parent of the popular social media app TikTok, that is valued at around $220 billion.
Overall MSFT ranks 2nd on our list of the AI stocks investors should not miss. While we acknowledge the potential of MSFT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than MSFT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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