Key Points Hint: It's not a pure-play AI business. In fact, it's a large company active in a host of tech segments. 10 stocks we like better than Microsoft › Although it's a giant of long standing in the tech industry, Microsoft (NASDAQ: MSFT) is typically not a company that leaps to mind when the conversation turns to artificial intelligence (AI). Unlike pure-play AI developers, Microsoft operates a sprawling business involving traditional software, cloud services, and even hardware. But underneat ...

Is Microsoft’s relationship with its longtime artificial intelligence (AI) partner taking a turn?By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions .Complete the form to unlock this article and enjoy unlimited free access to all PYMNTS content — no additional logins required.As CNBC reported Wednesday (Sept. 24), the tech giant has for years s ...

Core Viewpoint - The recent decline in the stock market, driven by fears of a global trade war, presents a potential buying opportunity for high-quality stocks like Microsoft, which is positioned well in the AI sector [1][2]. Group 1: Microsoft Stock Performance - Microsoft stock has decreased by 18% amid broader market sell-offs, but upcoming financial results on April 30 could provide insights into its AI advancements and potentially catalyze a stock recovery [3][12]. - The current price-to-earnings (P/E) ratio of Microsoft is 29.6, representing an 11% discount compared to its five-year average of 33.2, making it an attractive buy [12][14]. Group 2: AI Developments and Revenue Potential - Microsoft has invested approximately $14 billion in OpenAI since 2016, leading to the development of its AI virtual assistant, Copilot, which is integrated into various software products [3][4]. - Copilot is available as a paid add-on for Microsoft 365, with potential to generate significant recurring revenue, estimated at around $30 per license per month for over 400 million licenses [4][5]. - Demand for Copilot has surged, with usage increasing by 60% in the second quarter compared to the first quarter, and customers who adopted it early expanded their licenses tenfold [5][6]. Group 3: Azure Cloud Platform - The Azure cloud platform is central to Microsoft's AI strategy, providing businesses with access to advanced computing resources and large language models [7][8]. - Azure AI revenue grew by 157% year-over-year in the second quarter, contributing significantly to Azure's overall revenue growth of 31% [9]. - Microsoft plans to invest over $80 billion in AI data center infrastructure and chips during fiscal 2025, although potential trade disruptions could impact these expenditures [10][11]. Group 4: Long-term Outlook and Economic Resilience - AI is projected to add $15.7 trillion to the global economy by 2030, positioning Microsoft as a leader in this growth area [15]. - Microsoft may be less affected by trade tensions compared to other companies, as its primary offerings are software and digital services, which are less susceptible to tariffs [16].