10 AI News That Broke the Internet

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1. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 279

Microsoft Corporation (NASDAQ:MSFT) integrates AI into its software, cloud services, and productivity tools, enhancing business applications, cloud computing, and automation. Its AI solutions support a wide range of industries, from enterprise services to personal computing and gaming.

UBS increased Microsoft’s (MSFT) price target to $525 from $500, maintaining a Buy rating. The firm expects Azure growth to be more back-end loaded as new capacity comes online in the second half. Despite concerns over the CEO’s “AI winter” comment, UBS views Microsoft as a top-tier provider with no signs of over-build among smaller GPU cloud players. Analyst Karl Kierstead noted:

“While the CEO’s ‘AI winter’ comment is unsettling, we’re comfortable that Microsoft is at the highest quality end of the customer/workload spectrum, and we’re not seeing any clear evidence of over-build among the smaller GPU cloud providers.”

While sentiment around Microsoft is improving, it remains mixed due to uncertainties about Azure’s capacity timelines, elevated capital expenditures, and the future of its relationship with OpenAI.

While we acknowledge the potential of Microsoft Corporation (NASDAQ:MSFT) as an investment, our conviction lies in the belief that 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.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock

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