10 AI Stocks Investors Are Watching Closely Right Now

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1.  Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 279

Microsoft Corporation (NASDAQ:MSFT) provides AI-powered cloud, productivity, and business solutions, focusing on efficiency, security, and AI advancements. On March 7, Stifel reiterated the stock as “Buy” and lowered its price target to $475 per share from $515. According to the firm, it is sticking with the stock after recent meetings with investor relations that have reinstated their belief that the stock will stay range-bound until Azure/Commercial Cloud growth runs consistently ahead of capex increases.

The firm anticipates that Microsoft will add $25 billion to $30 billion in incremental capex for fiscal 2026, which aligns with Azure’s estimated 30% growth rate. The firm is confident in the company’s rapidly emerging genAI cycle, stating that it will sustain double-digit revenue and profitability. However, it does cite increased capex estimates for its lowered price target.

“With most of MSFT’s segments performing well at scale, given investor sentiment and near singular focus on capex intensity the meetings served to reinforce our belief.”

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 time frame. 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: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

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