11 Trending AI Stocks on Latest News and Ratings

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1. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 279

Microsoft Corporation (NASDAQ:MSFT) incorporates AI across its cloud services, productivity tools, and business solutions to improve automation, security, and user experience. Its AI initiatives include advanced cloud offerings, AI-driven business applications, and innovative language processing and computing technologies.

Reuters reported on December 23 that Microsoft (NASDAQ:MSFT) is integrating internal and third-party AI models into Microsoft 365 Copilot to reduce reliance on OpenAI’s technology and lower operational costs, sources revealed. While OpenAI remains a key partner, Microsoft is customizing OpenAI’s models and training its own smaller models, such as Phi-4, to improve cost efficiency and performance. This approach aligns with similar shifts in other Microsoft services like GitHub and its consumer chatbot Copilot. Though adoption has faced challenges, analysts predict over 10 million paid users by year-end, with 70% of Fortune 500 companies already utilizing 365 Copilot.

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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