5 Most Promising AI Stocks

1. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 259

Microsoft Corporation (NASDAQ:MSFT) is a no-brainer AI stock at this point, given the company’s rapid implementation of AI plans and its long-term vision for integrating AI in its key products like search, productivity and enterprise apps.

Recently, Morgan Stanley analyst Keith Weiss said that Microsoft Corporation (NASDAQ:MSFT) is “best positioned to gain market share” among major tech companies that are pushing into AI and Cloud. The analyst has a $307 price target on Microsoft Corporation (NASDAQ:MSFT).

Hedge funds agree with the market sentiment. As of the end of the fourth quarter of 2022, Microsoft Corporation (NASDAQ:MSFT) was the most popular stock among the 943 hedge funds tracked by Insider Monkey. Microsoft Corporation (NASDAQ:MSFT) beats giants like Alphabet, Apple and Meta Platforms when it comes to hedge fund sentiment.

Polen Global Growth Strategy made the following comment about Microsoft Corporation (NASDAQ:MSFT) in its Q1 2023 investor letter:

“Microsoft Corporation (NASDAQ:MSFT)’s fundamentals have largely stayed intact despite the headwinds many technology companies are facing due to the macroeconomic environment. While growth has decelerated below our longer-term target (we expect low-double-digit revenue growth over the next 3-5 years), we believe the deceleration should prove to be ephemeral. Azure and Office Commercial remain bright spots, while Windows OEM has been and will continue to be a drag over the next few quarters. With respect to Azure, even at a decelerated rate, the business continues to grow well. After eight consecutive quarters of Azure’s top line growth being in the mid-to-high-40s range, over the last two quarters, growth has been 42% and 38%, respectively. Microsoft is a scaled business with multiple and interlocking competitive advantages, and we believe the company will compound at high rates for a long period of time.”

You can also take a peek at 10 Most Profitable Small Businesses in 2023 and 10 Best April Dividend Stocks To Buy.