We recently published a list of 10 AI Stocks Taking Wall Street by Storm. In this article, we are going to take a look at where Microsoft Corporation (NASDAQ:MSFT) stands against other AI stocks taking Wall Street by storm.
The race to gain a competitive edge in the generative artificial intelligence industry fiercely continues, and Anthropic is the latest one making a move. On Monday, the artificial intelligence startup announced the launch of its advanced AI model, Claude 3.7 Sonnet, stating that it is its “most intelligent” version yet. This model can produce faster responses or display its step-by-step reasoning process, as reported by Reuters.
READ NOW: 10 Buzzing AI Stocks Dominating Headlines and 10 AI Stocks Surging on News and Analyst Calls
Anthropic’s hybrid model combines multiple reasoning approaches to solve complex problems more effectively. It was launched amid fierce competition in the world of AI. According to the company, the Claude 3.7 Sonnet model is its most advanced version and will be available on all Claude plans, including Free, Pro, Team, and Enterprise. However, it noted that the “extended thinking mode” feature is only available on paid plans.
“This model has all the capabilities wrapped together — we want one coherent AI that can help with everything. There’s an advantage in simplicity for our customers.”
-Anthropic co-founder and science chief Jared Kaplan told CNBC in an interview.
Kaplan further stated that the “hybrid” model, going live immediately, operates like a human brain. While some questions require quick responses, many others require critical thinking, which is why the company is looking to integrate both. Elaborating on the extended thinking mode, the company said that it is a model that “self-reflects before answering,” thereby improving its performance in math, physics, instruction-following, coding, and many other tasks. Notably, the company said that this model has been specifically designed to focus on “real-world” tasks instead of math and computer science problems. This is so that it can reflect how businesses use large-language models.
According to analysts, Anthropic’s move can grant it an edge against OpenAI and other tech companies investing in AI technologies.
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds. The hedge fund data is as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A development team working together to create the next version of Windows.
Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 317
Microsoft Corporation (NASDAQ:MSFT) provides AI-powered cloud, productivity, and business solutions, focusing on efficiency, security, and AI advancements. On February 21, analysts from leading investment bank TD Cowen reported in a research note that Microsoft Corporation (NASDAQ:MSFT) has canceled some leases for US data center capacity.
While the move may imply a shift in the company’s AI strategy, it also raises concerns about whether it’s securing more AI computing capacity than it needs in the long term. TD Cowen analysts led by Michael Elias cited channel checks, i.e. inquiries with supply channel providers, to reveal how the company has voided leases in the US totaling “a couple of hundred megawatts” of capacity.
This is the equivalent of roughly two data centers — canceling agreements with at least a couple of private operators. The firm also reported that channel checks further suggest how Microsoft has pulled back on converting so-called statements of qualifications. These are agreements that usually lead to formal leases. Nevertheless, a company spokesperson has revealed that the company’s plans of investing over $80 billion in AI and cloud capacity this fiscal year remain on track.
“While we may strategically pace or adjust our infrastructure in some areas, we will continue to grow strongly in all regions”.
-Microsoft spokesperson.
Overall, MSFT ranks 1st on our list of AI stocks taking Wall Street by storm. 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 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: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.
