We just covered the 10 Best AI Stock Picks of Motley Fool Asset Management. Microsoft Corp. (NASDAQ:MSFT) ranks #4 (see the 5 Best AI Stock Picks of Motley Fool Asset Management).
Microsoft Corp. (NASDAQ:MSFT) shares are down 10% so far this year amid concerns that AI tools like Claude Cowork could crush the company’s products. The company’s CEO Satya Nadella has reportedly issued a code red at the company to spur growth for Copilot. BNP Paribas recently said these efforts, including Agent Mode, Copilot Cowork, Critique, Council, and Agent 365, could improve the product. The firm said in its note that it believes Microsoft Corp. (NASDAQ:MSFT) can still beat consensus Azure expectations over the coming quarters, even if 50% of new capacity is allocated internally. See more details of BNP’s call here.
Microsoft Corp. (NASDAQ:MSFT) bulls believe the company is protected from the AI threats to SaaS business models. They think the company can shift from a per-seat pricing model to a per-workload model, while its huge base of 450 million commercial users gives it an ecosystem to thrive upon. Over 3.7 million businesses rely on its software, while nearly 486,000 organizations run on Azure, including 85% of the Fortune 500.
Microsoft Corp. (NASDAQ:MSFT) is also foraying into the chip segment to cut its reliance on outsiders. Its Maia 200 AI accelerator chip is designed to run large-scale AI workloads inside Microsoft data centers, while the Cobalt 200 CPU is aimed at improving general cloud computing efficiency on Azure. Together, these custom chips reduce dependence on external suppliers and improve long-term cost control, performance, and scalability.
Mar Vista U.S. Quality Strategy stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q1 2026 investor letter:
“Microsoft remains a top portfolio holding, supported by its financial strength, diversified revenue streams, and broad customer base, all of which provide resilience. The company is experiencing …” (Click Here To Read The Letter in Detail)
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While we acknowledge the risk and 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 and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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