Since the 2020 pandemic, economic and geopolitical uncertainty have spurred U.S. stock market volatility. The stock market still creates money for long-term investors. Despite market fluctuations, a $10,000 S&P 500 investment at the start of 2020 would have grown to $14,566.80 by 2023 (assuming dividend reinvestment).
Due to its impact on life, work, school, and pleasure, AI is the next investment trend. AI is not a fleeting trend; it is now influencing global company operations and growth.
Thus, investors should invest in high-quality AI stocks for long-term gains. Why Microsoft (NASDAQ: MSFT) and Meta Platforms (NASDAQ: META) qualify.
1. MS Windows and Office were Microsoft's mainstays for years. Due to its longstanding cooperation with ChatGPT inventor OpenAI, the company is now known for its generative AI expertise as well as its software domination.
Microsoft Azure, the second-largest cloud infrastructure player, continues to benefit from enterprise AI spending. Increasing AI service adoption drove 6% of Azure's 30% revenue growth.
Azure provides AI model training and inference performance using a variety of AI chips from Advanced Micro Devices, Nvidia, and Azure Maia. Azure OpenAI Service lets clients choose from proprietary and open-source core models that are deeply integrated with Azure.
As expected, almost half of Fortune 500 firms use Azure OpenAI Service. Azure AI had 53,000 clients in the second quarter fiscal 2024 (ending Dec. 31, 2023), including AI-first startups and large organizations. Microsoft's focus on industrial clouds and cross-industry clouds to adapt Azure solutions to many industries is also driving adoption.
Microsoft's AI helper Copilot is also growing. Generative AI increased task productivity by 70%, according to the company. Copilot is in Microsoft 365, GitHub, Dynamics 365, and security products. Copilot integrates smoothly with Salesforce, ServiceNow, and Zendesk. This lets enterprises use its AI-powered capabilities without disrupting workflows.
All these AI capabilities could generate big income for Microsoft. Ending the second quarter with $81 billion in cash, the corporation is financially stable. Microsoft's ongoing growth potential suggests that long-term investors should buy at least a tiny share in this AI stock.
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