From Nasdaq:

The Nasdaq Composite surged 43% in 2023, driven by booming demand for artificial intelligence (AI) technology. The IDC projects spending on AI software to reach $251 billion annually by 2027. Microsoft and Google parent Alphabet are both seeing success in AI, with Microsoft expecting AI to eventually bring in $10 billion in annual revenue.

Microsoft has introduced new AI services for businesses and consumers, which could attract more customers and solidify its dominant market share in the PC market. The company expects AI to give it more ways to monetize its software, and its Azure enterprise cloud service business grew revenue by 29% year over year in the last quarter.

Alphabet’s investments in AI will make it a major influencer in how people engage with this technology in the future. While it may not directly monetize certain AI features to generate more revenue, it has introduced a conversational search engine powered by generative AI and is expecting double-digit revenue growth in 2024.

Analysts project more double-digit growth for Alphabet compared to Microsoft, with expectations for earnings to grow by 20% per year over the next five years. Additionally, shares of Alphabet can be bought at a lower forward P/E compared to Microsoft, making it the better buy at the moment.



Read more: Better Artificial Intelligence (AI) Stock: Microsoft vs Alphabet