Microsoft is heavily investing in AI, but uncertainty remains on revenue growth

From Nasdaq: 2024-10-17 04:15:00

Tech companies are eyeing massive growth in the AI market, which could be worth over $1.8 trillion by 2030, with a 36.6% compound annual growth rate. OpenAI, maker of ChatGPT, faces $5 billion in losses despite $3.7 billion in revenue, showing the challenges of profitability in AI.

Microsoft (NASDAQ: MSFT) is heavily investing in AI, boosting products and services with AI capabilities, but whether this will translate into significant revenue growth remains uncertain. High capital expenditures signal increased spending on assets for long-term growth, but it’s unclear if this will lead to a faster revenue increase for Microsoft.

Salesforce CEO criticizes Microsoft’s Copilot AI, highlighting concerns about its value for business users. Microsoft’s stock is up 12% this year, but with a high valuation, investors question the impact of AI on future growth. While Microsoft boasts strong products like Windows, challenges with AI could affect its stock performance.

Investors considering Microsoft should note that the Motley Fool’s Stock Advisor team did not recommend the stock among the top 10, suggesting other opportunities for greater returns. While Microsoft has potential for long-term growth, uncertainties around AI performance could impact its stock value over time.



Read more at Nasdaq: Microsoft Is Spending Big on Artificial Intelligence, but Will It Pay Off?