The Gates Foundation, with a substantial holding of Microsoft shares, identifies Microsoft as a top AI stock with strong recent performance. Bill Gates’ foundation has over $10 billion invested in Microsoft, which offers a variety of AI models on its Azure platform. However, Microsoft’s stock may be overpriced compared to its growth, with a high P/E ratio of nearly 40 times trailing earnings.

While Microsoft’s Azure division shows strong growth, the overall company’s revenue growth rate is slower than some of its peers like Meta Platforms. Microsoft’s stock trades at a premium valuation, prompting investors to consider cheaper options with better growth numbers. The Motley Fool’s Stock Advisor team does not currently recommend Microsoft as one of the top 10 stocks to buy now, citing potential for higher returns in other investments.

Investors should weigh Microsoft’s expensive valuation against its growth prospects compared to other big tech stocks. While Microsoft’s Azure platform is a top choice for AI applications, the stock’s current price may not justify its potential for future growth. Consider alternative investments with stronger growth potential and lower valuations for better returns in the long run. The Motley Fool recommends long January 2026 $395 calls and short January 2026 $405 calls on Microsoft. The author’s views do not necessarily reflect those of Nasdaq, Inc. Visit The Motley Fool’s disclosure policy for more information.

Read more at Nasdaq: 1 Super Artificial Intelligence (AI) Stock Billionaire Bill Gates Has 25% of His Foundation’s Portfolio Invested In