Remember when Microsoft (NASDAQ:MSFT) a company that made crash-prone personal computer operating systems? Those days are long gone, and it since has reinvented itself as an artificial intelligence technology company. Microsoft stock is appropriate for a small-to-medium-size allocation in many portfolios.
The choice is yours to make, of course. Yet, it’s difficult to imagine a complete U.S.-stock portfolio in the 2020s with no Microsoft exposure at all. At the end of the day, you’ll certainly want to conduct your full due diligence on the ultimate blue-chip technology firm, Microsoft.
Why Stay Invested in Microsoft in H2 2024?
Microsoft stock rallied approximately 19.5% in the first half 2024. After that impressive performance, it may be tempting to take profits and/or just avoid the stock for the rest of the year.
Furthermore, Microsoft’s GAAP trailing 12-month price-to-earnings ratio of 40.4x might make some value-conscious investors uncomfortable. For reference, the sector median P/E ratio is 30x to 31x.
At the same time, Microsoft’s AI strategy is so successful that a higher valuation multiple may be entirely justified. Remember, Microsoft made the brilliant move of investing in OpenAI’s ChatGPT generative AI technology a while ago.
Moreover, Microsoft is making good use of AI, applying it to a range of use cases, from health care to business skill-set development. With that in mind, let’s explore two excellent example of how Microsoft is making the most of AI technology.
Microsoft Goes International With AI
There’s no telling where Microsoft will deploy AI next. For example, in the United Arab Emirates, Microsoft is helping private-sector bank RAKBANK transform its operations with AI.
Microsoft will deploy AI tech to assist RAKBANK in the areas of compliance, anti-money laundering, fraud detection and combating the financing of terrorism. Moreover, RAKBANK will be better equipped to handle customer interactions, customer fulfillment and marketing initiatives.
In addition, Microsoft recently introduced its first AI-powered Copilot+ PCs in Singapore. These aren’t desktop computers; rather, they’re Surface Pro 11th Edition and Surface Laptop 7th Edition laptops.
Enhanced with the Copilot+ online assistant, these laptop models feature long battery life and standard-setting AI functionalities.
Microsoft Stock Adds AI Power to Your Portfolio
Now, it’s obvious why so many multi-stock funds include Microsoft. The company is an innovative technology juggernaut that’s bringing AI capabilities to businesses around the world.
Sure, it’s fine to take Microsoft’s valuation into consideration and keep your share-position size moderate.
At the same time, there’s no need to miss out on Microsoft’s AI-powered future growth. In the final analysis, Microsoft stock remains a worthy pick for a broad variety of investment portfolios and strategies.
On the date of publication, Louis Navellier had a long position in MSFT. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
On the date of publication, the responsible editor did not have (either directly or indirectly) and positions in the securities mentioned in this article.
