There’s no denying it. Microsoft’s (NASDAQ:MSFT) investments in generative artificial intelligence technology turned out to be brilliant, forward-looking moves. Whether you choose to add to your position or just keep your current shares, Microsoft stock remains a worthy portfolio holding and earns a confident “B” grade today.
Microsoft remains a leader in the AI market. The company is building an AI-development center in Europe. Furthermore, an analyst compared Microsoft’s current situation to another tech titan’s historic moment. Depending on your position, you can decide if Microsoft stock is a buy, hold, or both.
Microsoft Advances AI in the UK
Here’s a news item that’s bound to capture Wall Street’s attention. Microsoft is reportedly establishing a new AI hub in London. Mustafa Suleyman will lead this hub; he’s a co-founder of AI-tech firm DeepMind, which Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) Google owns.
This AI-development hub, according to Suleyman, will “drive pioneering work to advance state-of-the-art language models and their supporting infrastructure, and to create world-class tooling for foundation models.” If all goes according to plan, the new AI hub will enable Microsoft to tap into the UK’s “extraordinary talent pool and AI ecosystem.”
Undoubtedly, this will entail substantial capital commitment from Microsoft in the short term. However, AI isn’t just a fad; it’s here to stay. To maintain its leadership position, Microsoft needs to find and hire top talent. So, even if it involves a sizable capital outlay, Microsoft’s new AI hub should be well worth the cost.
Is Microsoft Really Having an ‘iPhone Moment’?
It’s fine to be enthusiastic about Microsoft’s AI-related investments, but investors should temper their enthusiasm.
Consider, for example, a declaration made by Wedbush Securities analyst Dan Ives. He’s highly respected, so when Ives makes a statement, people listen.
Not long ago, Ives asserted Microsoft is having its “iPhone moment” with the AI revolution. That’s an extremely bullish statement, as Apple’s (NASDAQ:AAPL) iPhone, the first globally mass-marketed smartphone, altered the course of history.
Maybe, OpenAI’s ChatGPT AI chatbot is also a history-making technology. Microsoft has a has a 49% stake in ChatGPT, so at least it is associated with a game-changing technology phenomenon.
However, there’s no need to over-invest in Microsoft stock even if you expect the AI-tech market to grow exponentially. Only in time will we know whether this truly is an “iPhone moment” for Microsoft. Jumping to hasty conclusions really won’t benefit anyone at this point.
Microsoft Stock: Consider How Much You Need
It makes sense, given the company’s leadership status in the AI-technology market, to maintain a share stake in Microsoft. If this truly is Microsoft’s “iPhone moment,” then investors will want to be positioned for long-term gains.
Of course, make your own financial decisions. You could just hold the Microsoft shares you already own. Or, if you’re under-invested, you might choose to add a few shares now. Either way, Microsoft stock earns a “B” grade as it offers exposure to a top-notch technology giant.
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.
