As artificial intelligence (AI) transforms industries globally, two companies stand out for their potential in this rapidly evolving market. The United Nations Trade and Development report characterizes AI as the “defining technology of our time,” predicting its market growth from $189 billion in 2024 to a staggering $4.8 trillion by 2033. Below, we explore the key players in AI technology and their long-term investment potential.
Top AI Stocks to Buy Now and Hold for the Long Term
Microsoft’s AI Integration
Microsoft (MSFT) has strategically integrated AI tools across its platforms, including Azure cloud services and Office software. This integration positions the tech giant to benefit significantly from enterprise AI adoption.
In the last quarter, Microsoft’s cloud revenue reached $49 billion, reflecting a 26% increase year-over-year. The company is also poised to lead the $390 billion cloud services market, with Azure projected to outpace Amazon by capturing the top spot.
- Current Price: $479.28
- Market Cap: $3.6 trillion
- 52-week Range: $344.79 – $555.45
- Gross Margin: 68.76%
- Dividend Yield: 0.71%
Microsoft’s Copilot AI assistants have seen a 50% increase in adoption, enhancing productivity in various fields. CEO Satya Nadella noted an increasing demand for AI platforms, prompting the company to double its data center infrastructure over the next two years. Analysts predict annual revenue growth of approximately 15%, reaching $562 billion by fiscal 2030.
Tesla’s AI Advancements
Tesla (TSLA) is reshaping transportation and manufacturing through its innovative use of AI. The company has maintained robust cash flows, recording over $15 billion in operational cash over the past year. With $29 billion in net cash, Tesla is well-equipped to invest in advanced AI technologies.
- Current Price: $444.79
- Market Cap: $1.5 trillion
- 52-week Range: $214.25 – $498.83
- Gross Margin: 17.01%
Tesla is currently testing its Cybercab in Austin, Texas, signaling its intent to roll out a robotaxi service. This venture represents a significant opportunity, with expectations of healthy profits from operating an autonomous fleet.
Additionally, the development of Tesla’s Optimus humanoid robot could disrupt industries by performing repetitive and hazardous tasks. Demand for humanoid robots is anticipated to exceed 1 billion units, particularly for commercial use. Analysts estimate that Tesla’s annual revenue will grow by 15%, reaching $220 billion by 2029, with free cash flow increasing nearly 30% yearly.
Conclusion
Both Microsoft and Tesla are leading the charge in integrating AI across various sectors, making them prime candidates for long-term investment. Their robust growth strategies and innovation in AI technology present substantial opportunities for investors looking to capitalize on this defining technological shift.
