Even after an epic run, MSFT stock still has AI-and-cloud power to keep the bears at bay
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It’s humorous to reflect how Microsoft (NASDAQ: MSFT) was once primarily associated with Windows 95. Today, the company isn’t merely a legacy tech business; it’s a top-tier contender in cloud computing and artificial intelligence. Undoubtedly, the MSFT stock outlook is bright, making it one of the prime picks for 2024, in the tech sector and beyond.
Admittedly, it might feel like the moment has passed, especially after the remarkable surge in Microsoft stock. Nevertheless, there are continually new frontiers for Microsoft to venture into, and the plans the CEO has in store will undoubtedly captivate you.
Missed Signals: Cloud-Revenue Growth and Market Response
There are numerous ways to analyze Microsoft’s fourth-quarter 2023 results. Wedbush analyst Dan Ives described it as a “masterpiece quarter” for Microsoft, and I concur. However, despite the company’s unquestionably positive data, Microsoft stock showed no significant movement.
The real “masterpiece,” as I perceive it, lied in Microsoft’s staggering 30% year-over-year growth in cloud-business revenue. Any doubts regarding Azure’s standing in the cloud market can now be thoroughly put to rest.
Microsoft exceeded Wall Street’s consensus calls for revenue and EPS in Q4 2023, posting top-line and bottom-line beats. Additionally, Microsoft CEO Satya Nadella emphasized AI multiple times, a seemingly obligatory practice:
“We’ve moved from talking about AI to applying AI at scale… By infusing AI across every layer of our tech stack, we’re winning new customers and helping drive new benefits and productivity gains across every sector.”
If Microsoft stock remained unresponsive despite the company’s exceptional results and outstanding cloud-business performance, it’s not discouraging news. Rather, it presents an opportunity to invest in the stock while the skeptics deliberate.
Unveiling an Unexpected Strategy From Microsoft’s CEO
In light of Nadella’s aforementioned focus on AI, it’s unsurprising that the Microsoft CEO has grand designs to push the boundaries of AI technology. However, you will undoubtedly be astonished to learn about Nadella’s ambition to cultivate fresh talent in the AI-tech realm.
Could you have ever envisioned that Microsoft would effectively assemble a 2-million-person corps of AI technicians? Believe it or not, Nadella aims to train 2 million individuals in India on AI and other technologies by 2025.
While Microsoft emphasized the benefits for India’s population, stating, “India needs a skilled workforce that can use AI to solve complex problems and create value,” it’s evident that Microsoft’s management is also eyeing long-term advantages. Training young, knowledge-hungry tech talent today could position Microsoft as an unrivaled dominator in the global AI market within a few years.
Microsoft Stock: The Home Run Opportunity
Now that you grasp why my MSFT stock outlook for 2024 is so optimistic, the quarterly results are indisputable: Microsoft is a cloud behemoth and a formidable AI-tech contender. Therefore, instead of settling for modest gains, consider investing in Microsoft shares and set your sights on a grand slam by surpassing earnings, ascending as a cloud champion, and potentially asserting dominance in AI.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
