4 Ways To Use Microsoft’s AI Investment Success To Build Your Personal Portfolio

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Microsoft’s Q2 report indicated that the artificial intelligence (AI) boom is still strong. The company posted $69.6 billion in revenue, which was up by 12% year over year. Microsoft Azure and other cloud services revenue was the main catalyst, delivering 31% year-over-year revenue growth. Microsoft Cloud revenue makes up more than half of the company’s total revenue and was up by 21% year over year.

The tech giant has also committed to further ramp up its spending on AI infrastructure. Microsoft and other tech giants’ earnings results and statements have dissuaded fears of an AI bubble. AI spending will continue to increase as the industry gets more competitive.

Investors can use this market dynamic to boost their long-term returns. These are some of the ways investors can use Microsoft’s AI investment success to bolster their portfolios.

AI Chip Companies Look More Attractive

AI chips power the entire AI boom and their demand far outstrips their supply. It’s a good problem to have and it seems like demand will continue to increase as tech giants and countries pour more money into AI chips.

Nvidia is poised to benefit the most from this trend, but investors may also want to take closer looks at Broadcom and Advanced Micro Devices. Although those two stocks aren’t close to Nvidia’s market share, the AI pie is large enough to create more demand for their AI chips and solutions.

Cloud Revenue Is Still Growing

Wall Street was extremely picky with cloud revenue. Alphabet (per the New York Times) and Amazon (according to CloudTech.com) both barely fell below expectations and triggered sell-offs. However, cloud revenue growth was strong for these companies and Microsoft despite the headlines.

The mismatch between high revenue growth and downward stock pressure has created a buy-the-dip opportunity for patient investors. Ongoing market turbulence can prolong the time it takes to realize meaningful profits from buying low, but a good dollar-cost averaging strategy can help investors gradually build their positions in cloud stocks at discounts.

Monitor Companies That Are Using AI Effectively

Big tech giants are investing billions of dollars into AI, but part of the reason is that they have customers pouring money into cloud computing. Microsoft is innovating its cloud solutions to help customers tap into AI more effectively and some businesses will use it to their advantage.

Investors should monitor companies that are using AI and getting results. While this market cycle may feature more companies rushing to say that they have used AI, look for the ones that are actually using this technology to get ahead.

Meta Platforms and AppLovin have been using artificial intelligence to strengthen their ad offerings. Both stocks have notched significant gains over the past year, with AppLovin being one of the top tech stocks last year. Short reports have hurt AppLovin’s stock price lately, but bullish investors see it as a buy-the-dip opportunity. 

The Increase in Online Data Bodes Well for Cybersecurity

Artificial intelligence requires a lot of computing power and increases the amount of digital data. Those data points have to be protected and as AI gets more complex, it will require more nuanced solutions. 

Cybersecurity firms like Crowdstrike and Palo Alto Networks stand to benefit from the AI boom. More companies will have to invest in cybersecurity. The industry is already essential, as a single hack can temporarily shut down business operations and result in bad PR that can lose customers. The success of cloud computing and AI apps will accelerate demand for cybersecurity solutions.

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