Stock Market

Microsoft (NASDAQ:MSFT) stock flourished in the 1990s, when the internet gained acceptance in homes and businesses. In 2023, the toast of the town isn’t the internet, but artificial intelligence and especially generative AI.

MSFT stock is flying high because Microsoft is constantly talking about AI, but this isn’t the best time to take a share position.

I’ll admit, Microsoft made a smart move when it invested billions of dollars in OpenAI’s ChatGPT AI chatbot technology.

If you’re a true contrarian, however, then consider the possibility that the machine-learning hype surrounding Microsoft is starting to get out of hand.

Microsoft Goes All-In on AI

Instead of a typical investor relations press releases page, Microsoft has a blog where the company expresses its latest ideas. Currently, Microsoft focuses its blog on AI to the point of obsession.

Even when the blog post titles don’t specifically mention AI, you can bet that machine learning will be featured in the content. For instance, this post looks like it’s about a quantum computing product. Yet, Microsoft still mentioned AI half a dozen times.

In other posts, Microsoft emphasizes its AI-enabled products/services for developers, for customers, for all of humanity, for security, for the cloud, for a range of products… Clearly, Microsoft wants the world to know that it’s now an AI company first and foremost.

The MSFT Stock Bears Are Hibernating

It’s risky when a company puts practically all of its chips on one market segment or one type of technology. Still, Microsoft can remain a darling of the market as long as financial traders continue to obsess over AI.

Microsoft’s all-in strategy appears to be working for the time being. MSFT stock has gone up in practically a straight line since the beginning of the year. Businesses are making deals with Microsoft to capture some of that machine-learning momentum.

If you’re serious about “buy low, sell high,” then be patient and wait for the Microsoft share price to pull back 10%. As Microsoft constantly talks about AI, this is helping to pump up the share price, but no stock can just go up forever.

Take a Break With MSFT Stock

Don’t get the wrong idea. Microsoft is an innovative company and a tech giant. Plus, Microsoft really isn’t just an AI company – though you might not know that if you read Microsoft’s recent blog posts.

If you already invested in Microsoft earlier this year, consider taking some profits. Or at least, don’t be in a hurry to buy more MSFT stock. It’s likely to take a breather and go sideways or down in the coming weeks.

And if you don’t already have a share position in Microsoft, it’s fine to watch from the sidelines.

Consider waiting for a 10% pullback before hitting the “buy” button. That way, you can get exposure to Microsoft’s future growth without being a price-chaser or an AI bandwagon-jumper.

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.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.

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