Microsoft Stock: Betting Big on ‘AI-puters’ to Drive the Next Growth Phase

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Microsoft (NASDAQ:MSFT) is a Big Tech giant and a Magnificent Seven member. Even Microsoft can’t afford to be complacent. The company must innovate in generative artificial intelligence. Microsoft stock earns a “B” grade despite the challenge.

Microsoft CEO Satya Nadella told Fortune that his company must “stay humble, stay hungry, and exhibit a growth mindset.” That’s a great attitude, but where will Microsoft’s next growth phase come from?

The answer could stem from a combination of something old and something new. So, let’s investigate Microsoft’s audacious approach to reviving a struggling tech-hardware sector.

Could Microsoft and Gen-AI Save the PC Market?

Let’s get one thing straight. Microsoft doesn’t need to rescue the struggling personal computer industry. The company is already doing quite well as a purveyor of cloud-computing and AI software.

But again, Nadella and Microsoft don’t want to just coast on their current success. Hence, Microsoft is diving headfirst into the old-school PC market, but with a modern twist.

Indeed, the company might almost single-handedly revive the PC industry as Microsoft just unveiled its new Surface model laptops.

These, Microsoft claimed, are the “ultimate Copilot+ PCs, delivering incredible performance and brand-new AI experiences.”

Microsoft declared that its new Surface laptop and Surface Pro tablet are the “fastest, most intelligent Windows PC [models] ever built.” These PCs come with Microsoft’s Copilot assistant functionalities and leading-edge generative-AI features.

Microsoft Converts a Skeptic

We’re not trying to evaluate Microsoft’s AI PCs here. However, it’s noteworthy that The Wall Street Journal recently published a positive review of these PCs.

Reviewer Joanna Stern was apparently skeptical but then became a believer after trying out Microsoft’s new AI PCs:

“They’ve got improved performance, battery life and enhanced AI features … I’ve been skeptical about this whole AI PC thing … Yet after checking out the improved Surface devices and spending time talking to Nadella, I’m in.”

Stern concluded that the “future” will include “AI-puters here, there and everywhere.” This year, the term “AI-puter” might start to spread and you can credit/blame Microsoft and The Wall Street Journal for that.

Nadella is all-in on these AI PCs in 2024. A Bloomberg interview made it crystal clear that Nadella has no fear of Microsoft’s competitors in the PC market.

The CEO also gave a confident impression when he spoke with Stern, saying, “I fully expect the Copilot to be everywhere.”

Microsoft Stock: Try Something Old and Something New

Microsoft is an old company; it might actually be older than most of the people reading this. Plus, PCs are sometimes considered ancient pieces of equipment in the 2020s.

However, Microsoft is leveraging the power of generative AI to modernize PCs. It’s a somewhat risky gambit, since there’s no guarantee that businesses and individuals will ramp up their purchases of PCs.

Still, Microsoft deserves credit for taking well-considered risks when the company could have just played it safe.

Microsoft stock earns a confident “B” grade, and investors can consider holding their shares and/or adding to their share positions.

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.

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