You have $1,000 in hand.
You’re keen to invest in an artificial intelligence (AI) stock.
Do you “take a flier” on a company whose name you hadn’t heard of prior to January, don’t know much about — and only heard about now because it has “AI” in its name?
Or would you choose a “boring” company that’s been around for decades, is known as a successful innovator, and whose products and services have more than 1 billion fans around the world?
If you take a step back — and divorce yourself from the wind-whipping hype swirling around AI right now — you’d likely choose the latter. I mean, why wouldn’t you? This established tech firm has been a “serial success story” — tackling one opportunity after another — meaning it’ll likely win in AI, too.
But amid the current AI hype storm, that’s not the kind of rational thinking most investors are engaging in right now.
There are bigger companies that have the resources, track records, and know-how to engineer the most mind-blowing advances we’ll see in AI. But they’re being overlooked for companies that most people never heard of before 2023.
I’m talking about such companies as BigBear.ai Holdings Inc. (BBAI) and SoundHound AI Inc. (SOUN).
Take a look at this chart for BBAI showing its share-price progression from February 7 till April 21:
Down nearly 50%.
Or this one from SOUN:
A 44.2% loss.
I know it’s tempting to write the bigger tech companies off as “boring” AI stocks — since everyone already knows about them.
But it’s never boring when you’re making money.
So, in today’s Market 360, we’ll talk about two “boring” tech companies that are also investing heavily in AI. I’ll run the numbers on each and share which company is the better buy right now…
Buy This: Microsoft
As I mentioned last week, on March 16, Microsoft announced the launch of Microsoft 365 Copilot, an AI-powered enhancer for its Microsoft 365 suite of apps and services, which includes Excel, Word, and PowerPoint.
Using Copilot in Excel, you won’t need to know the exact formula you should use for a particular scenario; you can simply ask Copilot questions and receive formula recommendations. Copilot will also share correlations it finds throughout the data you have and suggest what-if scenarios.
Say that you have all of your sales organized by quarter but that you sell hundreds or thousands of products.
Well, instead of having to dig through that information yourself, you can ask Copilot to do it for you.
Source: Microsoft 365 YouTube Channel
Copilot will also be able to gather information from one document and use it to create content in another.
All of these features help remove some manual tasks and make it even easier to visualize, analyze and present data.
Microsoft says it is now testing Microsoft 365 Copilot with just a handful of customers to receive feedback. But in the months ahead, it will be bringing Copilot to Excel, Word, PowerPoint, Outlook, Teams and more.
Microsoft also offers Azure OpenAI Service, which allows companies to integrate custom AI-powered experiences into their own applications — like having chatbots available to answer common customer questions.
The service currently has over 1,000 customers.
Not That: Amazon
One barrier for companies that want to incorporate AI into their products and services is that it’s incredibly expensive and time-consuming to build and train the technology from scratch.
So, through Amazon Web Services, Amazon has rolled out Amazon Bedrock to provide a way to build AI-powered apps through pretrained models.
The service also means that companies don’t have to worry about hosting large amounts of data on their own infrastructure.
There aren’t a lot of details available yet, but Bedrock is geared toward large customers building “enterprise-scale” AI apps. That’s a bit different from Microsoft’s Azure OpenAI Service, which is for customers large and small.
Some of the models hosted on Bedrock include a multilingual translation model, a conversational and text-processing model, and a text-to-image model.
Consulting and insight companies Accenture, Deloitte, Infosys and Slalom are early partners with Amazon AI.
More time will be needed to see how this takes off, but at least one of Amazon’s recent moves suggests that it may currently be falling behind Microsoft in one area or, at the very least, that it’s not as far along as it would like to be.
Amazon recently made its AI-powered code-generating service free of charge for developers and without any usage restrictions. That’s a sign that it hasn’t seen developers use it to the extent Amazon had hoped.
Its rival, GitHub Copilot (owned by Microsoft), a cloud-based AI tool for coding, had over a million users in January. GitHub Copilot charges $10 per month for individuals and $19 per user per month for a business account.
The bottom line: Microsoft is the better profit bet.
The Tool to Find More Profit Opportunities
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Anyone who has access to these predictions could use them to avoid big losses… and make big monthly gains with a level of certainty that’s rarely – if ever – been achieved before.
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Sincerely,
Louis Navellier
Editor, Market 360
The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:
Microsoft Corp. (MSFT) and Amazon.com, Inc. (AAPL)
