Microsoft, Oracle, and Alphabet Lead the Charge in Artificial Intelligence

As interest rate worries recede, investors are shifting focus to long-term themes like artificial intelligence (AI). The AI Stocks screener has surfaced three stocks that show how different parts of the AI story fit together: Microsoft, Oracle, and Alphabet.

Microsoft is a global technology company with operations in software, cloud, gaming, and professional networking. Its Azure OpenAI Service and Azure AI infrastructure are key to its business model, but regulators in the US, UK, and Europe are examining whether Microsoft is using its software position to steer customers into Azure. This raises questions about how quickly this investment may pay off.

Oracle, on the other hand, gives direct exposure to the AI infrastructure buildout through Oracle Cloud Infrastructure (OCI) and generative AI services that support demanding workloads such as large language models and enterprise AI agents. The company reports large AI-related contract backlogs and strong earnings and revenue growth forecasts, but trades on a lower P/E ratio than many US software peers.

Alphabet's place in the AI Stocks screener comes from Google Cloud's Vertex AI platform and Gemini large language models, which let enterprises build and run ChatGPT-style applications on Google's infrastructure. However, this push into AI has become capital-intensive, with forecasts suggesting that earnings could decline slightly over the next few years.