Microsoft has become the most valuable company in the world, with a market capitalization of over $3 trillion, largely due to the proliferation of artificial intelligence (AI) within the company. Shares of Microsoft have surged more than 72% since the AI revolution began in 2023, matching the performance of the Nasdaq-100 Technology Sector index. Microsoft is capitalizing on its partnership with OpenAI and offering AI-focused solutions across its software portfolio, driving growth in markets such as cloud computing. Analysts predict that AI could add $100 billion to Microsoft’s annual revenue by 2027, boosting the company’s top line by 17%.
Amazon, the sixth-largest company in the world with a market capitalization of $1.9 trillion, is also leveraging AI to drive growth. The company’s cloud computing business, Amazon Web Services (AWS), offers a robust collection of compute instances, including AI chips from Nvidia and Amazon’s in-house chips. AWS currently holds 31% of the cloud infrastructure market, and the integration of AI tools into its platform is expected to generate significant revenue growth. Amazon has also introduced AI tools for e-commerce, simplifying the process of creating product pages for sellers and improving product discovery for customers.
Amazon’s AI-driven initiatives are expected to fuel annual earnings growth of 30% over the next five years. If this growth trajectory continues, Amazon’s stock price could increase by 158% in five years, pushing its market capitalization to $4.9 trillion. Meanwhile, Microsoft’s projected earnings growth rate of 16% could result in a 43% stock price increase, leading to a market capitalization of $4.4 trillion. Given the faster earnings growth rate of Amazon, it is plausible that the company could surpass Microsoft in size within five years.
Investors seeking exposure to AI stocks that offer long-term growth potential may consider Amazon as a promising investment opportunity. The company’s aggressive incorporation of AI across its various offerings, including cloud computing and e-commerce tools, positions it well for future growth. Amazon’s focus on AI-driven solutions for both business and consumer segments could drive significant revenue expansion and market valuation growth in the coming years.
While Microsoft remains a solid AI play with the potential for continued growth, Amazon’s accelerated earnings trajectory and strategic focus on AI innovation make it a compelling investment option. Both companies are expected to benefit from the growing demand for AI services, but Amazon’s emphasis on AI integration across its diverse portfolio could give it an edge in capturing market share and driving shareholder value. Investors looking to capitalize on the AI revolution should consider Amazon as a key player in the evolving tech landscape.
