Microsoft (MSFT) receives price target increase from Wolfe Research

We recently published a list 10 Important AI Announcements for Investors. In this article, we’ll take a look at where Microsoft Corporation (NASDAQ:MSFT) stands compared to other key AI announcements for investors.

Blue whale growththe investment fund backed by billionaire Peter Hargreaves, has reduced its holdings in major US technology companies, raising concerns about their significant AI-related spending. Financial Times reported that fund manager Stephen Yiu highlighted a significant decline in Microsoft shares, which fell out of the fund’s top ten holdings for the first time since 2017. He noted that the return on invested capital for the company could decline due to AI investments and suggested that the stock could potentially be abandoned entirely if AI costs exceed cash generation.

The “Magnificent Seven” tech giants are under increasing pressure over their increasing investments in AI infrastructure, with Wall Street increasingly cautious about returns. Yiu also reduced its stake in Meta and previously divested from Amazon and Alphabet, raising concerns that AI-driven spending would outpace profitability, the report said.

While the fund remains optimistic about Nvidia, which now accounts for about 10% of its portfolio, Yiu expressed less confidence in the other six companies. He also supports Broadcom and benefits from the development of AI infrastructure. The report said Blue Whale Growth, which manages £1.3bn, has returned 24% this year, outperforming peer funds, but significantly reducing its exposure to US technology stocks compared to benchmarks.

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In stark contrast to the reticence in Western markets, Southeast Asia’s emerging economies are struggling to establish themselves as key players in the global AI landscape. According to CNBC, the region benefits from a young, digitally savvy population and growing government support for AI initiatives. While Singapore has already made significant progress in adopting AI, other countries such as Vietnam, Indonesia and Malaysia are also accelerating their efforts to harness AI across a range of industries, from agriculture to manufacturing.

This growing focus on AI offers enormous potential for economic growth, creating new jobs and increasing productivity. However, as these countries expand their AI strategies, they face challenges related to infrastructure, digital literacy and talent needs. As experts point out, the AI ​​race in Southeast Asia is not just about adoption, but also about adapting the technology to the region’s unique needs. Despite the hurdles, the region is positioning itself as a promising hub for AI innovation, and many predict that ASEAN’s commitment to AI could help its economies thrive in the global technology ecosystem.

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Meanwhile, SoftBank Group CEO Masayoshi Son is taking a bold step to accelerate AI development worldwide. Son plans to invest $100 billion in the US over the next four years, with a focus on artificial intelligence and related infrastructure. Its goal is to create 100,000 AI-related jobs before the end of President-elect Donald Trump’s term, Reuters reports. Son is known for his strong commitment to AI and has already made significant investments in AI companies such as OpenAI and Graphcore, further demonstrating his commitment to the growth of the sector. This massive investment, coupled with Southeast Asia’s growing AI ambitions, underscores the growing global momentum behind artificial intelligence.

For this article, we selected AI stocks by reviewing news articles, stock analysis and press releases. We’ve listed the stocks in ascending order of hedge fund sentiment, drawn from Insider Monkey’s database of 900 hedge funds.

Why do we care about the stocks hedge funds invest in? The reason is simple: Our research shows that we can outperform the market by mimicking the top stock picks of the best hedge funds. Our quarterly newsletter strategy selects 14 small-cap and large-cap stocks each quarter and has returned 275% since May 2014, outperforming its benchmark by 150 percentage points (Further details can be found here).

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Microsoft Corporation (NASDAQ:MSFT) offers a variety of AI-driven solutions, including cloud services, productivity tools and enterprise applications, designed to improve business operations and security. The company integrates AI into its cloud computing, data analytics and automation services to improve customer and business interactions.

Wolfe Research analyst Alex Zukin increased Microsoft (NASDAQ:MSFT)’s price target from $495 to $515 and maintained an “Outperform” rating on the stock. In a research note, Zukin expressed great enthusiasm for the software sector in 2025. He noted that improved business fundamentals, a more relaxed regulatory environment, AI-driven growth and a healthy capital market create an ideal environment for software companies to thrive. Zukin believes this combination represents an exciting time to be in the software industry.

Total MSFT takes 2nd place on our list of important AI announcements for investors. While we recognize MSFT’s potential as an investment, we believe AI stocks are more promising for generating higher returns, and within a shorter time frame. If you’re looking for an AI stock that has more promise than MSFT but trades at less than 5 times earnings, check out our report on it cheapest AI stock.

READ MORE: The 8 Best Wide Moat Stocks to Buy Now And The 30 most important AI stocks according to BlackRock

Disclosure: None. This article was originally published at Insider monkey.