The buzz surrounding artificial intelligence (AI) continues to grow in 2024, with the public launch of ChatGPT in November 2022 sparking renewed interest. According to Cognizant (CTSH), generative AI technology has the potential to significantly impact the U.S. economy, boosting productivity by 1.7% to 3.5% and increasing GDP by an estimated $477 billion to $1 trillion annually over the next decade.
As the demand for AI solutions rises across various industries, analysts at AllianceBernstein (AB) have expressed their preference for tech giants Microsoft Corporation (MSFT) and Alphabet Inc. (GOOG). These companies have solidified their positions in the AI landscape through continuous innovation.
Microsoft, with a market cap of $3.2 trillion, has been investing heavily in AI technology, integrating it into products like Windows, Xbox, and Microsoft 365. The company’s stock has surged 28.9% over the past year, outperforming the S&P 500 Index. Microsoft also boasts a strong track record of dividend growth, with an annualized dividend of $2.93 per share.
Alphabet, with a market cap of $2.2 trillion, has integrated AI into products like Gmail and Google Maps. The company’s stock has soared nearly 41.5% over the past year, with strong revenue growth in Q1. Alphabet recently announced its inaugural quarterly dividend and a $70 billion share repurchase program.
Analysts project strong profit growth for both Microsoft and Alphabet in the coming years, with consensus “Strong Buy” ratings for both stocks. The future looks bright for these AI leaders as they continue to innovate and drive growth in the AI landscape.