The Best Artificial Intelligence (AI) Growth Stock on the Nasdaq That Morningstar Says Is Still Undervalued
Publish Date: 2026-04-25 16:38:00
Source Domain: www.theglobeandmail.com
Here are some key points from the article:
– Tech stocks experienced falling share prices in the first quarter, especially tech giants like Microsoft and Intel.
– Microsoft’s significant increase in capital expenditures (capex) alarmed Wall Street despite being necessary for AI advancements.
– Microsoft’s cloud computing business saw nearly 30% year-over-year sales growth, driven by the demand for advanced cloud infrastructure.
– Morningstar identified Microsoft as being 38% undervalued, relative to their $600 fair value estimate.
– The massive capex spending by tech firms like Microsoft contributed to a shift in investor sentiment and a “Great Rotation” away from the tech sector.
– Despite concerns about its capex spending and stock price drop, Microsoft’s cloud revenue and gross margins have seen substantial growth, indicating robust business fundamentals.
– Analysts believe AI’s expected significant market growth could further provide a strong growth tailwind for Microsoft.
– Some analysts at The Motley Fool Stock Advisor did not list Microsoft among the top 10 stocks to buy now, suggesting other options might offer better potential short-term returns.
