Microsoft Unveils New AI-Ready PCs

Microsoft recently revealed its latest innovation – the Copilot Plus PCs, a lineup of artificial intelligence (AI) powered personal computers. Teaming up with major manufacturing partners such as Acer, Asus, Dell, HP, Lenovo, and Samsung, Microsoft aims to sell an impressive 50 million AI PCs this year. Additionally, the tech giant is set to launch new AI-powered Surface models – the Copilot Plus Surface Laptop and Copilot Plus Surface Pro.

Enhanced AI Features

Microsoft’s new devices come with a revamped Windows 11 operating system featuring enhanced Copilot integrations. One significant AI feature showcased is Recall, a tool that tracks user actions across the web and device, enabling users to search for and retrieve various types of information securely stored on their device.

Image source: Getty Images.

Microsoft vs. Apple: The Battle of AI

Microsoft’s Copilot Plus PCs are positioned to directly compete with Apple, as they are claimed to be 58% faster than Apple’s M3 MacBook Air. This move indicates that Microsoft has taken the lead in the AI race. However, Apple is not sitting idle – reports suggest that the tech giant is securing new 2-nanometer chip-making capacity to develop its AI chips through Taiwan Semiconductor Manufacturing, its significant partner.

Financial Performance Analysis

When comparing the financial performance of Microsoft and Apple, Microsoft appears to be outshining Apple. Microsoft has been leveraging AI across its business segments, driving a 17% growth in its most recent quarterly revenues, whereas Apple witnessed a 4% decline in revenue. Microsoft currently boasts a higher forward price-to-earnings (P/E) multiple of 37 compared to Apple’s 29, reflecting its higher revenue growth.

MSFT PE Ratio (Forward) data by YCharts.

Conclusion: Microsoft Emerges as a Strong Investment

As of now, Microsoft seems to have surpassed Apple in innovation and growth potential. With its significant investments in AI and strong financial performance, Microsoft appears to be the better stock to buy. While Apple remains a formidable competitor, it needs to refocus on innovation to keep pace with Microsoft’s advancements.

Considering Investment in Microsoft?

Before making an investment decision, it’s advisable to consider expert opinions. The Motley Fool Stock Advisor team has identified the top 10 stocks for investors to buy now, excluding Microsoft. These recommended stocks have the potential for significant returns, as history has shown with previous recommendations like Nvidia back in 2005.

Investing in Microsoft may offer substantial growth opportunities, especially considering its track record in the AI sector and overall financial performance.

*Stock Advisor returns as of May 13, 2024