Founded in 1993 by brothers Tom and David Gardner, The Motley Fool aims to make the world smarter, happier, and richer. Through its website, podcasts, books, newspaper column, radio show, and premium investing services, The Motley Fool has helped millions of people achieve financial freedom. Microsoft, a leader in the technology industry with a market valuation of $2. 5 trillion, continues to attract customers with its AI products. This article offers opinions that may differ from The Motley Fool's Premium Investing Services. To access top analyst recommendations, in-depth research, and investing resources, consider becoming a Motley Fool member. Microsoft (MSFT 2. 31%), founded in 1975, has maintained its position at the top of the technology industry. Despite its large size, Microsoft has demonstrated agility in dominating software, gaming, and cloud computing. Now, it has taken a leadership position in artificial intelligence (AI), which presents a significant financial opportunity in the coming decade. In its latest financial results, Microsoft showcased growth in its cloud segment, particularly in delivering AI tools to businesses worldwide.

Microsoft's investment in AI start-up OpenAI, known for its popular chatbot ChatGPT, has resulted in integrating OpenAI's technology into its product portfolio. For instance, ChatGPT powers the Bing search engine and is accessible through the Edge internet browser, providing competition to Alphabet's Google search engine and Chrome web browser. Microsoft is also targeting the workplace with Bing Chat Enterprise and 365 Copilot, catering to employees' desire to delegate tasks to AI while maintaining data protection. With $110 billion in cloud revenue in fiscal 2024, Microsoft's Azure platform accounted for more than half of that revenue for the first time. Microsoft now offers several AI models on Azure, including Meta Platforms' LLaMA 2 and OpenAI's GPT-4. The Azure OpenAI Service has experienced significant customer growth, including partnerships with large corporations like Mercedes Benz. While Microsoft faced challenges in its consumer segments, particularly in Windows OEM revenue and devices revenue, AI presents a significant opportunity for the company. Considering the potential growth in Bing's market share and the value of AI software, Microsoft has positioned itself as a key distributor of advanced AI platforms via the cloud. With a price-to-earnings (P/E) ratio of 34, Microsoft stock is positioned well for the AI revolution, presenting a potential trade higher in the coming years.