Microsoft Corporation develops and supports software, services, devices and solutions worldwide. The Productivity and Business Processes segment offers office, exchange, SharePoint, Microsoft Teams, office 365 Security and Compliance, Microsoft viva, and Microsoft 365 copilot; and office consumer services, such as Microsoft 365 consumer subscriptions, Office licensed on-premises, and other office services. This segment also provides LinkedIn; and dynamics business solutions, including Dynamics 365, a set of intelligent, cloud-based applications across ERP, CRM, power apps, and power automate; and on-premises ERP and CRM applications. The Intelligent Cloud segment offers server products and cloud services, such as azure and other cloud services; SQL and windows server, visual studio, system center, and related client access licenses, as well as nuance and GitHub; and enterprise services including enterprise support services, industry solutions, and nuance professional services. The More Personal Computing segment offers Windows, including windows OEM licensing and other non-volume licensing of the Windows operating system; Windows commercial comprising volume licensing of the Windows operating system, windows cloud services, and other Windows commercial offerings; patent licensing; and windows Internet of Things; and devices, such as surface, HoloLens, and PC accessories. Additionally, this segment provides gaming, which includes Xbox hardware and content, and first- and third-party content; Xbox game pass and other subscriptions, cloud gaming, advertising, third-party disc royalties, and other cloud services; and search and news advertising, which includes Bing, Microsoft News and Edge, and third-party affiliates. The company sells its products through OEMs, distributors, and resellers; and directly through digital marketplaces, online, and retail stores. The company was founded in 1975 and is headquartered in Redmond, Washington.

У Microsoft сильный бизнес-профиль, но текущая оценка уже заметно опережает фундаментальную динамику. По прибыльности компания выглядит очень качественно: ROE 33.61%, ROA 19.21%, ROI 30.38%, операционная маржа 46.67% и чистая маржа 39.04% существенно выше отраслевых медиан, а их траектория за 5 лет в целом стабильна или улучшается. Выручка, валовая прибыль, операционная прибыль и чистая прибыль продолжают расти, что подтверждает масштаб и устойчивость монетизации облака, ПО и экосистемы. Баланс также выглядит комфортно: debt/equity всего 0.09, долг умеренный, а собственный капитал и активы растут, что снижает финансовые риски. Ликвидность приемлемая, хотя current ratio 1.39 и quick ratio 1.38 не являются выдающимися и немного ниже медианы отрасли. Главный сдерживающий фактор — мультипликаторы: P/S 10.13, P/B 7.88, P/FCF 37.86 и P/E 25.50 остаются высокими относительно сектора, даже несмотря на то, что P/E ниже отраслевой медианы. Это означает, что рынок уже закладывает в цену высокое качество, устойчивый рост и сильную рентабельность. Дивидендная доходность практически отсутствует, поэтому инвестиционный кейс строится почти полностью на росте прибыли и переоценке, а не на текущем денежном потоке для акционера. На фоне очень сильных операционных метрик и одновременно дорогой оценки разумно ожидать более сдержанную переоценку, чем подсказывает качество бизнеса. В сумме фундаментал поддерживает компанию как лидера с низким балансным риском, но не даёт оснований для агрессивного повышения целевого ориентира. Для инвестора это скорее история качественного удержания, чем явной недооценки.

Microsoft Corporation

Сильный индекс, значительно упал. Оптимистичный взгляд на свои позиции резко сменился на неуверенность.

Strong index, significantly down. An optimistic view of his position suddenly changed to uncertainty.

Сильный индекс, без изменений. Рынок не поддерживает быков.

Strong index, flat. The market does not support the bulls.

Средний индекс, без изменений. Отток средств из лонгов на высоком уровне.

Medium index, flat. Outflow of funds from longs at a high level.

Microsoft демонстрирует выдающуюся рентабельность и рост, но высокие мультипликаторы и слабая дивидендная доходность ограничивают потенциал переоценки.

Key Points
Microsoft's Azure grew 40% last quarter, outpacing Amazon's cloud unit.
Amazon Web Services just posted its fastest growth in 15 quarters.
One of the two stocks looks more attractive on both growth and price.
The biggest question hanging over the AI boom is whether the enormous sums invested in it will yield a return. For the two companies that dominate cloud computing, the payoff shows up in their cloud divisions.
Microsoft (NASDAQ: MSFT) runs Azure, and Amazon (NASDAQ: AMZN) runs Amazon Web Services (AWS) -- the two biggest sellers of rented computing power and the platforms turning artificial intelligence (AI) demand into revenue. Together, they plan to spend close to $400 billion on capital expenditures this year, much of it on AI data centers.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Both stocks have lagged the market this year, with Microsoft among the megacaps' biggest laggards, down about 19% year to date as of this writing. Is it the better buy? Or should investors bet on the better-performing stock of the two: Amazon?
Microsoft: Azure stays out front on growth
The case for Microsoft starts with a single number. In its fiscal third quarter of 2026 (the period ended March 31, 2026), Azure and other cloud services revenue grew 40% year over year, edging up from 39% the prior quarter. That keeps Azure ahead of AWS, which has a slower growth rate.
Additionally, Microsoft's overall cloud business, as Microsoft defines it, goes well beyond Azure. Total Microsoft cloud revenue reached $54.5 billion, up 29%, and the company's AI business passed a $37 billion annual run rate, up 123%. And commercial remaining performance obligations (revenue under contract but not delivered) climbed 99% year over year to $627 billion.
Further, profitability arguably sets the software giant apart. Even with heavy AI spending, its operating margin reached 46.3% in the fiscal third quarter, up from 45.7% a year earlier. And it impressively returned $10.2 billion through dividends and buybacks during the period.
Of course, there's a spending story behind the software giant's cloud growth. Microsoft expects to spend about $190 billion on capital expenditures this year -- up 61%, and its gross margin has narrowed as data-center depreciation mounts. Its deal with OpenAI also changed in April, leaving Microsoft's access to OpenAI's technology no longer exclusive.
At about 23 times earnings, Microsoft's valuation looks attractive next to its underlying business growth. Indeed, on the company's fiscal third-quarterearnings call chief financial officer Amy Hood said Microsoft expects Azure growth to show "modest acceleration in the second half of the calendar year compared with the first half."
Amazon: AWS reaccelerates, with more behind it
Amazon's cloud growth is slower, but it has shown a more meaningful acceleration in recent quarters. AWS revenue rose 28% year over year in the first quarter of 2026, the fastest growth in 15 quarters and an acceleration from 24% in the fourth quarter of 2025 and 20% in the third.
"It is very unusual for a business to grow this fast on a base this large, and the last time we saw growth at this clip, AWS was roughly half the size," said Amazon CEO Andy Jassy on the company's first-quarterearnings call
AWS is where Amazon makes most of its money. It produced $14.2 billion in operating income in Q1 -- close to 60% of total operating profit on about a fifth of revenue, at a margin near 38%.
Further, Amazon's retail business looks solid, with North America sales up 12% in Q1. And advertising revenue has topped $70 billion over the trailing 12 months.
Notably, AWS's signed-contract backlog reached $364 billion, even before including a recent Anthropic deal worth more than $100 billion. But Amazon's spending to support its cloud computing growth story is just as aggressive as Microsoft's. The company expects capital expenditures to total about $200 billion this year. And its free cash flow has dropped to about $1 billion over the past year, from nearly $26 billion.
And when it comes to valuation, Amazon is easily the more expensive stock. Its price-to-earnings ratio sits at about 29 as of this writing.
Which is the better AI cloud stock?
If I had to choose between these two stocks today, I'd lean toward Microsoft after its stock's recent severe pullback. The software giant's Azure is growing faster than AWS, yet the stock trades at a lower price-to-earnings ratio. Add in an operating margin near 46% and a dividend, and the company returns more profit and more cash per dollar invested to shareholders.
Of course, Amazon isn't bad in its own right. AWS is reaccelerating, its cloud margins are strong, and its retail and advertising arms are growth engines Microsoft lacks. Further, both of these stocks face substantial risks. Microsoft's margins are under pressure, and its OpenAI edge has eroded some, while Amazon's free cash flow has nearly vanished. Further, both companies will need to demonstrate to investors an attractive return on invested capital from their AI spending in the coming years.
What would change my view? If AWS keeps closing the growth gap with Azure while Microsoft's margins slip, the case could flip quickly.
Don’t miss this second chance at a potentially lucrative opportunity
Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.
On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $532,856!*
Apple: if you invested $1,000 when we doubled down in 2008, you’d have $55,487!*
Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $433,268!*
Right now, we’re issuing “Double Down” alerts for three incredible companies, available when you join Stock Advisor, and there may not be another chance like this anytime soon.
*Stock Advisor returns as of June 14, 2026.
Daniel Sparks and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Microsoft. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The Better AI Cloud Stock: Microsoft or Amazon?

Key Points
Roku shares moved higher on Friday afternoon, after Bloomberg reported that the streaming pioneer was exploring a potential sale of the company.
With Roku growing faster than it has in four years, it seems like the wrong time to cash out.
It's more bitter than sweet when a high-conviction stock you own is on the bidding block.
You're not supposed to be upset when you see your largest holding trading sharply higher, but that's just where I was on Friday afternoon. Roku (NASDAQ: ROKU) shares popped 20% on the final market day of the week, most of that coming in the last hour and change.
I ran through the usual suspects that would cause this kind of midday jump. It couldn't be fresh financials. Roku is six weeks away from its next quarterly update, and even if that wasn't the case, it wouldn't push out results during the trading day. A major analyst upgrade wasn't going to create much of a fuss for a widely followed company. An activist investor rattling the cage was unlikely. With Roku's ascending fundamentals and market-thumping stock performance over the past year, a proxy battle couldn't be in the cards.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
A marketing or content partnership, like the promising ad deal Roku struck with Amazon last year, can move the stock higher. It just didn't seem likely that it would be that much higher. That left the lone possibility for the spike being Roku's status as a buyout candidate, and, unfortunately, I was right.
Thinking outside the box
Bloomberg reported late in Friday's trading day that Roku is exploring the sale of the company. Unnamed sources close to the matter say that discussions have taken place with at least one media company as a potential buyer. Buyout chatter doesn't always move a stock, but when it comes from a historically reliable news source, the market takes it seriously.
Buyout talks usually end in question marks instead of exclamation points and signatures, and Roku isn't desperate. It will need someone to pay a healthy premium to take it out of investors' hands. The shares have soared 87% over the past year. It was crushing the market with a roughly 50% jump before Friday's pop.
Roku is finally becoming the company investors were hoping it would be. It's been consistently profitable over the past year. The 22% year-over-year growth it posted in its latest quarter is its strongest top-line increase in four years. The same company that was struggling with monetization a couple of years ago is coasting now. Roku delivered 27% growth in ad revenue and a 30% uptick for its subscriptions business in the first quarter. With a growing audience of more than 100 million homes on its platform, Roku continues to be larger than the well-financed consumer tech titans in this space.
It only helps Roku's leverage that Evercore ISI's analyst raised its price target on the shares earlier in the day from $160 to $185. Even after Friday's afternoon surge, that analyst price target is a healthy 29% premium to its weekly close.
Teardrops in the bidding war
I've written about Roku's buyout potential for years. Even last summer, in a podcast discussing the next potential Rule Breakers buyout, I went with Roku. I always figured it would be one of the consumer tech giants in this space. More than likely, I figured it would be a tech behemoth that never made a dent in this market. That's you, Microsoft.
Bloomberg's report that Roku's first conversation has been with an unnamed media company is surprising. The appeal to Roku is its agnosticism, a big reason it's been able to keep three of the "Magnificent Seven" companies in this niche far behind in its rearview mirror. If a media company behind one of the leading streaming service stocks gobbles up Roku, it's going to be harder to appeal to the thousands of other streaming apps on its operating system.
Sure, there's an allure to pitching streaming ads to Roku's gargantuan audience. Connected TV is the future, and Roku is in the pole position, with its viewers spending an average of more than four hours a day on the platform.
You can argue that I should be happy if someone is willing to pay 20% to 30% more for Roku stock than where it's trading at today. Even if it takes a few quarters for the deal to close, it should beat the market. I can also just bow out when a potential deal is announced, putting that money to work elsewhere.
You would be right, but I'm still allowed to be selfish. When you put in the time and research into a high-conviction stock, it's not easy to find a replacement. Suffering through plenty of highs and lows with Roku over the years, I hate to see a potential exit strategy now, when the bullish momentum actually feels sustainable.
I won't get in the way of a buyout. I'm not going to storm the wedding and object to the pairing when given the chance. But I will take my premium and move on to the reception hall. So if you see me teary-eyed as the Chicken Dance plays, know that I wasn't the chicken here.
Should you buy stock in Roku right now?
Before you buy stock in Roku, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Roku wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $433,268!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,259,391!*
Now, it’s worth noting Stock Advisor’s total average return is 935% — a market-crushing outperformance compared to 207% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of June 14, 2026.
Rick Munarriz has positions in Roku. The Motley Fool has positions in and recommends Amazon, Microsoft, and Roku. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Please, Don't Give My Roku Stock Away

Key Points
Oracle's data centers are highly sought after by artificial intelligence (AI) powerhouses like OpenAI, because of their fast processing speeds and low cost.
Oracle has an order backlog worth $638 billion from customers who are waiting for more data centers to come online, but I see a few issues with that number.
Oracle stock is down 44% from last year's record high, but it isn't necessarily cheap.
As I write this, 12 publicly listed American companies have a market capitalization of $1 trillion or more, with SpaceX being the newest member of the prestigious club. Software and cloud infrastructure giant, Oracle (NYSE: ORCL), was tantalizingly close to joining them late last year when its market cap topped $935 billion, but its stock has since hit a wall.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Oracle operates some of the fastest, and most cost-efficient data centers for artificial intelligence (AI) training and inference workloads, and it has a gigantic order backlog for computing capacity worth $638 billion. However, there is a real possibility that some of Oracle's top customers won't be able to fulfill their obligations, so investors are treading with caution.
Oracle stock is down 44% from its all-time high, and here's why the dip might not be a buying opportunity.
A leader in the AI infrastructure race
Oracle is building data centers as fast as it can to fill demand for computing capacity from its AI customers, which include OpenAI, Meta Platforms, and Elon Musk's xAI, to name a few. It fills these data centers with thousands of specialized chips called graphics processing units (GPUs), which are supplied by Nvidia and Advanced Micro Devices.
Oracle has a few advantages over other cloud providers. First, it prioritizes automation in its data centers, so it can bring them online much faster than competitors who rely on human-centric infrastructure management. Second, it uses proprietary remote direct memory access (RDMA) networking technology, which shifts data between GPUs faster than traditional Ethernet networks.
These attributes result in faster processing speeds and lower costs, which is a winning combination for AI developers who often pay for computing capacity by the minute.
Oracle has also built some enormous GPU clusters, allowing developers to tap into more than 131,000 of the latest chips from Nvidia and AMD. This is a key reason why companies at the forefront of the AI revolution -- like OpenAI -- use Oracle's infrastructure.
A big chunk of Oracle's backlog is from one customer
Oracle generated $19.2 billion in total revenue during its fiscal 2026 fourth quarter (ended May 31), which was a 21% increase from the year-ago period. Oracle Cloud Infrastructure (OCI) contributed $5.8 billion, which grew at a significantly faster pace of 93%, highlighting the significant demand for data center capacity.
But the headline number in this report was Oracle's $638 billion in remaining performance obligations (RPO), which soared by 363% year over year. RPO reflects the value of signed contracts for services that haven't been delivered yet, so it's similar to an order backlog. Oracle says the $638 billion figure is a good indication of future revenue, but investors should be aware of a few issues.
First, according to a report by The Wall Street Journal from last September, around $300 billion of Oracle's RPO was attributable to OpenAI alone. The start-up raised $122 billion from investors in March, but it only has around $25 billion in annualized revenue and is still posting losses. Therefore, it's unclear how the company will fulfill this enormous commitment to Oracle, especially since it has agreements of similar size with other cloud providers like Microsoft.
Second, Oracle only expects to convert 12% of its RPO into revenue over the next 12 months, followed by a further 34% in the 24 months after that. In other words, less than half of its RPO could become actual revenue over the next three years, which is a very wide window in an industry moving as quickly as AI. Since we are already witnessing cracks in the demand picture, RPO might not be the best indicator after all.
Third and finally, Oracle is carrying over $122 billion in long-term debt, and it just announced plans to raise another $40 billion through a mix of debt and equity. The company is investing heavily to build more AI data centers, which creates a risky situation for investors if that big RPO number doesn't turn into revenue.
Oracle stock looks fairly valued
Oracle generated generally accepted accounting principles (GAAP) earnings of $5.83 per share during fiscal 2026, placing its stock at a price-to-earnings (P/E) ratio of 31.6. That is a slight discount to the Nasdaq-100 index, which trades at a P/E of 34.6, so Oracle might be close to fair value relative to a basket of its big-tech peers.
However, Wall Street is only forecasting 7.7% earnings growth in fiscal 2027, so there might not be a whole lot of room for upside in its stock over the next 12 months. The Street is expecting much faster growth of 45.7% in fiscal 2028, but it's tough to rely on that prediction with any confidence right now given some of the issues I highlighted earlier.
In summary, investors might want to take a wait-and-see approach to Oracle. If the company continues to deliver positive results over the next few quarters, then there might be an opportunity to take a long-term position in its stock at the right price.
Should you buy stock in Oracle right now?
Before you buy stock in Oracle, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Oracle wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $433,268!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,259,391!*
Now, it’s worth noting Stock Advisor’s total average return is 935% — a market-crushing outperformance compared to 206% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Meta Platforms, Microsoft, Nvidia, and Oracle. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This Artificial Intelligence (AI) Stock Appeared Destined for the $1 Trillion Club. Here's Why It Lost Momentum.

Key Points
Amazon is more leveraged to cloud computing than Microsoft is.
Both companies are growing and are valued similarly.
Two of the largest and most important companies in the world are Microsoft (NASDAQ: MSFT) and Amazon (NASDAQ: AMZN). Both companies rank among the top five largest companies in the world, coming in at fourth and fifth, respectively. However, investors may be torn between which is the better choice.
On the surface, they look like completely different businesses, but the more you dig, the more you'll find they have in common. But which is the better buy? Let's find out.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Cloud computing is a major component for each
Ask your average person what each company does, and you'd likely get a response along the lines of: "Microsoft makes computer software, and Amazon sells goods and delivers them." While those two statements aren't wrong, they ignore the most important part of each business: cloud computing.
Both Microsoft and Amazon have major cloud computing divisions, with Microsoft Azure and Amazon Web Services (AWS) integral to their businesses. The effect cloud computing has on their businesses is impressive, especially with Amazon. AWS accounted for 59% of operating profits in Q1 despite generating only 21% of total revenue. Microsoft is less granular with its cloud reporting, and we only know that it grew 40% year over year -- Microsoft's fastest-growing individual unit.
These two are very similar businesses and are the primary reasons to invest in the stock, but you're not going to find much difference between the two, so let's look at their other business segments.
For Microsoft, a significant chunk of its sales comes from business productivity software, a high-margin business that's pretty safe during a downturn. Amazon's commerce business is also solid, but it operates on a low-margin model (sometimes at a loss) and can be impacted by consumer sentiment.
Microsoft has a stronger core business outside of cloud computing, so I'm giving it the win here.
Winner: Microsoft
Both companies are growing at a similar rate
During their most recent quarters, each business grew at around the same pace. Microsoft's revenue rose 18% year over year, and its cash from operations rose 26%. Cash from operations is a better metric for these two companies than earnings because each is spending heavily on data centers and also has various one-time effects coming from significant investments in generative artificial intelligence firms like Anthropic and OpenAI.
Amazon's revenue grew 17% year over year, but its cash from operations rose 53% thanks to AWS' strength.
Because there is such a difference in profit margins between Amazon's commerce and cloud business, it will likely continue to grow cash from operations at an outsize pace for some time, as its high-margin business is growing far faster than its low-margin businesses. Microsoft is more balanced and won't show as rapid a cash flow growth as Amazon will in the future.
Winner: Amazon
Both stocks are priced cheaply from a historical standpoint
Sticking with the trend of using cash from operations, both stocks are valued at a pretty cheap level, at least compared to the last five years.
This price tag, especially for Microsoft, is far off from its normal levels. Even Amazon is valued decidedly lower than it was over the previous few years, but it's not down as much. With both companies trading at nearly identical prices, I don't know if I can call one a winner here. They are both excellent stocks to buy and have the same price tag. As a result, I'm going to call this one a tie.
Winner: Tie
A tie?!
The reality is that both Amazon and Microsoft are excellent investments. I don't think investors can go wrong with either, and with their attractive prices, now is a perfect time to buy. However, this analysis cannot just end in a tie. If I'm looking for a differentiating factor, I think Amazon has it.
Amazon's custom AI chip business is exploding, growing at a triple-digit year-over-year pace. Additionally, it has deep partnerships with Anthropic. While Microsoft has its own custom AI chip and has a partnership with OpenAI, Amazon's custom chip business is doing better, and by all accounts, Anthropic's models are outperforming OpenAI's. As a result, I'll give the edge to Amazon at the moment.
Should you buy stock in Amazon right now?
Before you buy stock in Amazon, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Amazon wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $433,268!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,259,391!*
Now, it’s worth noting Stock Advisor’s total average return is 935% — a market-crushing outperformance compared to 206% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of June 14, 2026.
Keithen Drury has positions in Amazon and Microsoft. The Motley Fool has positions in and recommends Amazon and Microsoft. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Better Stock to Buy Now: Amazon vs. Microsoft

Key Points
OpenAI confidentially filed its IPO registration information with regulators this month.
OpenAI's largest outside investor has economic ties to the artificial intelligence (AI) lab beyond an equity stake.
A new closed-end fund has a relatively large position in OpenAI and is offering a discounted management fee.
This year is set to be the biggest year for initial public offerings (IPOs) in history. We've already seen a handful of big offerings so far, most notably Space Exploration Technologies, known as SpaceX, which came to market at a $1.77 trillion valuation. But that could be just the first of three mega-artificial intelligence (AI) companies making their market debuts this year.
One of those was OpenAI, which took the first steps toward its IPO, confidentially filing its registration statements with the Securities and Exchange Commission on June 8. But the company warned that the actual IPO date could sometime well in the future. "We have not decided on timing yet; it may be a while because there are things we want to do that are likely easier as a private company," the company said in a blog post announcing the filing.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
But investors looking to gain exposure to the leading AI lab don't have to wait for the IPO. There are several options to add it to your portfolio today.
Invest in its largest outside shareholder
When OpenAI transitioned from a nonprofit to a capped-profit company in 2019, Microsoft (NASDAQ: MSFT) became an early investor in the for-profit subsidiary with a $1 billion commitment. It also integrated OpenAI's services into Microsoft's cloud computing platform, Azure.
Microsoft has since added $12 billion more to its investment. After OpenAI underwent further corporate restructuring, Microsoft now holds a 27% stake in the business. Although an IPO will dilute that stake somewhat, it's poised to remain the largest outside shareholder.
At a market value of about $910 billion based on private market transactions, that means Microsoft's stake is currently worth about $245 billion. That's about 8.5% of the company's total market cap as of this writing.
Microsoft will also benefit from a revenue share agreement through 2030. Microsoft receives 20% of OpenAI's revenue, up to $38 billion total. As part of the agreement, Microsoft no longer pays OpenAI for using its intellectual property. That provides further exposure to OpenAI's results over the medium term.
On top of that, OpenAI has committed to spending $250 billion on Azure services through 2032. That gives Microsoft the confidence to invest heavily in building out compute capacity to meet demand for Azure.
OpenAI is just a piece of Microsoft's total backlog of remaining performance obligations, which reached $627 billion last quarter. So the overall expected return on invested capital remains strong for the cloud computing business.
Although Microsoft offers much more than just exposure to OpenAI's economics, it's one of the best ways to invest in OpenAI's future success, along with one of its biggest partners.
Invest in a fund that holds the stock already
Multiple closed-end funds hold OpenAI shares in their portfolios, but for investors who want as much exposure to OpenAI as possible, one of the best options is Robinhood's Robinhood Venture Fund I (NYSE: RVI).
The fund opened in March, focusing primarily on AI and fintech companies. The largest holding in its first quarterly disclosure was Databricks, with a net asset value of $82 million, or about 12.5% of the fund's total value. However, the investment manager added $75 million worth of OpenAI in April, putting it on a roughly equal footing with the Databricks investment.
There are a few important considerations before investing in the Robinhood fund. First, it's common for closed-end funds to trade below their net asset value due to concerns about liquidation. That could result in increased volatility in the fund's share price, on top of the inherently volatile investments it holds.
The second consideration is the expense ratio. Investors will pay 3.13% of assets under management. Robinhood is offering a reduced management fee as an introductory rate through Aug. 27, bringing the total fee down to 2.13%.
Despite those concerns, the fund offers a concentrated way to gain exposure to OpenAI and several other high-profile private companies in the AI and fintech sector. It could be worth a small position for some investors.
Don’t miss this second chance at a potentially lucrative opportunity
Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.
On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $532,856!*
Apple: if you invested $1,000 when we doubled down in 2008, you’d have $55,487!*
Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $433,268!*
Right now, we’re issuing “Double Down” alerts for three incredible companies, available when you join Stock Advisor, and there may not be another chance like this anytime soon.
*Stock Advisor returns as of June 14, 2026.
Adam Levy has positions in Microsoft. The Motley Fool has positions in and recommends Microsoft. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

OpenAI Just Took the First Step Toward Its IPO. Here's How to Invest in the Stock Now.

Key Points
Most S&P 500 index funds are market-cap weighted.
An alternative approach is an equal-weighted fund.
Both can serve you well, and one looks less risky.
What's the investment I've recommended most often for most people? A low-fee exchange-traded fund (ETF) that tracks the S&P 500 index, such as the Vanguard S&P 500 ETF (NYSEMKT: VOO) or the SPDR S&P 500 ETF (NYSEMKT: SPY). I suspect many of my colleagues would say the same. Even Warren Buffett has recommended it. In his 2016 letter to shareholders, he noted, "Over the years, I've often been asked for investment advice... My regular recommendation has been a low-cost S&P 500 index fund."
So I'm sorry to point out that it's not a perfect kind of investment. It has some issues.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
What's wrong with the S&P 500?
Here's a big one: It's way more concentrated than most people realize. For example, check out its recent top 10 components:
Company
Weight in S&P 500
Nvidia
7.43%
Alphabet (A and C share classes)
6.59%
Apple
6.48%
Microsoft
4.35%
Amazon.com
3.92%
Broadcom
2.74%
Tesla
2.26%
Meta Platforms
2.17%
Micron Technology
1.65%
Berkshire Hathaway
1.56%
Those weightings may not seem huge until you remember that there are about 490 other companies. These 10 above represent about 2% of the index's holdings but 39% of its total value. So if you invest in the S&P 500 because it's a great way to be quickly and easily invested in 500 of America's biggest companies, you are invested in those companies, but more than a third of your investment is in these 10 companies alone.
Here are the weightings of some other companies:
Company
Rank in S&P 500
Weight in S&P 500
McDonald's
54
0.30%
PepsiCo
59
0.29%
Pfizer
80
0.22%
Kroger
261
0.06%
Clorox
468
0.02%
As you can see, you won't have much invested in the vast majority of the companies.
That can be OK, though. Maybe you like those tech heavyweights in the top 10 -- which include all of the "Magnificent Seven" stocks (Apple, Amazon, Alphabet, Meta Platforms, Microsoft, Nvidia, and Tesla). Maybe you want to invest in the 500 companies, with most of your money going to the biggest. After all, most of them have grown very rapidly over the past few years.
Keep in mind, though, that when there's a stock market crash or correction, as there invariably is now and then, those high-flying growth stocks are often the ones that fall harder. That, too, can be OK as long as you have a very long-term investing period. But it's not ideal.
Is there a better alternative to the S&P 500?
There is an alternative to standard S&P 500 index funds that's worth considering: An equal-weighted one. Standard ones are weighted by market cap, meaning the larger a company's market cap, the greater its weighting. The Invesco S&P 500 Equal Weight ETF (NYSEMKT: RSP), in contrast, is equal-weighted. The 500 components are rebalanced quarterly, so between rebalancings you'll see fluctuations in the weightings as various stocks gain or lose value from day to day and year to year. Check out its recent top 10 holdings:
Company
Weighting
Dell Technologies
0.48%
SanDisk
0.48%
Intel
0.42%
Advanced Micro Devices
0.42%
Humana
0.40%
Micron Technology
0.40%
Hewlett Packard Enterprise
0.40%
Seagate Technology
0.40%
ON Semiconductor
0.35%
Western Digital
0.35%
Note that Micron Technology appears in both top 10 lists, but in the earlier one, it has a 1.67% weighting, while in the fund above, it has a much lower weighting of 0.35%. This kind of index fund has you much more invested in the other 490 stocks beyond the top 10 -- though, of course, each stock has a relatively minor weighting. But every promising stock will have an equal chance of outperforming for you.
An equal-weighted S&P 500 ETF may not grow as fast as a market-cap-weighted one, but during a market downturn, it may hold its value a bit more. Over the past 15 years, this ETF has averaged annual gains of about 12%, while the Vanguard S&P 500 ETF has averaged 14.4%. There's a trade-off, but it's not enormous. Give equal-weighted S&P 500 index funds some consideration.
Should you buy stock in Vanguard S&P 500 ETF right now?
Before you buy stock in Vanguard S&P 500 ETF, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Vanguard S&P 500 ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $433,268!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,259,391!*
Now, it’s worth noting Stock Advisor’s total average return is 935% — a market-crushing outperformance compared to 206% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
Selena Maranjian has positions in Advanced Micro Devices, Alphabet, Amazon, Apple, Berkshire Hathaway, Broadcom, Meta Platforms, Micron Technology, Microsoft, Nvidia, and Pfizer. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Apple, Berkshire Hathaway, Broadcom, Hewlett Packard Enterprise, Intel, Meta Platforms, Micron Technology, Microsoft, Nvidia, Pfizer, Tesla, Vanguard S&P 500 ETF, and Western Digital. The Motley Fool recommends Kroger and ON Semiconductor and recommends the following options: long January 2028 $320 calls on McDonald's and short January 2028 $340 calls on McDonald's. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Have S&P 500 Index Funds, Often Touted as the Best Stock Investments, Become Dangerous? There's a Worrisome Development -- and a Possibly Better Alternative.

Key Points
Microsoft looks like a huge bargain compared to SpaceX.
Nebius Group is growing far faster than SpaceX.
Nvidia provides a combination of growth and value that SpaceX doesn't offer.
Space Exploration Technologies (NASDAQ: SPCX), known as SpaceX, is attracting a lot of attention, as it should. It's the largest IPO the world has ever seen, led by the visionary Elon Musk. Although Musk may be a polarizing figure, there's no denying the success he's delivered to investors so far through Tesla.
While investors may want Tesla-like returns, achieving them with SpaceX will be nearly impossible given its sheer size. Instead, I think investors should focus on other stocks that look like great values or are growing at lightspeed. These all appear to be better investments than SpaceX and will make investors far more money over the next few years.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
1. Microsoft
Microsoft (NASDAQ: MSFT) may sound like a boring old investment, which may be partially true. However, it has a few things going for it.
First, it's well off its all-time highs. The market has turned sour on Microsoft's stock despite the company's excellence in many areas, specifically in artificial intelligence (AI). Its AI product lineup grew annual recurring revenue by 123% to $37 billion during its most recent quarter.
Additionally, its cloud computing division, Azure, increased revenue by 40%. Overall, Microsoft's quarterly revenue rose at an 18% pace to $82.9 billion. For reference, SpaceX's 2025 revenue totaled $18.7 billion, up 33%.
Microsoft is also attractively valued, trading at one of the lowest price-to-earnings (P/E) ratios the market has seen in a while.
While SpaceX may be the flashy stock, Microsoft is the workhorse that will deliver for investors over the long term. As a result, I think it's an excellent buy right now.
2. Nebius Group
If Microsoft is growing too slowly for your liking, Nebius (NASDAQ: NBIS) might be a better pick. In one aspect, Nebius and SpaceX may be head-to-head competitors.
Nebius is a neocloud company specializing in AI-ready cloud computing. Part of SpaceX's business plan is to launch AI data centers into space, and whether it's a success remains to be seen.
One thing that isn't up for debate is Nebius's success right now. In the first quarter, it grew revenue by 684% year over year. That's not the end of it, either. Wall Street analysts expect 550% revenue growth for 2026 and 225% in 2027. SpaceX can only dream of growth like that, and it doesn't have any divisions remotely close to Nebius's growth rate.
I think Nebius is primed to continue growing rapidly and will easily outpace SpaceX over the next few years, making it a better stock pick.
3. Nvidia
If you're looking for a combination of growth and value, then Nvidia (NASDAQ: NVDA) is your ticket.
The world's largest company makes GPUs that power AI workloads in data centers. It's growing at a remarkable pace right now and is expected to keep that up for some time. For fiscal year (FY) 2027 (ending January 2027), Wall Street analysts expect 81% growth and 41% in FY 2028. Those are both faster growth rates than SpaceX is currently growing, and Nvidia can also be purchased at a pretty attractive valuation.
At 31 times earnings, it's not particularly expensive, especially compared to other tech stocks like Apple and Amazon, which trade at 36 and 29 times earnings, respectively. Neither of these (or any other big tech stock, including SpaceX) has growth remotely close to Nvidia.
Nvidia is a rare combination of growth and value and will likely result in huge returns. I think it will easily outperform SpaceX moving forward, and I'm putting my money there instead of the latest hot IPO.
Don’t miss this second chance at a potentially lucrative opportunity
Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.
On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $532,856!*
Apple: if you invested $1,000 when we doubled down in 2008, you’d have $55,487!*
Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $433,268!*
Right now, we’re issuing “Double Down” alerts for three incredible companies, available when you join Stock Advisor, and there may not be another chance like this anytime soon.
*Stock Advisor returns as of June 14, 2026.
Keithen Drury has positions in Amazon, Microsoft, Nebius Group, Nvidia, and Tesla. The Motley Fool has positions in and recommends Amazon, Apple, Microsoft, Nvidia, and Tesla. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

3 Genius Stocks I'm Buying Instead of the SpaceX IPO

Key Points
Apple's capital expenditures totaled about $12.7 billion in fiscal 2025, a fraction of its mega-cap peers' spending.
The company announced a new $100 billion share repurchase program in April.
AI infrastructure stocks have sold off this month on spending and financing concerns.
Some of the technology world's biggest spenders had a rough week. Oracle sank by a double-digit percentage after pairing record quarterly results with plans to raise tens of billions of dollars in additional financing for its artificial intelligence (AI) data center build-out. Chip stocks fell hard, too, as investors questioned when all of this spending starts paying for itself.
Some investors may think the best way to diversify away from these AI companies is to venture beyond tech. But I actually think one of tech's biggest names offers some good balance to stocks like this. I'm talking bout the $4.3 trillion iPhone-maker: Apple (NASDAQ: AAPL).
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Apple has been flagged by some investors in recent years as behind "behind" on AI as other tech giants spend far more to capitalize on opportunities in the AI era. But what if this is actually a strength?
A spending gap in the hundreds of billions
Apple's capital expenditures in fiscal 2025 (the period ended Sept. 27, 2025) totaled about $12.7 billion. Its mega-cap peers -- Microsoft, Alphabet, Meta Platforms, and Amazon -- combined to spend more than $400 billion on the same line item in calendar 2025.
And the gap is set to widen. Amazon alone expects its capital spending to reach about $200 billion this year -- about 16 times what Apple spent in its most recent fiscal year.
But this doesn't mean Apple is ignoring AI. The company is simply approaching it differently. At its developers conference on Monday, Apple unveiled its long-awaited Siri overhaul, powered by Alphabet's Gemini models under a partnership that reportedly costs about $1 billion per year, with the new software arriving this fall. Additionally, Apple's AI effort seems to run largely through its operating budget: research and development spending was $34.6 billion in fiscal 2025 -- nearly three times its capital expenditures -- and it climbed 33% year over year in the company's most recent quarter.
And while peers borrow to build, Apple keeps handing cash back to shareholders. Alongside its fiscal second-quarter results in April (the period ended March 28, 2026), the company announced a new $100 billion share repurchase authorization and raised its dividend 4%. The quarter itself was Apple's best March quarter ever, with revenue climbing 17% year over year to $111.2 billion and earnings per share jumping 22%.
"Our strong business performance during the March quarter generated over $28 billion in operating cash flow and drove new March quarter records for both operating cash flow and EPS," said Apple chief financial officer Kevan Parekh in the company's fiscal second-quarter earnings release.
In other words, the cash that rivals are pouring into data centers is, at Apple, still flowing to shareholders.
The case against patience
Of course, there's a less flattering version of this story.
Apple's revamped Siri runs on models built by a direct rival rather than on technology Apple owns. If AI assistants become the main way people interact with their devices, depending on Alphabet for that critical layer could prove costly. The rival, in effect, now sits inside the product Apple's customers talk to.
And the stakes are enormous. Apple's installed base has surpassed 2.5 billion active devices. That base is a key part of the company's moat -- and it's also what could erode if a competitor's assistant becomes the one consumers actually prefer.
What to watch
Investors should watch two things from here.
The first is how quickly users embrace the new Siri once it ships this fall. This could be revealed in any management commentary in the first quarterlyearnings callfollowing the release of Siri AI.
The second main factor to watch is whether iPhone and services momentum holds up in the upcoming quarterly reports. Sustained double-digit growth in both iPhone and services revenue would suggest customers are buying into Apple's AI strategy.
For now, I think the past week strengthens Apple's case.
Restraint can look like timidity when AI infrastructure stocks are soaring. But when the market starts questioning the spenders' debt loads and cash burn, that same restraint starts to look like discipline. Sure, Apple may still need to prove it can deliver great AI experiences. But isn't letting someone else shoulder hundreds of billions in spending -- while you keep the customer relationship -- the kind of position most businesses dream of?
Should you buy stock in Apple right now?
Before you buy stock in Apple, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Apple wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $433,268!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,259,391!*
Now, it’s worth noting Stock Advisor’s total average return is 935% — a market-crushing outperformance compared to 206% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of June 13, 2026.
Daniel Sparks and his clients have positions in Apple. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, and Oracle. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Apple Is Mostly Sitting Out the AI Spending Arms Race. With AI Stocks Selling Off, That Suddenly Looks Smart.

Many investors are buying shares of AI companies right now, and it's easy to see why. But there is a right and wrong way to set yourself up to benefit from the AI revolution, and in this video, Certified Financial Planner® Matt Frankel shares his framework.
*Stock prices used were the morning prices of June 11, 2026. The video was published on June 12, 2026.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Where to invest $1,000 right now
When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor’s total average return is 935%* — a market-crushing outperformance compared to 206% for the S&P 500.
They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor.
*Stock Advisor returns as of June 13, 2026.
Matt Frankel, CFP® has positions in Amazon and Digital Realty Trust. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Datadog, Digital Realty Trust, Micron Technology, Microsoft, Nvidia, and Snowflake. The Motley Fool has a disclosure policy.
Matthew Frankel is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

How to Invest in the AI Revolution Without Making Costly Mistakes

Key Points
C3.ai offers a suite of 40 ready-made applications to accelerate the adoption of artificial intelligence (AI) for enterprises.
A major disruption to the company's management team last year continues to impact sales.
C3.ai stock looks cheap at face value, but the company's shrinking revenue could lead to more downside for investors.
Artificial intelligence (AI) has already created trillions of dollars worth of value for investors, but not every stock in this space has been a winner. C3.ai (NYSE: AI), for instance, is down 21% so far in 2026, as investors digest the company's declining revenues and ballooning losses.
Last September, C3.ai founder Thomas Siebel stepped down from his role as chief executive officer (CEO) to deal with health issues. He played a pivotal role in attracting new customers and maintaining relationships with existing ones, so his departure led to a sharp decline in the company's sales.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
However, Siebel returned to the CEO role on May 8 and is laser-focused on getting C3.ai back on track, so should investors buy the stock while it's still trading in the red for 2026, or is more downside ahead?
Helping enterprises unlock the power of AI
Developing AI software from scratch requires billions of dollars' worth of data center infrastructure, and a significant amount of technical expertise. The average business simply doesn't have those resources, so many of them choose to work with third-parties like C3.ai instead.
C3.ai offers a portfolio of 40 ready-made AI applications that can be customized to suit the needs of enterprises in a variety of industries, accelerating their adoption of this revolutionary technology. As an example, oil and gas giant Shell uses C3.ai's apps to monitor thousands of items of equipment so it can conduct preventative maintenance and even predict failures, which minimizes downtime.
Retailers can also use apps like C3.ai Inventory Optimization, which analyzes variations in customer demand to ensure they are ordering precisely enough products, which limits waste. Banks and financial institutions can use the C3.ai Anti-Money Laundering app to identify suspicious transactions with greater accuracy than human-led processes.
Enterprises can access C3.ai's suite of apps through all major cloud providers, including Amazon Web Services, Microsoft Azure, and Alphabet's Google Cloud. This allows them to seamlessly integrate AI into their existing digital environments, and it means they can tap into the data center computing capacity on offer from their cloud provider to scale their usage as necessary.
C3.ai expects sales to continue declining
C3.ai generated $250.3 million in revenue during fiscal 2026 (ended April 30), which was a whopping 35% decline from the prior year. Stephen Ehikian, who served as CEO in Siebel's absence, initiated a complete restructure of the company to limit the damage from the sharp decline in sales.
Unfortunately, his efforts couldn't prevent a $470.4 million loss at the bottom line in fiscal 2026, which was 63% higher than the company's loss in fiscal 2025. With just $575.4 million in cash, equivalents, and marketable securities on hand at the end of the fiscal year, C3.ai simply can't afford another blowout loss in fiscal 2027, so it slashed roughly 35% of its workforce.
While this will reduce costs and stop some of the bleeding, it will also have negative implications for the company's ability to grow. As a result, management is forecasting revenue of between $210 million and $240 million in fiscal 2027, which would be a year-over-year decline even at the high end of the range.
C3.ai stock looks cheap, but that doesn't mean it's a buy
C3.ai stock currently trades at a price-to-sales (P/S) ratio of 6.1, which is below its five-year average of 10.5, so it looks like a good value from that perspective. But because the company's revenue is forecast to shrink in fiscal 2027, its forward P/S ratio is 6.9, so the stock actually looks more expensive when looking into the future.
This is precisely why most investors won't buy into a shrinking business -- it can actually get more expensive over time even if its stock price is falling. It's too early to say whether Siebel can turn C3.ai around over the long term, but all we know for sure is that investors will have to endure at least one more year of declining sales, which makes this a very tough investment.
In summary, a beaten-down stock isn't always a cheap stock. C3.ai will have to prove it can return to growth in a sustainable way before I would consider buying its stock.
Should you buy stock in C3.ai right now?
Before you buy stock in C3.ai, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and C3.ai wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $438,283!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,257,427!*
Now, it’s worth noting Stock Advisor’s total average return is 938% — a market-crushing outperformance compared to 206% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of June 13, 2026.
Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, and Microsoft. The Motley Fool recommends C3.ai. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Microsoft Corporation

Market sentiment

Bearish sentiment

Share of longs and shorts

Confidence Index

Bulls

Support Index

Bulls

Cash flows Index

Bulls

Momentum

Sell

Sell

Metrics since the start of the current trend:

Protective stop levels