Microsoft vs. Amazon: Which AI Stock Is the Better Buy?

Key Points

• Amazon has outperformed Microsoft and other top artificial intelligence (AI) stocks year to date.

• Only 3% of Microsoft’s commercial Office customers are paying for Copilot AI licenses.

• Amazon recently reported a $15 billion annual revenue run rate for its AWS AI services.

Not every artificial intelligence (AI) stock is a long-term winner. During the past five years, Amazon (NASDAQ: AMZN) and Microsoft (NASDAQ: MSFT) have both underperformed the S&P 500 (SNPINDEX: ^GSPC). Amazon gained 52% and Microsoft rose 68%, while the S&P 500 increased 71% during that timeframe.

And if you look at more recent performance, these two AI stocks are heading in different directions. Microsoft shares have declined about 12% year to date, while Amazon has gained 14%. Amazon has also outperformed other leading AI stocks like Nvidia and Alphabet so far this year.

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