"But amid these gains, some major AI players -- even some that have seen their shares climb -- remain at reasonable valuations. Four of the following players trade for between 26x and 31x forward earnings estimates, representing fair prices to pay for these established players with strong AI prospects. The fifth company isn't yet profitable, so this valuation measure doesn't apply -- but Wall Street expects this stock to climb more than 55% over the coming 12 months,"
"The company generates revenue thanks to many offerings, from software subscriptions to cloud services. And speaking of cloud, that business is going strong these days amid surging demand from AI customers. In the recent quarterly earnings report, cloud services revenue jumped 40%, and chief executive Satya Nadella said Microsoft would continue to boost AI investments "to meet the massive opportunity ahead.""
AI stocks have surged, prompting bubble concerns, yet some major AI players still trade at reasonable valuations. Four companies measure between 26x and 31x forward earnings, while a fifth remains unprofitable but carries Wall Street growth expectations exceeding 55% over the coming year. Microsoft trades at about 29x forward earnings, generates revenue from software subscriptions and cloud services, and reported 40% cloud revenue growth amid rising AI demand. Microsoft plans continued AI investment to capture opportunities. Meta Platforms is identified as a social media giant with substantial advertising revenue from apps like Facebook and Instagram.
Read at The Motley Fool
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