Microsoft Seen as Top Winner in AI Spending, Says Morgan Stanley

This article first appeared on GuruFocus.

Microsoft (MSFT, Financials) remains the standout winner from the surge in artificial intelligence investment, according to Morgan Stanley’s latest CIO survey.

The firm said Microsoft is the clearest beneficiary of GenAI spend, with 33% of technology leaders expecting the company to capture the largest share of AI budgets next year more than twice the next closest competitor. In the next three years, that number will go up to 37%.

Analysts said that Microsoft’s strong position was due to its wide range of AI integrations, large software ecosystem, and growing cloud infrastructure.. The report said Azure continues to lead in cloud growth, with CIOs naming it the fastest-growing hyperscaler for 2025.

Morgan Stanley reiterated its Overweight rating and kept Microsoft as its Top Pick in large-cap software, noting that despite the rally, the stock still trades at a discount to peers.

The firm added that Microsoft’s scale, customer reach, and product depth give it a longer runway for growth and stronger long-term economics.