MSFT vs. ORCL: Which AI Software Stock is a Better Buy?

The thunderous rally in artificial intelligence (AI) stocks has been hard to miss. As OpenAI's ChatGPT gained mainstream acceptance, investors have made a beeline for stocks with exposure to the booming AI market. As one of the primary drivers of the overall market action for the better part of the last two years, it's fair to say that AI has well and truly arrived, with the investing theme firmly entrenched in the minds and portfolios of most market participants.

But with the AI market, valued at about $621 billion in 2024, projected to clock a CAGR of 20.4% between now and 2032 to reach a staggering size of $2.7 trillion, this trend still seems to be in its early innings. To best leverage the expected long-term growth in AI, investors should be wary of deploying their capital into the stocks of dubious companies that are “AI pretenders” rather than real innovators working on and benefiting from the technology, as the obvious parallels to the dot-com bubble around the turn of the millennium cannot be missed.