Heavy AI Investment Positions Microsoft (MSFT) for Strong Growth Beyond 2026

Microsoft Corporation (NASDAQ:MSFT) is included among the 13 Top Tech Stocks Paying Consistent Dividends.

Microsoft Corporation (NASDAQ:MSFT) is making a massive push into artificial intelligence. In December 2025, the company announced plans to spend $17.5 billion on AI development in India, along with more than $5.4 billion in Canada over the next few years. Those commitments come on top of the already substantial investments Microsoft plans to make in the U.S. and other markets.

This level of spending is expected to translate into solid revenue and profit growth starting in 2026 and continuing beyond that. Over the next five years, Microsoft Corporation (NASDAQ:MSFT)’s expanding AI footprint could meaningfully reshape the long-term outlook for its stock.

AI is set to remain a major growth engine for the company. During its fiscal first quarter, the company poured nearly $35 billion into capital expenditures, the highest quarterly total in its history, as it positions itself to capture demand across AI infrastructure and services. Management has said capital spending will continue to rise in 2026, laying the groundwork for sustained growth in the years ahead.

AI is not the only opportunity on Microsoft Corporation (NASDAQ:MSFT)’s radar. The company also sees quantum computing as the next major catalyst for its cloud business. While still early, it represents a potentially enormous market over the long term.

Back in 2023, CEO Satya Nadella laid out an ambitious target to push Microsoft’s annual revenue beyond $500 billion by 2030. That would imply sales growth of nearly 80% from the more than $280 billion the company generated in fiscal 2025, underscoring just how central these long-term technology bets are to Microsoft’s strategy.

While we acknowledge the potential of MSFT as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.