Which Shares to Buy Now? Why Microsoft and Alphabet Lead the AI Investment Race

With $2,000 to invest, you don’t need to chase high-risk opportunities. Instead, focus on acquiring shares in market-leading companies with proven business models and genuine AI-driven growth prospects. Two candidates stand out: Microsoft and Alphabet—both have positioned themselves at the forefront of artificial intelligence innovation while maintaining enormous user bases and generating substantial profits.

These companies serve billions globally and reinvest their earnings into AI capabilities that strengthen their competitive positions. Let’s examine why these particular shares represent compelling additions to a long-term investment portfolio.

The AI Advantage: Why These Companies Matter for Your Portfolio

The artificial intelligence revolution isn’t theoretical—it’s already reshaping how these tech giants generate revenue. Both Microsoft and Alphabet have moved beyond experimental AI to deploying systems that measurably impact their bottom lines.

Microsoft now has 900 million users engaging with AI features across its product suite. The company’s Copilot AI assistant has reached 150 million monthly active users, creating a clear demand signal. Crucially, this adoption is translating into higher revenue per user as customers willingly spend more for advanced AI capabilities.

Similarly, Alphabet’s integration of AI across its Search platform has intensified user engagement. More queries mean more advertising opportunities. The digital advertising market itself is expected to roughly double to $1.1 trillion by 2030, according to market analysis. Companies controlling the platforms where ads appear—and optimizing ad relevance through AI—are positioned to capture enormous value.

Microsoft: Copilot’s Impact on Profitability and User Value

Microsoft exemplifies how AI adoption converts into financial returns. Its Microsoft 365 productivity suite—enhanced with Copilot functionality—reported 17% year-over-year revenue growth in the most recent quarter. This isn’t just volume growth; it reflects customers paying premium prices for AI-enhanced tools.

The revenue-per-user increase matters significantly for shareholders. It suggests the company can continue extracting more value from its existing customer base without necessarily acquiring new users. As AI features become more sophisticated, this pricing power should expand.

Beyond productivity software, Microsoft’s Azure cloud division sits on an impressive $400 billion in future commitments. The company is investing aggressively in AI infrastructure to meet demand, but these expenditures should eventually drive profitability gains as the infrastructure becomes fully utilized.

Over the past five years, Microsoft’s net income has nearly doubled to $105 billion—demonstrating that the company’s investments in AI haven’t cannibalized profitability but instead supported expansion.

Alphabet: Scaling AI Across the World’s Largest Ad Network

Alphabet operates from a different but equally compelling position. With 2 billion users across Search, Gmail, and YouTube, the company controls massive advertising real estate. Its AI improvements have made ads more relevant and timely, driving advertiser spending.

Search and YouTube advertising revenue climbed 14% year-over-year in Q3 2025, compared to 12% growth in the prior-year quarter and 11% in Q3 2023. This accelerating trend shows that AI-driven optimization isn’t a one-time boost but a persistent advantage.

The company’s net income has more than doubled to $124 billion over the past three years, reflecting both advertising growth and operational efficiency. While ad spending can contract during economic downturns—as occurred in 2022—the structural growth in digital advertising and Alphabet’s AI capabilities position it to capture disproportionate share gains.

Long-Term Growth Prospects and Market Positioning

Both companies share critical advantages: massive existing customer bases, the financial resources to invest heavily in AI, and business models where AI improvements directly enhance profitability and customer value.

Microsoft’s software licensing model and enterprise cloud positioning create recurring revenue streams that compound over time. Alphabet’s dominance in digital advertising—combined with improving AI ad targeting—creates similar compounding dynamics in a market expected to double within five years.

Neither company is gambling on speculative AI applications. Both are deploying AI where it directly impacts revenue and profit margins. This translates to lower execution risk compared to companies attempting to create entirely new AI-driven business lines.

The Investment Decision: Weighing Your Options

Before allocating $2,000, consider your investment philosophy. If you believe in holding market-leading companies with proven AI integration and global reach, these shares merit consideration. Both Microsoft and Alphabet have demonstrated the ability to convert technological innovation into shareholder returns.

The historical precedent matters here—companies identified as industry leaders during technology transitions have often rewarded patient investors substantially. Netflix, for instance, was identified as a compelling buy in 2004 at $1,000 invested; that position would have grown to $462,174. Nvidia, recommended in 2005, similarly transformed a $1,000 investment into $1,143,099.

The exact future cannot be predicted, but structural advantages matter. Microsoft and Alphabet’s AI investments are already visible in their financial results. As both companies mature their AI capabilities, their competitive moats should widen, potentially supporting continued outperformance.

Your choice between these shares—or whether to divide your $2,000 between them—depends on your specific risk tolerance and investment timeline. What remains clear is that both represent the type of market-leading businesses that typically create wealth over extended holding periods.