Artificial intelligence is not only no longer a futuristic concept, but the main event of the biggest tech investment spree in the history of the world, with billions being spent on building data centers, procuring graphics processing units, and developing AI models. The excitement surrounding this AI investment mania is not only evident in the stock market, as the valuations of many tech companies are seeing exponential growth, with the excitement of AI profits bringing more people on board. The only underlying question during this investment mania in the hope of AI investment and stocks is how many of them are worth this excitement and how many are mere investment hype?
Although the stocks of all AI companies appear to be overpriced and risky, there are two stocks of companies which appear to be more balanced and reasonable, namely Microsoft and Oracle. Their strength does not lie in their promises, but rather in their revenues and infrastructure.
The Reality Behind Massive AI Spending
The new era of AI investments is fueled by competition. The technology giants are eager to design faster, smarter, and more powerful AI systems. This has resulted in massive investments in:
Data Centers and Cloud Infrastructure
Advanced chips by NVIDIA
Energy and cooling systems
AI Model Training and Deployment
This AI Capex Splurge is necessary, but with risks involved. Anyone can spend money. Anyone can make profits only when they know how to spend money.
Many companies are investing heavily, but the returns on these investments are unclear. There is speculation on future growth, but future growth is unknown.
Why Many AI Stocks Look Overvalued
A part of the major problems in the market today is the fact that asset values are driven by expectation, not earnings.
Companies such as Amazon and Google are increasing their investments significantly, though their returns on investments in AI are still in the making. The investment amounts are huge, though returns are long in coming.
This creates three major risks:
Delayed profitability: AI infrastructure requires several years for profitability
High degree of competition: Many firms are developing comparable AI technologies
Investor optimism: Stock prices may represent perfect future outcomes
Should growth slow even slightly, overpriced stocks can drop sharply.
This is why investors are increasingly searching for firms that incorporate AI leadership and predictability in revenue.
Why Microsoft Has a Unique Advantage
Microsoft, being one of the strongest players in this ecosystem, does not derive its strength from technology but rather its business model.
One of the smartest decisions Microsoft made was entering into a partnership with OpenAI. This helped Microsoft to incorporate cutting-edge AI technology into their actual business offerings. This includes:
Azure cloud services
Office Productivity Tools
Enterprise software
Developer platforms
This strategy gives Microsoft three key strengths:
1. Monetization Immediately
Microsoft isn't waiting for future profits. It is already earning revenue by adding AI features to existing products.
2. Stronger cloud foundation
Azure is one of the world's largest cloud platforms. AI demand increases directly Azure usage, thus boosting revenue.
3. Trust and relationships in business
Businesses are already running Microsoft. Adding artificial intelligence would not be a cutting-edge experiment; rather, it was an extremely natural extension.
Because of this, Microsoft's AI growth is backed by real customer demand, not speculation.
Why Oracle Is Quietly Becoming an AI Winner
But Oracle seems to keep a much lower profile compared with other tech giants, although that certainly does not mean the company's position in AI infrastructure is anything but strengthening.
The Oracle Cloud Infrastructure is Oracle's cloud platform and it is designed for high-performance workloads. So, OCI stands perfectly for the training and deployment of AI.
The key benefits of Oracle are:
1. Affordable infrastructure
Oracle offers competitive pricing compared to other cloud providers, therefore attracting companies looking to reduce AI costs.
2. Focus on enterprise customers
Oracle has had long-standing relationships with large corporations. Now, these customers are adopting AI through Oracle's cloud.
3. Rapid growth in cloud revenues
Oracle's cloud business is growing faster than expected, driven by AI demand.
4. Strategic positioning as an infrastructure provider
Instead of competing in consumer AI products, Oracle focuses on selling the backbone that powers AI systems.
That infrastructural approach minimizes risks and allows for better stability in the longer run.
The Power of Selling Tools Instead of Predictions
One key difference between Microsoft, Oracle, and many other AI companies is their role in the ecosystem.
They are not just building AI models—they are selling the infrastructure that powers AI.
This is similar to selling tools during a gold rush. Regardless of who finds gold, tool sellers make consistent money.
Their revenue comes from:
Cloud computing usage
Enterprise subscriptions
Infrastructure services
Software integration
This makes their business models more stable and predictable.
Key Reasons Microsoft and Oracle Are Reasonably Valued
Here are the main factors that make these companies stand out:
Strong existing revenue streams – They do not depend only on future AI profits
Enterprise customer base – Stable and long-term customers
Cloud infrastructure leadership – AI demand directly increases cloud usage
Proven business models – Not experimental or untested
Balanced spending and returns – Investment is supported by revenue growth
Lower speculation risk – Valuations are supported by actual earnings
This combination creates a safer investment profile compared to companies driven purely by hype.
Risks Investors Should Still Watch
Even strong companies face challenges. Some risks include:
Rising infrastructure costs
Competition from other cloud providers
Slower-than-expected AI adoption
Economic slowdowns affecting enterprise spending
However, Microsoft and Oracle are better positioned to manage these risks due to their scale and diversification.
The Long-Term Outlook for AI Infrastructure Leaders
The current AI Capex Splurge will continue for several years. Companies will keep investing in infrastructure, cloud, and AI tools.
But over time, investors will focus less on hype and more on profitability.
Companies that generate real revenue from AI—not just promises—will emerge as long-term winners.
Microsoft and Oracle are already showing this path. Their strength comes from:
Real customers
Real revenue
Real infrastructure
Real demand
This makes them more resilient compared to companies relying on uncertain future breakthroughs.
Conclusion: Stability Matters More Than Hype
The AI revolution is real, but not every company will benefit equally. Many stocks have risen based on expectations rather than performance.
Microsoft and Oracle stand apart because they are building the foundation of AI, not just chasing headlines.
Their cloud platforms, enterprise relationships, and proven business models give them a strong advantage.
In an era of massive spending and uncertainty, reasonably valued companies with real earnings provide the safest path forward.
As the AI market matures, stability, infrastructure, and profitability—not hype—will determine the true winners.
FAQs
1. Why are Microsoft and Oracle considered reasonably valued in the AI era?
Because they generate real revenue from AI through cloud services and enterprise software, rather than relying only on future expectations.
2. What makes cloud infrastructure important for AI growth?
AI systems require massive computing power, storage, and processing. Cloud providers like Microsoft and Oracle supply this essential infrastructure.
3. Why are some AI companies considered overvalued?
Their stock prices are based on future hopes rather than current earnings, making them riskier investments.
4. How does Microsoft's partnership with OpenAI help its growth?
It allows Microsoft to integrate advanced AI into its products, increasing demand for its cloud and software services.
5. Is Oracle a strong long-term player in AI?
Yes. Oracle’s focus on enterprise cloud infrastructure positions it well to benefit from increasing AI demand.