Why Microsoft and Meta Are the Most Attractive Long-Term AI Stocks to Buy in 2026

Microsoft: AI-Driven Cloud Supremacy and OpenAI Synergy

Microsoft's Azure cloud platform has become the bedrock of its AI ambitions. In Q2 2025, Azure revenue surged 39% year-over-year, surpassing $75 billion in annual sales, driven by AI infrastructure demand. The partnership with OpenAI, now formalized in a landmark October 2025 agreement, has been pivotal. OpenAI alone contributed 18–22% of Azure's revenue in H1 2025, with the company committing to an incremental $250 billion in Azure services. This partnership not only solidifies Microsoft's cloud leadership but also positions it as the exclusive host of OpenAI's frontier models until the development of Artificial General Intelligence (AGI).

Microsoft's 27% stake in OpenAI Group PBC-valued at $135 billion on an as-converted basis-further cements its strategic edge. By controlling Azure's API exclusivity and IP rights, Microsoft ensures a steady revenue stream while maintaining influence over OpenAI's model roadmap. Additionally, Microsoft's diversification of AI partnerships, including a 30 billion cloud compute deal with Anthropic, reduces dependency on a single AI provider and expands Azure's ecosystem. With Azure growing at a 40% year-over-year rate in Q1 2026, Microsoft's cloud and AI segments are outpacing the broader cloud market's 16.8% CAGR, making it a compelling long-term play.

Meta: AI-Powered User Engagement and Ad Revenue Surge

Meta's AI strategy is centered on maximizing user engagement and ad monetization. In September 2025, its Family Daily Active People (DAP) reached 3.54 billion, an 8% year-over-year increase, driven by AI-enhanced recommendation algorithms and immersive content on platforms like Instagram Reels. This growth translated into a 26% year-over-year ad revenue jump to $51.24 billion in Q3 2025, with ad impressions and average price per ad rising 14% and 10%, respectively.

Meta's Advantage+ suite of AI-powered ad tools has become a revenue engine, generating an annual run rate of $60 billion. The company's aggressive AI investments, including the creation of "Meta Superintelligence Labs," aim to automate ad creation entirely by 2026. While this promises efficiency, it also raises concerns about creative homogenization. However, Meta's ability to balance AI-driven scale with brand differentiation will determine its long-term success. For now, its ad business remains robust, with 20% quarter-over-quarter growth in advertisers using AI video-generation tools.

Contrasting AI Strategies and Market Valuations

While both companies are AI leaders, their approaches differ. Microsoft's strength lies in cloud infrastructure and exclusive AI partnerships, whereas Meta focuses on AI-driven user engagement and ad optimization. The AI industry as a whole is growing at a 36% CAGR, but Microsoft's Azure and AI services are outpacing this rate, supported by its $2 trillion total addressable market (TAM). Meta, meanwhile, faces rising AI costs and margin pressures, yet its ad revenue momentum remains strong.

Valuation metrics also highlight their appeal. Microsoft trades at a forward earnings multiple of 37.49x, while Meta's elevated multiple reflects its AI-driven growth potential. Both companies are outperforming the broader AI sector's average valuation, justified by their ability to monetize AI at scale.

Conclusion: A Dual-Pronged AI Investment Case

For investors seeking long-term exposure to the AI revolution, Microsoft and Meta offer complementary strengths. Microsoft's cloud dominance and OpenAI synergy ensure a steady pipeline of AI-driven revenue, while Meta's AI-powered ad ecosystem capitalizes on its massive user base. As the AI market expands, these companies are uniquely positioned to capture value, making them the most attractive AI stocks to buy in 2026.