Simply Wall St's AI Stocks screener names Microsoft its lead pick among three software names tied to the AI build out, citing Azure and Copilot revenue against a US$2.9t market cap. Tenable Holdings and ServiceNow round out the list, each carrying its own mix of growth and risk.
Microsoft tops a three-stock list of AI software names flagged by Simply Wall St's AI Stocks screener, which filters for companies tied directly to the build out in semiconductors, software, large language models and cloud. The screener frames Microsoft as sitting at the center of that shift, with Azure and Copilot turning heavy data center spending into AI services that large customers already pay for.
Why Microsoft leads
The case rests on scale and cash flow. Microsoft carries a US$2.9t market cap, and the screener notes it generates about US$135.3b from Productivity and Business Processes, US$128.4b from Intelligent Cloud, and US$54.6b from More Personal Computing. Revenue splits broadly between the United States at US$162.8b and other countries at US$155.4b.
Simply Wall St argues the stock trades on a lower P/E than many software peers despite high earnings quality and robust free cash flow. Against that, it flags large capital expenditures, regulatory scrutiny around cloud and licensing practices, and recent insider selling as risks investors may weigh against the AI strategy.
Two more names on the list
Tenable Holdings, a cybersecurity company, appears with a US$4.6b market cap and guidance pointing to over US$1.0b in annual revenue, alongside a swing from prior losses to modest net income and buybacks that reduce the share count. The screener also flags reliance on federal contracts, higher debt funding and competition from larger platforms as open questions.
ServiceNow completes the trio with a US$112.2b market cap and about US$14.0b in revenue from Internet Software and Services. Simply Wall St notes the stock has underperformed the software sector recently and trades below some fair value estimates, while new AI partnerships with IBM, Accenture and Hitachi keep its monetization story unfolding.
Source: Simply Wall St
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