r/valueinvesting
If I had to pick one AI stock to hold for the next 10 years, I’d still lean Microsoft over Nvidia
Author prefers MSFT over NVDA for a 10-year hold due to diversified AI exposure, dividend history, and lower valuation risk.
- MSFT offers a safer long-term hold with diversified AI exposure and a reliable dividend history.
- NVDA's valuation already prices in perfection, and it lacks the business diversification and dividend history of MSFT.
Maybe this is boring, but if I had to choose between Microsoft and Nvidia for the next decade, I’d still lean Microsoft here.
Nvidia obviously has the bigger upside if the AI buildout keeps going full speed, but it also feels like the market already knows that and has priced in a lot of perfection. Microsoft just feels like the easier long-term hold to me. You still get major AI exposure through Azure, OpenAI, Copilot, enterprise software, etc., but with a much more diversified business and way less dependence on one trade staying red hot forever.
Also if we’re even talking about this from a dividend angle, I don’t really see Nvidia as a dividend stock at all. Microsoft actually has a real history of returning cash to shareholders, while Nvidia is still mostly a growth story.
Not saying Nvidia can’t outperform from here, because it definitely can. I just think if the question is “which one would I feel more comfortable holding through multiple cycles without overthinking it,” my answer is Microsoft.
Curious where everyone else stands on this one.
"0 returns"?
Msft earnings vs Msft stock price action are disconnected. The beat most quarters and get punished.
MSFT biggest problem is that it has almost no sex appeal.
Yep, it has no interesting storylines and a boring brand. It's not the AI god like Nvidia, it doesn't have cool shit FSD or space asteroids, there's no "insatiable demand" for office/windows like memory and NAND. It doesn't have the cool iPhone. It's saddle with software AI which is in the toilet too.
It's a good boring company among many and doesn't stand out. It's the Exxon, Coke, or Bank of America of tech.
That's why it has to pay for Russian prostitutes. Oh wait sorry... That's the founder.
Right! It's the boring company that everyone is kinda annoyed at (because Windows and Copilot is so inefficient). And people associate it with Bill Gates whose reputation has really tanked recently.
Hmmm yeah no. I would pick the one who is making tons of money off of A.I vs the one that is destroying 100s of Billions chasing it.
People underestimate this so much. Compliance headaches and liability are major factors when a company considers a move like that. The default option is usually not to change.
Google is probably the one I’d put closest to Microsoft in a bucket, especially at its current valuation. And yeah, there’s a decent chance the biggest AI winner a decade from now isn’t one of today’s obvious names at all. My only hesitation is that if I’m choosing from the current mega caps, I still trust Microsoft’s position inside enterprise workflows a bit more.
that's a good point - most of the money to be made might be in the enterprise space and msft is dominant there. perhaps they build agents/agentic workflows that will replace all of us (just kidding, i hope).
VOO
If you waited 4-5 years and it suddenly doubles on year 5 then you will have outperformed the average S&P 500 return btw
I am dying seeing your comments about MSFT on every subreddit lol
And who says demand will ever be met? Technology evolves and their product will always be needed. Are there stocks that will provide better returns going forward? Most likely sure. Is nvidia a bad buy? In no way shape or form.
Of course, I just wanted to throw in the exception to the rule. I am not arguing. I still like Microsoft, but I do see the point about bad products.
But I also see it with Adobe and I am invested in that for a few weeks now. But that is a whole other story.
And if it tripled over 10 years while it trades sideways for a long long time (while earnings and FCF continuously improve) then you’d still outperform the benchmark lolll
Few people have the patience for that except Mr. Buffett and the late Mr. Munger unfortunately. And absolutely not on Reddit
An in 10 years MSFT bag holders will be saying the same thing that MSFT is such a value play. If you’re actually concerned about getting $9 every quarter from your 10 shares, good luck with that!
Even with the market pullback today, NVDA up 40% yty. MSFT is up 44% over the last 5 years, -22% yty but hey you got your dividends to offset your losses!