Key Points
Microsoft is seeing explosive growth in commercial usage of its AI tools.
Visa is investing in the future of commerce and showing promising early results.
Three years into this bull market run, the S&P 500 is still hovering close to new highs. But some top stocks have sold off recently, offering the chance to buy them at attractive valuations. These are still outstanding businesses trading at appealing valuations.
If you've got extra cash to commit to a long-term investment strategy, Microsoft(NASDAQ: MSFT) and Visa(NYSE: V) look like compelling buys right now. Both slipped year to date, but neither company is taking its foot off the gas. Each is pushing deeper into the biggest opportunities in its industry.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Here's why these two blue chip leaders could be smart buys on the dip.
Image source: Getty Images.
Microsoft
Shares of Microsoft are trading 28% from their previous high, making it a top growth stock to consider buying right now. The software giant has benefited from integrating artificial intelligence (AI) tools across its services, including the Azure enterprise cloud platform, Microsoft 365, and Copilot.
The stock's dip reflects concerns that agentic AI tools could intensify competition. However, Microsoft has built decades-long relationships with its customers because of the security and reliability it provides.
In the recent quarter, revenue from Microsoft Cloud, including Microsoft 365 commercial, Azure, and other services, grew 26% year over year to $51 billion. Microsoft says its AI business is already larger than some of its most widely used products that took decades to grow.
Another important sign that investors are underestimating Microsoft's competitive strength is the growth in its productivity software suite. It reported a 160% increase in the number of licensed users (seats) using Microsoft 365 Copilot last quarter.
The stock's 23 forward price-to-earnings (P/E) ratio is relatively attractive. This is as cheap as the shares have been since the bottom of the 2022 bear market.
Visa
Investing in a top credit card brand like Visa is almost like getting a royalty on millions of transactions that occur in the global economy every day. Visa benefits from high margins on the recurring fees it earns from the huge volume of payments across its network.
The stock is down 18% from its previous high, which could be discounting Visa's competitive edge despite its latest results. Revenue grew 15% year over year last quarter, while payment volume rose 8% and processed transactions increased 9%.
Visa's moat is built on its infrastructure and scale. Its network links roughly 175 million merchants, enabling the company to securely and efficiently process more than 31 billion credit card transactions each quarter.
One area where investors could be underestimating Visa is stablecoins -- a market expected to exceed $2 trillion by 2028, according to Morgan Stanley. Visa is positioning itself to serve as the bridge between fiat money and stablecoins, according to research from The Motley Fool. Visa reported that its stablecoin settlement volume reached an annualized run rate of $4.6 billion last quarter, indicating an emerging growth opportunity.
Investors will need to keep an eye on how AI reshapes software and payments, but the capabilities of the category leaders like Microsoft and Visa may be greatly underestimated. With a forward P/E of 24, Visa shares look like a compelling buy right now.
Should you buy stock in Microsoft right now?
Before you buy stock in Microsoft, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Microsoft wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $508,877!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,115,328!*
Now, it’s worth noting Stock Advisor’s total average return is 936% — a market-crushing outperformance compared to 189% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of March 19, 2026.
John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft and Visa. The Motley Fool has a disclosure policy.
