Got $1,000? 2 Growth Stocks Building the Software Backbone of Artificial Intelligence.
2026-10-02 08:30
•Chris Neiger •The Motley Fool
••••• •••••••• Axe Cap view
AI’s Software Backbone: Why the Rand’s Tech Champs Matter
Microsoft and Alphabet’s AI gains highlight global tech trends, but SA investors should watch Naspers and Prosus closely.
Microsoft and Alphabet are running ahead in AI’s race, with their software deeply embedded in corporations worldwide. $100 billion Azure AI run rate and Gemini AI’s near-ubiquity among Fortune 100 firms tell you these giants are not just tech darlings but real business engines. What’s interesting for South African investors is the indirect path these trends create. Naspers and Prosus remain South Africa’s main exposure to this AI wave through their massive stakes in global platforms. With the rand’s sensitivity to USD strength, the USD/ZAR remains a key barometer. If Microsoft and Alphabet keep delivering, money flows could support a stronger rand via tech sector gains, but currency volatility is a wild card. This keeps local tech heavyweights on the radar, especially when valuations stay reasonable compared to other sectors. The main risk? A global tech sell-off or regulatory clampdown could reset enthusiasm fast on these giants, dragging Prosus and Naspers down with them. this is just our opinion and not financial advice
Buy Naspers and Prosus as a play on global AI momentum, but keep an eye on USD/ZAR; trim exposure if the rand weakens beyond 19/USD due to global risk-off.
- Naspers
- Prosus
- USD/ZAR
- Global tech regulatory risks
- USD strength causing rand depreciation
6/10
Microsoft and Alphabet are positioned as leading AI software companies capitalizing on the expected $1.3 trillion in AI infrastructure spending. Microsoft's Copilot has 30 million paid subscribers and Azure AI reached a $100 billion annual run rate, while Alphabet's Gemini is used by 90% of Fortune 100 companies and generates revenue through enterprise software and Apple licensing. Both stocks trade at valuations below the tech sector average, presenting attractive investment opportunities.
Our take is based on reporting first published by The Motley Fool.
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