3 Stocks Benefiting from the Rise of Machine Learning

As businesses and individuals continue to explore AI’s full potential, machine learning (ML), an essential component of AI, is evolving even faster. Machine learning enables computers to mimic human learning by analyzing data, identifying patterns, and improving decision-making without human intervention.

The global machine learning market is expected to surge from $68.88 billion in 2024 to $94.35 billion in 2025, growing at a CAGR of 37%. Given this explosive growth, companies with strong exposure to machine learning, such as Microsoft Corporation (MSFT), Accenture plc (ACN), and UiPath Inc. (PATH), are poised to benefit significantly.

Machine learning is rapidly transforming industries, from healthcare and finance to security and retail. Businesses are leveraging its predictive capabilities to optimize operations, enhance decision-making, and drive innovation. In healthcare, for instance, machine learning is revolutionizing drug discovery, improving diagnostics, and enabling faster data collection through wearable devices.

As AI adoption accelerates, the machine learning market is projected to expand even further, reaching $329.8 billion by 2029 at a CAGR of 36.7%. This growth will be driven by increasing data volumes, advancements in edge computing, and the rising demand for predictive analytics across industries.

Considering these conducive trends, let’s examine the fundamental aspects of the featured stocks in detail:

Microsoft Corporation (MSFT)

MSFT is a technology company that develops and supports software, services, devices, and solutions worldwide. The company operates through three segments: Productivity and Business Processes; Intelligent Cloud; and More Personal Computing.

Last year, in November, MSFT announced an expanded partnership with C3.ai, Inc. (AI) to accelerate the adoption of Enterprise AI on Microsoft Azure. This collaboration enhances their relationship by integrating C3 AI’s advanced application software, including C3 Generative AI, with Azure’s powerful cloud ecosystem.

Under this, MSFT became the preferred cloud provider for C3 AI solutions, while AI is now a top AI application provider on Azure. The alliance focuses on innovation, integration, and joint efforts in marketing, sales, and support to drive Enterprise AI adoption across industries, benefiting customers and stakeholders.

MSFT’s trailing-12-month levered FCF margin of 19.85% is 70.8% higher than the industry average of 11.62%. Likewise, its trailing-12-month net income margin and ROCE of 35.43% and 34.29% are considerably above their respective industry averages of 4.07% and 4.61%.

For the second quarter of 2025, which ended on December 31, 2024, MSFT’s total revenue increased 12.2% year-over-year to $69.63 billion. The company reported an operating income of $31.65 billion, indicating a 17.1% growth from the prior-year quarter. In addition, its net income amounted to $24.11 billion or $3.23 per share, reflecting an increase of 10.2% year-over-year.

The consensus revenue estimate of $68.46 billion for the fiscal third quarter (ended March 2025) represents a 10.7% increase year-over-year. The consensus EPS estimate of $3.21 for the same quarter indicates a 9.2% improvement year-over-year. The company has an excellent surprise history; it surpassed the consensus revenue and EPS estimates in each of the trailing four quarters.

The stock has gained 3.5% over the past six months to close the last trading session at $412.22.

MSFT’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of B, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

MSFT has a B grade for Stability, Sentiment, and Quality. It is ranked #11 out of 41 stocks in the B-rated Software – Business industry. Click here to see the additional ratings for MSFT (Growth, Value, and Momentum).

Accenture plc (ACN)

Headquartered in Dublin, Ireland, ACN provides strategy and consulting, industry X, song, and technology and operation services internationally. It offers systems integration and application management, security, intelligent platform, infrastructure, software engineering, data and AI, and automation services.

On February 7, 2025, the company announced the acquisition of Staufen AG, a Germany-based management consulting firm, along with its subsidiaries. This strategic move enhances ACN’s expertise in operational excellence and supply chain competitiveness, particularly benefiting clients in discrete manufacturing sectors such as automotive, aerospace and defense, industrial goods, and medical equipment.

On January 23, ACN and BCC Iccrea Group, Italy’s largest cooperative banking group, signed a partnership agreement to support the Group’s IT transformation within the framework of the broader IT reinvention plan devised by BCC Sistemi Informatici. The partnership will result in accelerated transformation and provide improved levels of service.

ACN’s trailing-12-month EBITDA margin of 17.12% is 66.4% higher than the industry average of 10.29%. Likewise, the stock’s trailing-12-month net income margin and ROCE of 11.41% and 27.10% are considerably higher than their respective industry averages of 4.07% and 4.61%.

During the first quarter that ended November 30, 2024, ACN’s revenues increased 9% year-over-year to $17.69 million. Its operating income rose 14.9% from the year-ago value to $2.95 billion. The company’s net income and EPS of $2.32 billion and $3.59 indicate growth of 15.2% and 15.8% from the previous year’s quarter, respectively.

Street expects ACN’s EPS for the second quarter (ending February 2025) to increase 1.8% year-over-year to $2.82. Its revenue for the ongoing quarter is expected to grow 5.4% year-over-year to $16.64 billion. It surpassed the consensus EPS estimates in each of the trailing four quarters, which is impressive.

Shares of ACN have surged 24.5% over the past nine months to close the last trading session at $386.89.

It’s no surprise that ACN has an overall rating of B, equating to a Buy in our POWR Ratings system. It also has a B grade for Momentum, Stability, Sentiment, and Quality. It is ranked #3 out of nine stocks in the A-rated Outsourcing - Tech Services industry.

Beyond what is stated above, we’ve also rated ACN for Growth and Value. Get all ACN ratings  here.

UiPath Inc. (PATH)

PATH is an enterprise automation and artificial intelligence (AI) software company that provides an end-to-end automation platform that offers a variety of international robotic process automation (RPA) solutions.

On October 22, 2024, PATH announced a strategic partnership with Inflection AI to integrate the UiPath Platform™ with the new Inflection for Enterprise solution, allowing enterprises to achieve greater levels of operational efficiency and effectiveness without compromising trust and AI security options. This partnership strengthens PATH’s position in enterprise automation, expanding its reach and potential adoption among major corporations.

The stock’s trailing-12-month gross profit margin of 83.38% is 66.2% higher than the industry average of 50.16%. Similarly, its trailing-12-month levered FCF of 31.21% is 168.6% above the industry average of 11.62%.

PATH’s revenues for the third quarter (ended October 31, 2024) increased 8.8% year-over-year to $354.65 million. It reported a non-GAAP gross profit of $300.36 million, indicating a 5.7% growth from the prior-year quarter.

The company’s non-GAAP operating income came in at $49.72 million, up 13.8% year-over-year, while its non-GAAP net income for the quarter amounted to $59.81 million or $0.11 per share. Also, its non-GAAP adjusted free cash flow increased 12.2% year-over-year, amounting to $182.87 million.

Analysts expect PATH’s revenue for the fourth quarter (ending January 2025) to increase 4.9% year-over-year to $425.45 million. The company’s revenue for the fiscal year 2026 is expected to grow 10.7% year-over-year to $1.58 billion. Moreover, the company topped the consensus revenue estimates in each of the trailing four quarters.

Over the past six months, the stock has gained 32.4%, closing the last trading session at $14.23.

PATH’s POWR Ratings reflect its promising outlook. The stock has an overall rating of B, which equates to Buy in our proprietary rating system.

PATH has a B grade for Growth, Value, and Quality. It is ranked #8 out of 18 stocks in the A-rated Software - SAAS industry. Click here to access the other PATH ratings for Momentum, Stability, and Sentiment.

What To Do Next?

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MSFT shares . Year-to-date, MSFT has declined -2.20%, versus a 3.20% rise in the benchmark S&P 500 index during the same period.

Shweta's profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions.

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