Many retirees may not want to bother with investing in artificial intelligence (AI) stocks due to their high valuations and the long-term uncertainty that comes with them. But there are ways to gain exposure to this promising growth opportunity without taking on significant risk.
A great example is Microsoft (MSFT +0.63%). The tech giant has been around for decades and has a fantastic track record for growth. Its Copilot assistant may not be all that popular, but the company has many different ways that AI can add value to enhance its existing products and services.
While many investors have clearly been looking past Microsoft's stock this year (it's down 25%), here's why it can be a great option if you're a retiree or simply want to keep your risk low while investing in AI.
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Microsoft's well-rounded business provides long-term stability
A key reason Microsoft is a safer tech stock to own than others is due to its diversification. Between gaming, cloud computing, office software, devices, and other segments, there are many ways it can leverage AI to add value for its customers. And what's encouraging is that many of its business segments generated double-digit growth in the company's most recent quarter, which covered the last three months of 2025.
About 20% of the company's revenue comes from products, while 80% is attributable to service and other. And although its product segment generated just 1% growth last quarter, on the service side of things, Microsoft's sales rose by 21%. This offers a good mix for investors, as device sales may not be a huge growth opportunity, particularly when economic conditions aren't strong, but they can lead to related service revenue down the road, which in many cases becomes recurring given the ongoing need for Microsoft's cloud and business software.
NASDAQ: MSFT
Key Data Points
The stock is cheap and comes with a fair bit of upside
There will always be some risk in the stock market, particularly when investing in AI stocks. But Microsoft may just be the safest one to own in that space, given its incredibly strong financials -- it has generated more than $119 billion in profit over the trailing 12 months -- and plentiful growth opportunities.
Its valuation is also attractive, as the stock trades at a price-to-earnings multiple of only 22, which is in line with the S&P 500 average. For retirees and risk-averse investors, Microsoft can make a lot of sense as a long-term investment given its modest price tag and exposure to AI. As a bonus, it also pays a modest dividend of about 1%.
