(NASDAQ: MSFT) became a favorite on Wall Street this year, with its stock up 46% since Jan. 1. Investors grew bullish over the company's prospects in the artificial intelligence (AI) market, which is projected to expand at a compound annual rate of 37% through 2030. Meanwhile, Microsoft's position as the largest investor in ChatGPT developer OpenAI made it one of the biggest names in the lucrative industry.

However, before you dedicate a large portion of your portfolio to this tech giant, it's wise to be aware of the potential positives and negatives of its business.

The company could profit significantly from AI over the long term, but increasing competition may make navigating the untested market tricky. So, here's one green flag and one red flag for Microsoft in 2023. 

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Source Fool.com