When Gene Munster, managing partner at Deepwater Asset Management, speaks, investors listen—and for good reason. A veteran tech analyst and frequent guest on CNBC’s Fast Money, Munster has long been known for his prescient takes on technology trends and market shifts. His latest bold prediction? The market is entering a multi-year bull run fueled by the explosive growth of artificial intelligence (AI).

Munster’s confidence in AI as a market driver is unwavering. “We’re in a three to five-year bull market powered by AI,” he declared during a recent appearance on Fast Money. This isn’t just hyperbole. For Munster, AI represents not only a new technological frontier but the next seismic shift in the economy that could eclipse even the rise of the internet. “I’m of the belief that this is going to be bigger than the internet,” he added, making it clear that AI is not a temporary trend but the dawn of a new economic era.

Early Signs: Microsoft and the Rise of AI Adoption

One of the prime examples of AI’s growing influence, according to Munster, is Microsoft’s AI-powered products, especially its suite of productivity tools known as Copilot. Microsoft, which boasts over 450 million Office users, has barely scratched the surface in terms of AI adoption. “There are about 5 million users of Microsoft’s Copilot today,” Munster noted. “That’s a small base, but it’s growing rapidly.”

Indeed, Microsoft’s push into AI is in its early stages, and the potential for future growth is enormous. On the company’s April earnings call, executives highlighted that 60% of Fortune 500 companies were already experimenting with Copilot. By the next quarter, usage had doubled. Munster pointed out that while the growth has been impressive, it’s still off a small base—leaving plenty of room for expansion. “This is just scratching the surface,” he emphasized, hinting at the long runway ahead for AI adoption across enterprise and consumer markets.

But it’s not just the raw numbers that matter—it’s the value proposition. Munster acknowledged that while the benefits of AI tools like Copilot aren’t fully visible today, that will soon change. “The question is: Will these products deliver enough value for users to justify the price increase from $100 to $360 a year? I think we don’t see it today, but eventually, we will.”

A Bull Market Fueled by Competition

As with any technological revolution, competition will play a crucial role in shaping the future of AI. Munster believes Microsoft is well-positioned to lead the charge but acknowledges that rivals, such as Meta Platforms, are also making strides in AI. “Microsoft and Meta both have huge exposure to AI. Close to 100% of their business is ultimately going to be impacted by it,” Munster said.

Meta, a company traditionally associated with social media, has also pivoted towards AI, and Munster’s own investment firm, Deepwater, is betting on its future. “We own Meta, but we don’t own Microsoft,” Munster disclosed, citing valuation differences as the reason for this choice. “Meta trades at 20 times forward earnings, while Microsoft is at 26 times. Both will benefit from AI, but our portfolio reflects our view that Meta is the better value right now.”

This competitive landscape will likely fuel even more rapid advancements in AI as companies vie for market leadership. Munster isn’t concerned about Microsoft’s decision to charge an additional subscription fee for Copilot instead of folding it into existing Office software. “Ultimately, it’s about delivering value. If these AI tools can provide enough utility, people and businesses will pay for them,” he explained. He drew a parallel to the iPhone, which initially cost $400 but now averages $850. As AI products prove their worth, Munster expects similar price increases to be accepted by the market.

Azure and the A.I. Gold Rush

While Microsoft’s Copilot and Office products are pivotal, Azure, the company’s cloud platform, also plays a critical role in its AI strategy. Recently, Microsoft resegmented its financial reporting to separate Azure’s growth from its AI component, leading some analysts to express concern over the perceived “flat” performance of the non-AI parts of Azure. Munster, however, remains unphased. “Azure growth without AI isn’t as exciting, but AI is what’s driving the growth right now,” he said. “That’s okay. The AI gold rush is just getting started.”

Munster sees AI as the catalyst not just for individual companies but for the market at large. He believes we are still in the very early innings of this bull run. “I think this is going to grow much longer than people believe,” Munster said confidently, suggesting that the opportunities presented by AI will extend well beyond the next few years.

The Long-Term Vision: Bigger Than the Internet

If Munster is right, investors may be witnessing the start of a market revolution that could rival the dot-com boom of the late 1990s. “AI will be bigger than the internet,” he repeated, stressing the transformative impact that AI will have across industries. From healthcare to manufacturing, from retail to financial services, AI is poised to revolutionize how businesses operate, how consumers interact with technology, and ultimately, how the global economy functions.

For investors, Munster’s message is clear: now is the time to pay attention to AI and the companies driving its development. “We’re in the early stages, but this is going to be a multi-year bull market,” he reiterated, signaling that those who get in early stand to reap significant rewards as AI reshapes the market landscape.

In the meantime, Munster will be watching September’s Apple event closely for further evidence of AI’s growing influence. “I think what we’re going to see with Apple is the same kind of idea—how they’re building Apple Intelligence and getting people to buy hardware,” Munster said, hinting at Apple’s growing investment in AI-powered products. “Just like Microsoft, Apple will be successful at getting people excited about AI.”

Gene Munster’s message is simple: the AI revolution is here, and the market is only beginning to realize its full potential. Investors should take note because this bull market could be just getting started.