10 Best American Stocks To Buy and Hold in 2025

2. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 279

Microsoft Corporation (NASDAQ:MSFT) is a major American technology company that ranks as the 2nd best American Stock to buy and hold in 2025. It develops and sells a wide range of products and services aimed at helping people and businesses with their computing needs. It has become a significant player in the cloud and artificial intelligence space due to its Azure platform. The company has the second largest share in the international cloud industry around 23-25%, driven by AI integration.

On January 27, Mark Moerdler, an analyst at Bernstein maintained a Buy rating on the stock, keeping his price target at $516. The analyst believes Microsoft Corporation’s (NASDAQ:MSFT) strategic focus on AI and its ongoing investment in its Azure cloud are factors that will catalyze growth in the future. Recently, the company has entered into a significant revenue-sharing agreement with OpenAI that extends their partnership until 2030. This deal is designed to enhance Microsoft’s Azure cloud services by providing access to OpenAI’s advanced artificial intelligence models, which will benefit Azure customers. Management has plans to invest $80 billion in its expenditure cycle to support cloud systems and AI workloads over the next fiscal year.

RiverPark Large Growth Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q3 2024 investor letter:

“Microsoft Corporation (NASDAQ:MSFT): MSFT was a top detractor in the third quarter following a fiscal fourth quarter earnings report that featured inline operating metrics but mixed guidance. Positively, the company reported strong revenue (+15%) and earnings growth (+10%), powered by Azure (+30%), and operating margins of 43%. Guidance however calls for lower than expected fiscal first quarter Azure revenue as infrastructure constraints limit growth, and higher capital expenditures throughout the company’s fiscal 2025 to alleviate these constraints. The company expects growth to reaccelerate in the back half of fiscal 2025 as more AI capacity comes online.

Cloud-based services have become the company’s largest revenue and earnings producer. The company’s Azure platform alone has the potential to grow to more than $200 billion in annual revenue over the next decade. Overall, we believe that the company will continue to deliver double-digit revenue and EPS growth and generate an enormous amount of free cash flow to return to shareholders and use for acquisitions.”