2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ:MSFT) is a major big tech name. While it initially gained fame for its Windows and Office products, the company has since diversified its product and service offerings to include a cloud business, including its Azure cloud infrastructure service.
Considering Microsoft Corporation’s (NASDAQ:MSFT) leading role in both cloud computing and AI, investors in the stock have experienced immense growth in their portfolios. This is particularly because of the growth of Microsoft Corporation’s (NASDAQ:MSFT) AI products, most notably Azure OpenAI, which is now used by 65% of the Fortune 100. Another AI product developed by Microsoft Corporation (NASDAQ:MSFT), GitHub Copilot, now has about 1.8 million paid subscribers, which is also significantly contributing to Microsoft Corporation’s (NASDAQ:MSFT) earnings growth. Considering these factors, investors are picking up Microsoft Corporation (NASDAQ:MSFT) more enthusiastically than ever.
A total of 279 hedge funds held stakes in Microsoft Corporation (NASDAQ:MSFT) in the second quarter, with a total stake value of $89.1 billion.
Baron Funds mentioned Microsoft Corporation (NASDAQ:MSFT) in its second quarter 2024 investor letter:
“Microsoft Corporation (NASDAQ:MSFT) is the world’s largest software and cloud computing company. Microsoft was traditionally known for its Windows and Office products, but over the last five years it has built a $135 billion run-rate cloud business, including its Azure cloud infrastructure service and its Office 365 and Dynamics 365 cloud-delivered applications. The stock contributed to performance because of continued strong operating results and investor enthusiasm regarding Microsoft’s leadership across the secular megatrends of AI and cloud computing. Recent business momentum continued to show evidence of the strength and attractiveness of Microsoft’s product portfolio among its customer set: (1) Azure OpenAI – its suite of AI services – is now used by 65% of the Fortune 100 and contributed 7% of Azure revenue (an annualized run rate of $5.2 billion); (2) GitHub Copilot – its AI code writing service – is bending the productivity curve for developers (reports of 40%- plus improvements in developer efficiency) and now has 1.8 million paid subscribers, with growth accelerating to over 35% quarter-over-quarter; and (3) Copilot Studio – its AI application service that makes it easier for anyone to build an application, automate a workflow, or create a Copilot using natural language. 30,000 organizations across every industry have used Copilot Studio to customize Copilot for Microsoft 365 or build their own, up 175% quarter-over-quarter. In the March quarter, Microsoft again reported better-than-expected financial results, highlighted by Microsoft Cloud growing 23% year-over-year, with the fastest commercial bookings in six quarters, and Azure accelerating to 31% constant currency growth, up from 28% in the previous quarter. June quarter guidance came in-line with consensus, but the company provided higher guidance for the most important segment, Intelligent Cloud, on the back of continued strong trends across Azure and Azure OpenAI. We remain confident that Microsoft is one of the best-positioned companies across the overlapping software, cloud computing, and AI landscapes.”
