10 Best Cloud Stocks To Buy According to Hedge Funds

2. Microsoft Corp (NASDAQ:MSFT)

Number of Hedge Fund Investors: 279

Microsoft Corp (NASDAQ:MSFT) has the second largest market share in the cloud computing niche with Azure having a market share of 23-25%. This segment has been growing by over 20%, driven by the increasing acceptance of AI services on the cloud platform. The revenue should reach $200 billion by 2028 and serves 85% of the Fortune 500 companies.

MSFT has entered into a revenue-sharing deal with OpenAI that would enable Azure to access OpenAI till 2030. This deal should benefit the Azure customers by providing them access to leading models. The estimated capex for supporting cloud systems and AI workload is $80 billion for the next fiscal. Half of this will be done in the US. Other key investments include a $3 billion investment in India to expand Azure cloud and AI capacity and major capacity expansion in the Middle East. While earnings in the next quarters are expected to slow, the investment in cloud and AI business should bear results from 2025.