2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 293
Microsoft Corporation (NASDAQ:MSFT) is a leading developer and provider of support software, services, devices, and solutions. The company is driven by its significant advancement in artificial intelligence and cloud services, including Azure AI and Copilot.
The solution software and cloud services provided by Microsoft Corporation (NASDAQ:MSFT) are used in an array of industries including the mobility and automation sector. The company leverages its Azure software to provide a robust infrastructure for autonomous vehicle operations, including data ingestion, processing, analysis and development of machine learning models required to power autonomous driving systems.
Microsoft Corporation (NASDAQ:MSFT) is working with multiple leading automotive companies to accelerate developments in automation. Some of the prominent names working with Microsoft Corporation (NASDAQ:MSFT) include Wayve, a London-based company pioneering deep learning for autonomous vehicles and Wejo Group Limited, a leader in connected vehicle data.
The company posted a successful fourth quarter of 2024. Its revenue was up 15 year-over-year to reach $245 billion. Revenue growth was due to strong performance across the board. The intelligent cloud segment revenue witnessed a notable increase of 19% year-over-year and reached $28.5 billion. Azure and other cloud services led the growth in this segment by improving service revenue by almost 30% during the year.
Due to the strong performance, Microsoft Corporation (NASDAQ:MSFT) was able to increase its operating income to $27.9 billion, a 15% increase year-over-year. Moreover, the balance sheet of the company also improved significantly with the free cash flow increasing 18% year-over-year to $23.3 billion. As the company continues to improve its cloud services and Azure with AI integration, its utility for the autonomous vehicle grows with it.
Microsoft Corporation (NASDAQ:MSFT) is a good investment, we say this because it was held by 293 hedge funds during the Q1 of 2024, with stakes worth $88.16 billion. Impax Asset Management is the top shareholder of the company with a position worth $1.24 billion. 60 analysts have a Strong Buy rating on the stock, with their 12-month median price target of $498 presenting an upside of 23% from the current level.
Polen Focus Growth Strategy stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q2 2024 investor letter:
The top absolute contributors were Alphabet, Microsoft Corporation (NASDAQ:MSFT), and Amazon. Microsoft was another top absolute contributor in the quarter, speaking to a growing appreciation for all the ways the company has an opportunity to monetize GenAI, be it in its Office suite or Azure cloud business. In the latter case, it contributed 7% to Azure’s revenue growth in the most recent quarter. We believe Microsoft remains a highly advantaged business with many secular tailwinds driving durable growth for the foreseeable future, even at its immense scale.
