10 Best Stocks for Beginners with Little Money According to Hedge Funds

2. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 279

The renowned technology company Microsoft Corporation (NASDAQ:MSFT) empowers people and organizations to achieve more with technology. The company has segments namely Productivity and Business Processes,  Intelligent Cloud, and More Personal Computing. Microsoft sells its products through OEMs, distributors, and resellers as well as directly through digital marketplaces, online, and retail stores.

Amid the AI boom, Microsoft Corporation (NASDAQ:MSFT) serves as a leading contender among major tech giants in the AI race as a result of its partnership with the AI chatbot maker and has been investing billions to enhance its AI infrastructure. The company’s AI business is booming as reiterated by the CEO Satya Nadella on the recent FY25 Q2 earnings call:

“Already, our AI business has surpassed an annual revenue run rate of $13 billion, up 175% year-over-year”

The company has plans to spend about $80 billion on AI-enabled data centers in fiscal 2025. While Microsoft is trying to lower dependence on OpenAI and include internal and third-party AI models to power its flagship AI product Microsoft 365 Copilot, it recently rolled out DeepSeek’s AI model on the Azure cloud computing platform and GitHub tool for developers.

The stock has underperformed the Nasdaq and its mega-cap tech peers over the prior year. According to CNBC, the tech giant has seen the weakest gain among the eight U.S. tech megacap companies in the past year. The firm recorded a 10% quarterly profit growth for the FY25 Q2. Although the firm’s profits and revenue beat Wall Street expectations, Microsoft’s intelligent cloud segment’s revenue grew by 19% from last year to $25.5 billion which was lower than the consensus estimate.