In this piece, we will take a look at the ten best stocks in each sector in 2024.
With 2024’s close approaching fast, the stock market has touched new records that few would have thought were possible when the Federal Reserve started its interest rate hiking cycle in March 2022. Most of the stock market’s gains are due to artificial intelligence making a splash in November 2022, and since then, investors have had a chance to bask in meteoric returns as they waited for financial conditions to ease.
For instance, consider the stock performance of the world’s leading AI GPU designer. From the start of 2021 to the end of 2022, when inflation had peaked in the US, its shares had bled 53%. Back then, the semiconductor industry was facing a historic glut as chip companies had shipped excessive inventory into the channel after witnessing booming demand during the pandemic era. However, since the start of November 2022, the stock has gained 800%+, simply due to the fact that its GPUs are the prized commodity for training and using AI software.
On the flip side, consider a warehouse and logistics real estate stock with a market value of $117 billion and which ranked 11th on our list of the 12 Best Forever Stocks To Buy Now. During the time that the GPU designer’s shares gained 800%+, its stock has posted a mere 17% in returns through share price appreciation. This bifurcation sits at the heart of the stock market right now, where while stocks exposed to AI, such as the 4th top stock out of the 12 that Jim Cramer believes investors should watch closely, are up by 61% year to date.
Apart from chip designers, other stocks have also been caught up in the AI wave. One of the biggest sectors that has seen these tailwinds is utilities. Within utilities, firms that rely on carbon free sources to generate electricity are seeing particular interest. One top stock that has performed well this year ranked 2nd on our list of 10 Best Infrastructure Stocks To Buy Now. A nuclear energy firm that generates 90% of its 32GW energy capacity through nuclear, the stock is up 120% year to date. In fact, this stock jumped by a hefty 26% between September 18th to September 23rd, after Microsoft announced a 20 year deal with it to use a nuclear plant at Three Mile Island to power up its AI data centers. The shares were further helped when the biggest banks in the world backed a COP28 goal to triple global nuclear power generation capacity by 2050.
Focusing on the broader clean energy sector which has been quite distressed in the era of high rates with the S&P’s clean energy index down by 3.19% over the past year, analysts continue to be bullish about the sector’s future. Estimates from the International Energy Agency (IEA) suggest that global clean energy demand is slated to grow by 3.4% annually until 2026. Within the US, the Energy Information Agency (EIA) expects that renewable energy deployment will grow by 17% in the US this year to potentially account for 25% of American energy production by touching 42GW. Government spending has played a key role in this optimism, as these initiatives have led to private companies announcing $82 billion in investments for clean energy manufacturing and infrastructure.
While clean energy has lagged amidst investor worries of high rates sapping investments, other sectors have prospered. One such sector is the telecommunications sector. As we live in the information age, humanity’s data consumption has touched levels no one would have thought were possible when the internet was growing in popularity during the 1990s. Estimates show that while global data consumption already sat at a remarkable 3.4 million petabytes (PB – 1 PB = 1,048,576 GB), it is expected to grow to 9.7 million PB by 2027. Simultaneously, telecommunications companies are expected to invest a whopping $342 billion in network upgrades by 2027, while the number of Internet of Things (IoT) gadgets is expected to surge to 25.1 billion by the same year. Telecommunications stocks have performed well over the past twelve months as well since the S&P’s telecommunications index is up by 40.48%.
Mid September also saw a status quo change on Wall Street as the Federal Reserve cut interest rates by 50 basis points. While this is great for industrial, real estate, and clean energy stocks, it’s also beneficial for financial services firms and banks in particular. While banks have the opportunity to earn more money through interest from loans generated when rates are high, their deposit costs also increase to dent the overall net interest income. As a result, since the Fed’s rate cut announcement, the S&P’s bank stock index has gained 5.8%. As a whole, the financial services industry is expected to grow at a compounded annual growth rate (CAGR) of 7.7%, or from $31 trillion in 2023 to $33.5 trillion by the end of this year.
Crucially, lower rates also mean that alternative securities become more attractive to investors. When it comes to stocks, dividend stocks are particularly favored as their yield becomes lucrative compared to low interest rates. The Dividend Aristocrat Index is up by 2.3% since the rate cut. Investors, it seems, are attracted to dividends again, which is unsurprising considering that the S&P’s dividend stocks paid out $153 billion in dividends in Q2 2024 to mark a 7% annual and 1.2% sequential growth.
So, as some sectors of the stock market continue to impress investors and with the narrative on Wall Street shifting to an era of low interest rates, we decided to look at the best stocks to buy in each sector.
A Nuclear power plant with all its safety & security protocols in place.
Our Methodology
To make our list of the best stocks to buy in each sector, we used our coverage of the best stocks in infrastructure, materials, clean energy, telecommunications, financial services, dividends, artificial intelligence, real estate, consumer defensive, and healthcare to pick out the top stocks. The stocks are ranked by the number of hedge funds that bought the shares during Q2 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
10. Liberty Broadband Corporation (NASDAQ:LBRDK)
Number of Hedge Fund Holders in Q2 2024: 55
Liberty Broadband Corporation (NASDAQ:LBRDK) is one of the biggest cable companies in America. This provides it with a double edge sword in today’s fast paced environment. The firm also owns a sizeable stake in Charter Communications, which means that cable and broadband usage are the two key determinants of Liberty Broadband Corporation (NASDAQ:LBRDK)’s hypothesis. Consequently, the firm’s shares are down by 5.48% year to date as the expiration of government subsidies has led to a drop in subscribers. Liberty Broadband Corporation (NASDAQ:LBRDK)’s subscribers dropped by 149,000 during the second quarter, which followed a massive 26% share price drop in February after Charter revealed that it lost 61,000 subscribers during Q4 and used its free cash flow to repurchase stock. Consequently, the stock’s future depends on its ability to compete in a broadband market that is facing pricing pressures and alternatives such as satellite internet and a cable industry struggling to compete with streaming services. However, Liberty Broadband Corporation (NASDAQ:LBRDK) soared by 26% in September after it made progress with an offer to merge with Charter and consolidate resources. Further progress on the deal could translate into tailwinds.
Alluvium Asset Management mentioned Liberty Broadband Corporation (NASDAQ:LBRDK) in its Q2 2024 investor letter. Here is what the fund said:
“Liberty Broadband was down 4.4%. It owns cable assets across the US, principally via its investment in Charter Communications. Both reported first quarter earnings, and there was little to add from prior news. Internet subscribers continued to fall due to competitor offerings, and the looming end of the Affordable Connectivity Program (ACP) adds uncertainty. We estimate that around one in six of Charter’s residential customers benefited from the ACP subsidies that expired in June. With internet now a basic utility, the risk is not that these customers abandon the product, but rather that they source it elsewhere. We are hopeful that by offering inducements (like free mobile for a year) Charter will mitigate customer losses. On a more positive note, Charter has added nearly half a million mobile subscribers over the year, its churn rate is at record lows, and the rural build out is progressing ahead of schedule. Whereas the ACP effects will be felt in the short term, it will take some time before the growth initiatives (like the rural rollout and mobile convergence strategy) shine through. We also expect the fixed wireless competitors to eventually increase pricing as their capacity is absorbed. This will all take time. We are prepared to wait. We bought a little more Liberty, and it now comprises 5.4% of Fund assets.”
9. American Tower Corporation (NYSE:AMT)
Number of Hedge Fund Holders in Q2 2024: 63
American Tower Corporation (NYSE:AMT) is a specialty real estate investment trust that caters to the needs of the communications, broadcasting, and data center industries. It is one of the biggest companies of its kind that has a presence in 25 countries. This exposure makes it unsurprising that American Tower Corporation (NYSE:AMT)’s shares are up by 43% over the past 12 months despite the fact that the broader Dow real estate index has gained 28% over the same time period. American Tower Corporation (NYSE:AMT)’s data centers cater to the needs of the artificial intelligence industry, particularly in the edge segment of the data center market. This segment typically caters to consumer needs, and if the consumer use cases of AI grow, then American Tower Corporation (NYSE:AMT) could see additional tailwinds. Additionally, the firm operates on a 5 to 10 year contract model which makes its revenues more predictable than others. American Tower Corporation (NYSE:AMT) has also been busy improving margins by selling its Indian operations, and given the lower rate environment in the future, it could see further gains. However, economic weakness can hit the shares hard.
Baron Funds mentioned American Tower Corporation (NYSE:AMT) in its Q1 2024 investor letter. Here is what the fund said:
“Following a more than 30% rebound in the fourth quarter of 2023, shares of American Tower Corporation lagged in the first quarter of 2024. The uncertainty around the timing and ultimate financial impact of American Tower’s India business sale, ongoing lower overall spending by wireless carriers, and higher interest rates weighed on the company’s shares. Please refer to our “Top Net Purchases” section for our rationale for acquiring additional shares.”
8. NextEra Energy, Inc. (NYSE:NEE)
Number of Hedge Fund Holders in Q2 2024: 73
NextEra Energy, Inc. (NYSE:NEE) is one of the biggest clean energy companies in the US. It has 33GW of power generation capacity in its portfolio which comes through sources such as solar, wind, and nuclear. Clean energy stocks tend to falter when rates are high. This is why NextEra Energy, Inc. (NYSE:NEE)’s shares are up by a muted 25% over the past twelve months. However, the ‘winds’ might be shifting for the stock as the shares have gained 2.8% since the Federal Reserve announced a 50 basis point cut in September. Additionally, Microsoft’s deal with Constellation Energy to start a nuclear plant to power data centers could also lead to growing interest in big tech for clean energy solutions. Given NextEra Energy, Inc. (NYSE:NEE)’s exposure to the sector, the firm could see tailwinds from these developments. Wall Street’s interest in nuclear is growing as shown by big banks warming up to COP28 nuclear commitments lately, to further boost the firm’s prospects. Finally, NextEra Energy, Inc. (NYSE:NEE)’s Florida subsidiary which forms the core of its operations has performed well and kept consumers’ bills below 40%.
ClearBridge Investments mentioned NextEra Energy, Inc. (NYSE:NEE) in its Q2 2024 investor letter. Here is what the fund said:
“AI-related momentum was a key driver of performance in the second quarter, lifting the enablers in technology as well as holdings like renewable power producer NextEra that supply the increasing energy needs of data centers. Parts of the market lacking an AI connection, like our medical device holdings, underperformed despite no change to fundamentals. We have managed through several similar momentum periods over our tenure and have delivered long-term results for shareholders by staying true to an approach that emphasizes diversification across three buckets of growth companies (select, stable and cyclical) and seeks to take advantage of attractive entry points into quality growth businesses.”
7. Freeport-McMoRan Inc. (NYSE:FCX)
Number of Hedge Fund Holders in Q2 2024: 79
Freeport-McMoRan Inc. (NYSE:FCX) is one of the biggest mining companies in the world. The firm produced 1.1 billion pounds of copper, which is a key resource for today’s electrification wave. Freeport-McMoRan Inc. (NYSE:FCX) benefits from its sizeable scale, as it allows it to have access to stable production sites that enable it to scale production or reduce it without incurring significant capital expenditure. In the age of AI stocks powering Wall Street, the firm’s shares are up 15% year to date. While this might seem surprising, the ‘modest’ returns are also because of Freeport-McMoRan Inc. (NYSE:FCX)’s exposure to copper. Since China is one of the world’s biggest copper consumers, weakness in its economy also means that copper producers face pessimistic investors. However, the reverse is also true, as after the Chinese government announced a staggering stimulus package, Freeport-McMoRan Inc. (NYSE:FCX)’s stock soared by 7%. Simply put, growth in electrification helps the stock, while industrial slowdowns affect it.
Freeport-McMoRan Inc. (NYSE:FCX)’s management directly addressed concerns about China during the Q2 2024 earnings call:
“We’ve discussed on prior calls, the impact of macro sentiment and investor positioning that can drive large moves in pricing. Richard referred to the domestic economic challenges in China, the ongoing weakness in the Chinese property market, destocking and working capital management and increase in copper exchange inventories and delays in actions to stimulate economic growth, which have all weighed on the market. In the U.S., we’re seeing — continuing to see strong demand for copper from a broad range of sectors. And globally, we favorable demand drivers for the future associated with copper’s increasingly important role in the global economy. Copper is a foundational essential metal when it comes to electrification, and the world is becoming more and more focused on copper-intensive energy applications.
The facts are its physical characteristics and superior conductivity make it the metal of electrification. New massive investment in the power grid, renewable generation, technology infrastructure and transportation are driving increased demand for copper and forecast call for above-trend growth and demand for the foreseeable future. As we review the fundamentals and match the demand side up with supply, we look at the limitations of existing supply growth, the challenges and extended time frames required to build new supplies and projections for peak mine supply over the next couple of years. These factors, combined with secular demand trends point to tight market conditions as we go forward. With Freeport’s leading position in the industry, large-scale current operations and future growth pipeline, we’re very well positioned to benefit from this fundamental outlook in the future.”
6. S&P Global Inc. (NYSE:SPGI)
Number of Hedge Fund Holders in Q2 2024: 90
S&P Global Inc. (NYSE:SPGI) is one of the biggest financial services providers in the world. It has a diverse set of products which range from credit ratings to third party research, supply chain solutions, and stock index management. However, despite the diversity, $4.5 billion of S&P Global Inc. (NYSE:SPGI)’s $7 billion in revenue during H1 2024, or 64% came from its markets intelligence and credit rating businesses. The picture is further complicated by the fact that market intelligence is a margin light business, as 48% of the firm’s $2.9 billion of H1 operating income was through ratings. What these metrics imply is that S&P Global Inc. (NYSE:SPGI) is heavily dependent on the bond market for its performance. Consequently, as credit markets recover from the shock of 24 year high interest rates, S&P Global Inc. (NYSE:SPGI)’s shares are up by just 9.30% since 2022 start. However, provided that capital markets activity grows, then the stock could provide gains, particularly as the ratings division’s H1 2024 revenue of $2.2 billion marked a 29% annual growth.
S&P Global Inc. (NYSE:SPGI)’s management commented on the rating business during its Q2 2024 earnings call:
“Now turning to Ratings where we saw exceptional revenue growth of 33% which exceeded our internal expectations. Transaction revenue grew by 63% in the second quarter, fueled by increased bank loan and bond issuance. Non-transaction revenue increased 9%, primarily due to an increase in annual fee revenue and an increase in new mandates, particularly from the return of high-yield issuers. Adjusted expenses increased 8%, driven by higher compensation, including incentives, as well as investments in strategic initiatives.
This resulted in a 52% increase in operating profit and an 810 basis point increase in operating margin to 65.8%. For the trailing 12 months, Ratings margin expanded 570 basis points to 60.9%.”
5. Vistra Corp. (NYSE:VST)
Number of Hedge Fund Holders in Q2 2024: 93
Vistra Corp. (NYSE:VST) is a diversified electricity utility headquartered in Irving, Texas. The firm provides gas and electricity to consumers in several American states. Vistra Corp. (NYSE:VST) has a strong presence in the Texan energy market as it accounts for roughly one fifth of the state’s electricity consumption. Unlike several of the US’ sizeable electricity companies which often have to deal with regulators to set their ROE, Vistra Corp. (NYSE:VST) operates in unregulated markets which leaves the firm vulnerable to downswings in the industry if prices drop. Crucially though, the firm’s diversified power generation model that relies on clean energy sources like nuclear and others like coal can serve it well during the early phases of the AI data center build out. This is because data centers require continuous electricity, which solar and wind facilities cannot generate. Vistra Corp. (NYSE:VST) has also been making prescient acquisitions, with a nuclear asset purchase in 2023. This created a new entity, and the firm’s stock soared by 25% in September after it acquired the remaining interest in the entity. The reason behind the bullishness was clear as Wall Street and big tech are now increasingly focused on nuclear power for data centers and emissions reduction.
Meridian Funds mentioned Vistra Corp. (NYSE:VST) in its Q2 2024 investor letter. Here is what the fund said:
“Vistra Corp. (NYSE:VST) is an integrated retail electricity and power generation company with operations across 20 U.S. states and Washington D.C. We identified Vistra as a likely beneficiary of the projected growth of power-hungry data centers, spurred by the rise of generative AI, increasing electricity demand, and higher power prices. The stock performed well after the company delivered stronger than expected earnings. Management also provided forward guidance that exceeded investors’ expectations and reaffirmed shareholder-friendly plans for sizable share repurchases through 2025. We trimmed our position in the quarter following the strong performance and continue to see strong long-term prospects for the company.”
4. Walmart Inc. (NYSE:WMT)
Number of Hedge Fund Holders in Q2 2024: 95
Walmart Inc. (NYSE:WMT) is the biggest brick and mortar retailer in the world. It operates through a stunning 100,000 locations worldwide and has sizeable financial assets as indicated by $665 billion in revenue and $252 billion in assets. These provide Walmart Inc. (NYSE:WMT) with key competitive advantages as it is able to offer consumers the lowest prices possible and keep margins steady in a business notorious for low margins. Yet, its future depends on Walmart Inc. (NYSE:WMT)’s ability to cater to the growing eCommerce market, particularly online grocery delivery firms like Instacart. As a result, the firm’s hypothesis is dependent on its same store sales and eCommerce. On the latter front, Walmart Inc. (NYSE:WMT) is charging ahead with its Marketplace platform, and the firm also has an eye on emerging technologies such as robotic warehouse automation. The firm has inked a deal with Symbotic for this, and it has also worked with clean energy van companies to reduce its carbon footprint.
Walmart Inc. (NYSE:WMT)’s management commented on its Marketplace performance during the Q2 2025 earnings call:
“For marketplace and Walmart fulfillment services, in the U.S., we’ve now seen more than 30% growth in each of the past four quarters, as we continued to increase seller counts on the platform by double-digits. Growth from sellers using our Marketplace Fulfillment Services increased 800 basis points in Q2, surpassing 40% penetration. Sales in fashion, toys, hard lines, and home all grew more than 20%. Outside the U.S., we’re seeing similar trends as we enhance our capabilities in product assortment. For example, Flipkart delivered double-digit top line growth and more than doubled the number of units that delivered same day. In Mexico, we grew marketplace items and sellers by around 60%.
And in Chile, we launched cross-border trade, adding sellers from China and the U.S. to our local marketplace offering. Within data analytics and insights, Walmart Data Ventures continues to see strong results as clients value the insights we provide, bringing together consumer behavior with omnichannel sales and inventory trends across our platform. Our client base has increased nearly 200% versus last year as we launch new tools and enter new markets, including the expansion of our Walmart Luminate product in Mexico in May.”
3. Thermo Fisher Scientific Inc. (NYSE:TMO)
Number of Hedge Fund Holders in Q2 2024: 108
Thermo Fisher Scientific Inc. (NYSE:TMO) is a sizeable company in the global pharmaceutical raw materials and lab equipment industry. Its scale lends it indispensable advantages in the life sciences industry. These are primarily trust and deep industry partnerships that enable Thermo Fisher Scientific Inc. (NYSE:TMO) to remain at the forefront of emerging trends. This was clear during the pandemic era, as it was Moderna’s partner for the coronavirus vaccine. However, as of 2023, 60% of Thermo Fisher Scientific Inc. (NYSE:TMO)’s revenue was from the pharmaceutical industry. Pharma performs well when rates are low as companies can invest heavily in future drugs. Consequently, the firm’s shares jumped by 1.6% after the Fed’s rate cut in September. Yet, they ended up losing their gains after the firm’s Investor Day. This was because Thermo Fisher Scientific Inc. (NYSE:TMO)’s management did not share optimistic updates for its China business and refrained from providing an outlook for 2025. Therefore, moving forward, these elements should be the two keys when evaluating Thermo Fisher Scientific Inc. (NYSE:TMO)’s shares.
One segment where Thermo Fisher Scientific Inc. (NYSE:TMO)’s management has focused quite a bit is the proteomics industry. Here is what they shared during the Q2 2024 earnings call:
“I’ll begin with the new technologies we launched at the American Society for Mass Spectrometry Conference, further strengthening our industry leading position in analytical instruments. At the conference, we introduced the Thermo Scientific Stellar Mass Spectrometer, which extends our leadership in proteomics. The Thermo Scientific Stellar is used to validate biomarker candidates. It offers unprecedented analytical capabilities for targeted quantitation, enabling the insights needed by researchers to advance their work.
It’s a perfect complement to our groundbreaking Thermo Scientific Orbitrap Astral, used for protein discovery that we launched last year. It was incredibly exciting to hear the customer testimonials sharing the power of the Orbitrap Astral. To-date, we’ve had more than 40 publications that incorporated the impact of this breakthrough, and we’re really just getting started. Also at ASMS, we launched three new build-for-purpose editions of the Thermo Scientific Orbitrap Ascend Tribrid Mass Spectrometer tailored to specific applications for MultiOmics, Structural Biology and BioPharma. These instruments continue to elevate our industry-leading Thermo Scientific Orbitrap portfolio by offering enhanced speed and sensitivity to detect and characterize the most difficult protein samples, including complex biologics.”
2. Visa Inc. (NYSE:V)
Number of Hedge Fund Holders in Q2 2024: 163
Visa Inc. (NYSE:V) is one of the biggest payments processing companies in the world. This is evidenced by its market share, which estimates suggest controls 61% of US payments volume. However, as cable and broadband companies are witnessing in the media and communications industry, emerging technologies can threaten Visa Inc. (NYSE:V)’s moat. Alternative payment services, which typically do not require a bank account and are often favored by merchants because of lower liability protections, can offer compelling alternatives to Visa Inc. (NYSE:V)’s products in the long term. However, these are long term trends, and the firm is taking some steps to ensure this doesn’t happen. It and Mastercard have agreed to a $30 billion settlement to address merchant complaints of high fees. However, the future of the deal is uncertain after a judge rejected it in June. Visa Inc. (NYSE:V) was also dealt a blow in September when the shares dropped by 3% after a Bloomberg report claimed that the DOJ was preparing to file an antitrust suit against it. Then, the shares dropped by 5.5% on the day that the Justice Department sued the company. Antitrust lawsuits take significant time to play out, but their impact on investor sentiment is often immediate. Additionally, the stock’s performance depends on payment volumes, and if these drop, then Visa Inc. (NYSE:V)’s scale works against it as it struggles to fund its operating costs.
Aoris Management mentioned Visa Inc. (NYSE:V) in its Q2 2024 investor letter. Here is what the firm said:
“Visa operates the world’s largest payments network, which facilitates the movement of money between merchants, financial institutions, consumers, businesses, and governments.
The company is best known for enabling consumers to make debit and credit card payments. In the year to September 2023, 4.3 billion Visa cardholders made 213 billion transactions on its network, to a total value of US$12.1 trillion.
Compared to cash and cheques, which are still widely used around the world, Visa’s network is a more convenient, secure, and ubiquitous way for consumers to pay. Visa has invested to reduce friction and fraud in the payments experience, to the benefit of both merchants and consumers.”
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders in Q2 2024: 279
Microsoft Corporation (NASDAQ:MSFT) is one of the biggest software companies in the world. It operates across two fronts, namely personal computing through Windows and Cloud computing via Azure. This provides Microsoft Corporation (NASDAQ:MSFT) with the advantages of catering to a high volume market through Windows and a margin heavy, recurring revenue business with Azure. It also means that since roughly 50% of Microsoft Corporation (NASDAQ:MSFT)’s revenue as of Q4 FY24 comes from Cloud, growth and cost control coupled with profitability for this business are key drivers of the firm’s hypothesis. On this front, Microsoft Corporation (NASDAQ:MSFT) is aggressively investing billions of dollars in artificial intelligence, and it is one of the few companies in the world to have a foundational AI model courtesy of its partnership with OpenAI. As a result, future share price gains are dependent on Microsoft Corporation (NASDAQ:MSFT)’s ability to convince investors that AI investments are leading to cloud computing profits.
Baron Funds mentioned Microsoft Corporation (NASDAQ:MSFT) in its Q2 2024 investor letter. Here is what the firm said:
“Microsoft Corporation is the world’s largest software and cloud computing company. Microsoft was traditionally known for its Windows and Oice 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 Oice 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.”
MSFT tops our list of the best stocks to buy in each sector. But our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than MSFT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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