1. Microsoft Corporation (NASDAQ:MSFT)
Stake Value as of Q4 2024: $11,994,729,611
Microsoft Corporation (NASDAQ:MSFT) is engaged in developing and marketing software, services, and hardware that deliver new opportunities, greater convenience, and enhanced value to people’s lives. While the $3 trillion company was co-founded by Bill Gates himself 50 years ago, he now owns less than 1% of the business after his most recent donation of shares to the Gates Foundation in 2022.
Microsoft Corporation (NASDAQ:MSFT) reported revenue of $69.6 billion in Q2 2025, up 12% YoY, while its net income of $24.1 billion surged by 10% on a YoY basis. This strong performance was driven by a 21% increase in cloud revenue, although challenges remain in Azure’s growth. The company also witnessed a whopping 157% jump in AI services revenue last quarter, exceeding its expectations. Microsoft maintains a strong balance sheet, generating $22.2 billion in operating cash flow and ending Q2 with over $17.4 billion available in cash and cash equivalents. It also returned $9.5 billion to investors through dividends and share repurchases.
Shares of Microsoft Corporation (NASDAQ:MSFT) recently took a hit after investment bank TD Cowen reported that the company had canceled some of its leases of data centers in the US, a move that may reflect concerns about whether it’s building more AI computing than it will need over the long term. However, the company responded by saying that it is sticking to its plan to invest over $80 billion in AI and cloud capacity this fiscal year.
Bretton Capital Management stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q4 2024 investor letter:
“Microsoft Corporation (NASDAQ:MSFT) has become the go-to provider of computing services for many emerging AI companies, and its franchise is much more diversified than Alphabet’s, making it a net beneficiary of the AI arms race. Demand for its cloud computing services continued to grow, and the rest of its business (Orce, Windows, Xbox, GitHub, LinkedIn) are also thriving, sending earnings per share up 22% while the stock returned 13%.”
Overall, Microsoft Corporation (NASDAQ:MSFT) ranks first on our list of the best stocks according to Bill Gates. While we acknowledge the potential for MSFT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. 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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