1. Microsoft Corporation (NASDAQ:MSFT)
Total Number of Shares Owned: 27,267,737
Total Value of Shares Owned: $12,187,315,624
Number of Hedge Fund Investors: 279
Topping our list of the 10 best stocks to buy according to billionaire Ken Fisher is Microsoft Corporation (NASDAQ:MSFT). Microsoft Corporation (NASDAQ:MSFT) is a global technology leader, renowned for its software, cloud services, and artificial intelligence innovations.
Microsoft Corporation (NASDAQ:MSFT) maintains a bullish outlook, fueled by strategic focus on high-growth areas like artificial intelligence (AI), cloud computing, and sustainability. The Azure platform continues to lead the cloud market, while Microsoft’s integration of AI tools, notably Copilot in collaboration with OpenAI, reinforces its position as a frontrunner in AI-powered solutions.
Microsoft Corporation (NASDAQ:MSFT)’s AI advancements are embedded across its product suite, supporting long-term growth as businesses increasingly adopt AI to enhance productivity. Additionally, Microsoft’s sustainability initiatives, including a partnership with Constellation Energy to power data centers with carbon-free energy, align with its goal of achieving net-zero emissions, enhancing both operational efficiency and its environmental reputation.
In Q3 2024, Microsoft Corporation (NASDAQ:MSFT) exceeded expectations with a normalized EPS of $3.30, beating estimates by $0.20, and reported revenue of $65.59 billion, surpassing forecasts by $1.03 billion. As the next earnings report approaches on January 23, 2025, analysts anticipate a normalized EPS of $3.14 and revenue of $68.98 billion. With 24 upward EPS revisions in the past 90 days, Microsoft Corporation (NASDAQ:MSFT) demonstrates strong momentum and sustained investor confidence in its growth potential.
Generation Investment Management Global Equity Strategy stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q2 2024 investor letter:
“Generative AI’s hunger for power has increased disproportionately with its intelligence. According to one estimate, OpenAI’s GPT-4 required 50 gigawatt hours (GWh) of electricity to train, much more than the 1.3 GWh needed for GPT-3.3 And then AI requires even more power when it is put to use (so called ‘inference’). Some of the latest trends worry us. Microsoft Corporation (NASDAQ:MSFT) appears to be slipping in its ESG goals, with its greenhouse gas emissions rising again last year, as it invests in becoming a big player in AI.
It is struggling in particular to curb its Scope 3 emissions in the capital goods category – nowhere more so than in the activity associated with the construction of data centres: both the embedded carbon in construction materials like steel and cement, as well as the emissions from the manufacturing of hardware components such as semiconductors, servers and racks. Google’s emissions have risen by close to 50% in the past five years.
We feel it is worth dwelling on Microsoft for a few moments, since we suspect you will be hearing a lot more about the relationship between AI and sustainability in the coming months. The bottom line is that we continue to see Microsoft as a sustainability leader. In the case of Scope 2 emissions, the company covers 100% of its electricity use with purchases of renewable energy. Crucially, though, the majority of this green energy is directly sourced via power purchase agreements, which bring new renewable capacity to the grid. Microsoft is also committed to operating 24/7 on renewable power by 2030, a policy that will help bring energy storage onto the grid as well…” (Click here to read the full text)
While we acknowledge the potential of Microsoft Corporation (NASDAQ:MSFT), our conviction lies in the belief that under the radar 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 the ones on our list but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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