10 Best Stocks to Buy and Hold for 20 Years

2. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 317

Analyst Keith Weiss from Morgan Stanley maintained a “Buy” rating on Microsoft Corporation (NASDAQ:MSFT)’s stock and gave the price objective of $472.00.  The analyst’s rating is backed by a combination of factors demonstrating the company’s long-term potential amidst current challenges. The company’s valuation demonstrates a positive risk-reward balance for investors focusing on long-term prospects, mainly in the era of GenAI, where Microsoft Corporation (NASDAQ:MSFT) is regarded as a leader. Elsewhere, analyst Mark Murphy from J.P. Morgan maintained a “Buy” rating on the company’s stock.

The rating was backed by a combination of factors demonstrating Microsoft Corporation (NASDAQ:MSFT)’s strategic positioning and growth potential. One of the critical reasons is its significant advancements in the security offerings. As per the analyst, such developments remain critical as they address the increasing worries related to the IT landscape, mainly in the context of AI, and also enhance Microsoft Corporation (NASDAQ:MSFT)’s capability to provide comprehensive security solutions throughout multi-cloud environments. Morningstar assigned a wide economic moat rating, which stems from the switching costs. Notably, the network effects and cost advantages have been tagged as secondary moat sources. The firm expects that Microsoft Corporation (NASDAQ:MSFT) is expected to earn returns in excess of its cost of capital over the upcoming 20 years. The company’s AI initiatives can create new revenue streams and improve the existing products throughout its portfolio, supporting its growth trajectory for the decades to come.

Fred Alger Management, an investment management company, released its Q1 2025 investor letter. Here is what the fund said:

“Microsoft Corporation (NASDAQ:MSFT) is a beneficiary of corporate America’s transformative digitization. The company operates through three segments: Productivity and Business Processes (Office365, LinkedIn, and Dynamics), Intelligent Cloud (Server Products and Cloud Services, Azure, and Enterprise Services), and More Personal Computing (Windows, Devices, Gaming, and Search). During the quarter, shares detracted from performance as Azure revenue growth missed analyst estimates, marking the third consecutive quarter of modest disappointment in this segment. However, AI-related sales growth exceeded expectations, accounting for 13% of Azure’s quarterly growth. Management also maintained their fiscal third quarter earnings guidance while highlighting improved operating profitability and lower tax rates. Despite the disappointing quarter, we remain confident in Microsoft’s ability to sustain its leadership position in AI.”