1. 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.
Microsoft is an important player in the VR space. The company focuses on enterprises with its HoloLens device, an ergonomic, untethered self-contained holographic device with enterprise-ready applications to increase user accuracy and output. HoloLens 2 combined with software solutions is a hands-free computer that goes where one goes, sees what one sees, and does what one says. It enables acting with precision and working together with those who are remote on a holographic canvas overlayed in one’s physical environment. HoloLens 2 has diverse applications in industries including manufacturing, education, and healthcare.
Additionally, Microsoft Mesh is a platform for creating and sharing immersive 3D spaces for realistic virtual connections. Mesh encompasses an avatar system, spatial audio, virtual event production tools, and synchronizes experiences and interactivity across users on PC and VR. Leading companies such as Accenture are using Microsoft Mesh to expand its digital campus, One Accenture Park, to elevate onboarding and train new employees globally while PwC is bringing employees together to strengthen the company culture with immersive wellness experiences, such as guided and self-led tours and orientations.
For the FY25 Q1, Microsoft Corporation (NASDAQ:MSFT) recorded revenue of $65.6 billion, up 16% year-over-year. The firm witnessed a solid start to its fiscal year, driven by the continued strength of the Microsoft Cloud, which surpassed $38.9 billion in revenue. The segments remained robust. Revenue in Productivity and Business Processes was up 12%, revenue in Intelligent Cloud increased 20%, and revenue in More Personal Computing climbed 17%, year-over-year. Simultaneously, the firm’s AI business is on track to surpass an annual revenue run rate of $10 billion next quarter which will mark it as the fastest business in MSFT’s history to hit this milestone.
Thus, the growth opportunities for Microsoft Corporation (NASDAQ:MSFT) to look forward to are vast. The company can potentially continue enabling immersive experiences which are experiencing rising attention in today’s ever-evolving and innovating world. The stock is held by 279 hedge funds, as of 2024’s second quarter.
While we acknowledge the potential of MSFT as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued 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.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
