10 Stocks Hedge Funds Are Crazy About Right Now

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1. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Investors In Q1 2024: 302

Microsoft Corporation (NASDAQ:MSFT) is not only the top hedge fund stock pick but it is also the most valuable technology company in the world. Its key role in the technology industry also enables it to keep a keen eye on new technologies, the latest of which is AI. Under its CEO Satya Nadella, Microsoft Corporation (NASDAQ:MSFT) has successfully diversified from personal to enterprise computing and moved forward from a rather disastrous foray into consumer electronics. Enterprise computing also enables it to fully utilize AI through initiatives such as the new CoPilot AI platform, which can be used for a myriad of use cases such as evaluating code. Microsoft Corporation (NASDAQ:MSFT)’s role as Windows’ developer provides it with a unique opportunity to leverage AI internally as well, and success with AI commercialization by convincing businesses to use the technology will be key factors for its success.

Mar Vista Investment mentioned Microsoft Corporation (NASDAQ:MSFT) in its Q1 2024 investor letter and shared:

Microsoft continues to occupy a strong position, poised to capture market share as businesses navigate the transition to a digital-first landscape and embrace generative AI-driven solutions. The company’s commanding presence in the enterprise arena, combined with its comprehensive product portfolio encompassing Infrastructure- as-a-Service (IaaS), Platform-as-a-Service (PaaS), and Software-as-a-Service (SaaS), establishes it as a crucial provider of IT solutions for companies of all sizes. Microsoft is effectively executing its strategy in a sizable market by offering a roadmap for digital transformation and adoption of AI-driven solutions, such as ChatGPT, while enhancing productivity and reducing costs. Consequently, we anticipate that Microsoft’s solutions should exhibit resilience even in a more challenging macroeconomic environment, supporting low double-digit growth in intrinsic value within our investment horizon.

While MSFT is the top hedge fund stock pick, 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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Disclosure: None.

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