12 Best QQQ Stocks to Invest in Now

2. Microsoft Corp. (NASDAQ:MSFT)

Number of Hedge Fund Holders: 317

Microsoft Corp. (NASDAQ:MSFT) is a global technology leader that provides software, services, and hardware solutions. It operates through its Productivity and Business Processes, Intelligent Cloud, and More Personal Computing segments. It offers products like Microsoft 365, Azure, Windows, and Xbox.

On March 10, UBS analyst Karl Kierstead reaffirmed a Buy rating on the company with a $510.00 price target. He attributed the recent performance dip to a slowdown in Azure growth excluding AI, despite the company’s explanation of planned go-to-market changes for mid-2024. The analyst noted that the lack of clarity surrounding the cause and resolution timeline is negatively affecting investor confidence.

As of FQ2 2025, the company’s AI revenue hit a $13 billion annual run rate, which was up 175% year-over-year. Azure AI services alone grew 157%, which contributed 13 points to Azure’s overall growth. Over 200,000 monthly users are already on Azure AI Foundry, and Azure OpenAI app usage doubled.  Azure cloud revenue grew 31%. Microsoft Corp. (NASDAQ:MSFT) expects 31-32% Azure growth in the next quarter. It’s investing heavily in AI infrastructure and expects to meet near-term AI demand by the end of FY25.

The company is well-positioned for AI-driven growth, which is evidenced by its large planned investment in data centers and its leading market positions in office software and cloud computing. Mairs & Power Growth Fund stated the following regarding Microsoft Corp. (NASDAQ:MSFT) in its Q4 2024 investor letter:

“Unlike the dot-com companies that operated at the turn-of-the-century, many of today’s technology companies are established businesses with significant cash flows. We have argued, and continue to argue, that many of these investments are perfectly aligned with our investments process in that they embody durable competitive advantages, above-average growth prospects, and excellent management teams.

A perfect example is Microsoft Corporation (NASDAQ:MSFT), which has grown to become the largest holding in the Growth Fund. Microsoft has a near monopoly on the office software productivity market with its Microsoft Office Suite. The company’s Azure platform is a leader in cloud computing and has been steadily gaining share. Thanks to its Office and Azure products, the company is deeply embedded within many enterprise IT ecosystems. Therefore, it should be well-positioned to expand its presence within its customer base, as it rolls out premium-price AI solutions. The company is not resting on its laurels and plans on spending an astounding $80 billion in 2025 to build out AI data centers.”