12 Best Tech Stocks to Buy For Long-Term Investment

2. Microsoft Corp. (NASDAQ:MSFT)

Number of Hedge Fund Holders: 317

Microsoft Corp. (NASDAQ:MSFT) develops and supports global software, services, devices, and solutions. One of its business segments includes Productivity and Business Processes which offers Microsoft Teams, office 365 Security and Compliance, Microsoft 365 Copilot, and others. It also provides LinkedIn, on-premises ERP, and CRM applications.

The company’s Intelligent Cloud segment offers server products and cloud services. It’s primarily driven by Azure and achieved $25.5 billion in FQ2 2o25 revenue, which was up 19% year-over-year. This was fueled by the expanding AI services, which saw a 157% revenue increase. The AI business recorded an annual revenue run rate of $13 billion, which was up 175%. The company has more than doubled its data center capacity in the last 3 years, with the highest expansions made last year to ensure supporting the current cloud workloads and next-gen AI applications.

Azure AI Foundry, which is Microsoft Corp.’s (NASDAQ:MSFT) AI platform has 200,000+ monthly active users within just 2 months of its launch. It provides tools for AI development which includes support for OpenAI’s leading models and open-source models like DeepSeek’s R1. Similarly, Copilot Studio creates custom AI agents and has seen 160,000 organizations create 400,000 agents in just 3 months. Piper Sandler maintained an Overweight rating with a $520 price target on the company because they believe in its AI-driven cloud, productivity, and business offerings.

Columbia Seligman Global Technology Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q4 2024 investor letter, believing that Oracle is positioned to capitalize on the AI-driven cloud demand:

“Within software, the fund maintained an underweight position to Microsoft Corporation (NASDAQ:MSFT), which proved beneficial as share price for the company fell during the fourth quarter. Microsoft’s outlook for its Azure business came down slightly, which hampered the stock price at times during the quarter and, combined with losses on the Open AI business, led to a disappointing end to 2024. The company has guided its capital expenditure spending up slightly and investors continue to wait for additional monetization from the company’s large commitment to AI infrastructure spending. The fund continued to hold an overweight allocation to Oracle as we believe Oracle is positioned to be a major beneficiary of the AI rollout and has the potential to compete with other large cloud providers, such as Amazon, Alphabet and Microsoft. Oracle shares moved lower during the quarter and the stock suffered its worst day of the year in December, as the company narrowly underperformed analysts’ average estimates. Oracle’s business model remains strong as demand for computer power that can handle AI is increasing and the company’s revenues from its cloud infrastructure unit moved higher year over year.”