1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Shareholders In Q1 2024: 293
Microsoft Corporation (NASDAQ:MSFT) is another AI beneficiary. Its partnership with OpenAI has allowed the firm to diversify its generative AI platform and gain a foothold in the lucrative enterprise AI computing industry. Like its big tech peers, the average of 47 one year share ratings for Microsoft Corporation (NASDAQ:MSFT) is Strong Buy. The average share price target is $483, and the firm has beaten adjusted analyst EPS estimates in all four of its latest quarters. While other software players like Salesforce have suffered, RBC Capital maintained an Overweight rating on Microsoft Corporation (NASDAQ:MSFT) in May 2024 and it increased the share price target to $500 from $450. At the heart of RBC Capital’s strong bullishness was Microsoft Corporation (NASDAQ:MSFT)’s early lead in AI, which it believes stands in contrast with the firm’s Azure cloud computing platform that had had to catch up with Amazon’s AWS.
By the end of this year’s first quarter, 293 hedge funds part of Insider Monkey’s database had held a stake in Microsoft Corporation (NASDAQ:MSFT). Michael Larson’s Bill & Melinda Gates Foundation Trust owned the most valuable stake which was worth $15.3 billion.
When compared to Alphabet and Meta, Microsoft Corporation (NASDAQ:MSFT)’s forward P/E ratio of 30.96 makes it significantly overvalued compared to the broader markets. However, chief executive Satya Nadella is quite optimistic as he believes that Microsoft Corporation (NASDAQ:MSFT) is on track to earn $500 billion in revenue by 2030. Ithaka Group shared some of the reasons behind Microsoft Corporation (NASDAQ:MSFT)’s recent share price gains in its Q1 2024 investor letter. According to the fund:
Microsoft builds best-in-class platforms and provides services that help drive small business productivity, large business competitiveness, and public-sector efficiency. Microsoft’s products include operating systems, cross-device productivity applications, server applications, software development tools, video games, and business-solution applications. The company also designs, manufactures, and sells devices, including PCs, tablets, and gaming/entertainment consoles that all integrate with Azure, its cloud computing service. In the quarter Microsoft’s stock appreciated based on excitement surrounding the company’s positioning in the generative AI market and its ability to monetize the coming wave of corporate investment in supercomputing and AI, which will be through both Azure and Microsoft Copilot, the company’s new GenAI personal assistant.
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Disclosure: None.
