1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ:MSFT) is an American multinational tech conglomerate. Its achievement stems from its unmatched leadership within the enterprise ecosystem, driven by its strategic emphasis on providing integrated solutions designed specifically for business needs. The company’s Intelligent Cloud segment, driven by Azure, has become the company’s primary growth driver, generating $91 billion of its $211 billion revenue in FY2024, accounting for 43% of the total. With a 22% share of the global cloud market, Azure ranks as the second-largest provider after AWS. Its hybrid cloud features, which effectively merge on-premises and cloud-based systems, have set it apart, particularly for enterprise customers. The segment’s 67% gross margin highlights the scalability and profitability of Microsoft’s cloud services, making it a central component of the company’s overall business strategy.
In fiscal Q1 2025, Microsoft Corporation (NASDAQ:MSFT) reported revenue of $65.6 billion, which showed a 16% growth from the same period last year. The company’s operating income came in at $30.6 billion, up 14% from the prior-year period. In addition, its revenue from server products and cloud services rose by 23%, primarily fueled by a 33% increase in Azure and other cloud services.
Microsoft Corporation (NASDAQ:MSFT)’s cash position also came in strong. The company ended the quarter with over $20.8 billion available in cash and cash equivalents, up from $18.3 billion in the same quarter last year. It generated over $34 billion in operating cash flow, growing from $30.5 billion in Q1 2024. This cash generation enabled the company to return $9 billion to shareholders through dividends and share repurchases.
On December 4, Microsoft Corporation (NASDAQ:MSFT) declared a quarterly dividend of $0.83 per share, which was in line with its previous dividend. It is one of the best dividend stocks on our list as the company has been growing its payouts for 19 consecutive years. The stock has a dividend yield of 0.78%, as of January 15.
At the end of Q3 2024, 279 hedge funds tracked by Insider Monkey held stakes in Microsoft Corporation (NASDAQ:MSFT), the same as in the previous quarter. These stakes have a total value of more than $91 billion. Among these hedge funds, Bill & Melinda Gates Foundation Trust was the company’s leading stakeholder in Q3.
Overall, Microsoft Corporation (NASDAQ:MSFT) ranks first on our list of the best NASDAQ dividend stocks. While we acknowledge the potential for MSFT to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. 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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