2. Microsoft Corporation (NASDAQ: MSFT)
Market Cap: $1.893 trillion
Number of Hedge Fund Holders: 258
Microsoft Corporation (NASDAQ: MSFT) has stated itself as “the leader in mixed reality” which refers to the combined technologies of augmented and virtual reality that can be deployed in the real world. Their flagship AR device is the HoloLens which was launched in 2015. Although the product was not a commercial success, it offered high quality AR and put the company on the path of developing the technology. Microsoft Corporation also released a catalogue of mixed reality experiences with the Windows Mixed Reality platform which includes games, 360 degree videos, social media, and live events. The company is set to launch a newer version in 2021 which will feature a custom holographic processing unit embedded with an AI coprocessor. The company also won a contract of the US Army for over 120,000 HoloLens headsets worth $21.88 billion, as reported by CNBC. Microsoft’s shares moved higher after this announcement with its price moving up by 1.7% at the end of March. With this contract, Microsoft Corporation (NASDAQ: MSFT) has gained the attention of its AR rivals and has landed one of the top spots in the 10 best augmented reality stocks to buy now list. The company’s revenue increased from $125.83 billion in 2019 to $143 billion at the end of 2020 while the reported earnings per share was $2.03.
Our calculations show that Microsoft Corporation ranks 2nd in our list of the 30 Most Popular Stocks Among Hedge Funds.
Baron Opportunity Fund, in their Q1 2021 investor letter, mentioned Microsoft Corporation (NASDAQ: MSFT). Here is what Baron Opportunity Fund has to say about Microsoft Corporation in their letter:
“Microsoft Corporation is a cloud-software Titan, and also discussed further in the Review and Outlook section above and the Top Purchases section below. Microsoft was a top contributor in the period because it trades at reasonable FCF and earnings valuations, has cloud and digital transformation tailwinds at its back, and reported an excellent December quarter, beating Street expectations by a wide margin. Microsoft’s results were strong across the board, with accelerating trends in Azure cloud computing and solid growth in its overall commercial cloud businesses. Azure accelerated to 48% constant-currency (“cc”) revenue growth from 47% the quarter before, and commercial cloud grew 32% cc, ahead of Street estimates at 26%. Microsoft’s profitability was also a significant beat, with operating income coming it at $17.9 billion, almost $3 billion ahead of Street estimates. Microsoft’s March quarter guidance also outstripped Street projections, with revenue growth of 16.5% versus the Street at 10.6%, and operating income over $1 billion ahead. CEO Satya Nadella began the earnings call with this proclamation: “What we are witnessing is the dawn of a second wave of digital transformation sweeping every company and every industry. Digital capability is key to both resilience and growth … Microsoft is powering this shift with the world’s largest and most comprehensive cloud platform … I’m energized by our increasing momentum and the expanding opportunity fueled by the structural change brought about by the rapid adoption of digital technology.””
