5 Best High Margin Growth Stocks to Buy Now

1. Microsoft Corporation (NASDAQ:MSFT)

Operating Margin: 42.05%

Number of Hedge Fund Holders: 258

Microsoft Corporation (NASDAQ:MSFT) is a well-managed software behemoth and one of the largest cloud infrastructure services providers. On July 26, the company released its fiscal 2022 fourth quarter earnings report. The company’s revenue grew 12.38% year-over-year to come in at $51.9 billion. Microsoft’s Azure cloud platform grew its 365 consumer subscriber base to 59.7 million during the quarter, while its Intelligent Cloud revenue grew to $20.9 million, up 20% year-over-year. Overall server and cloud services revenue grew by 26% year-over-year. Microsoft Corporation (NASDAQ:MSFT) reported that its fiscal 2022 revenue amounted to $198 billion, up 18% year-over-year, while its net income was $72.7 billion, up 19% year-over-year.

On July 27, Cowen analyst J. Derrick Wood revised his price target on Microsoft Corporation (NASDAQ:MSFT) to $320 from $330 and reiterated a buy-side ‘Outperform’ rating on the shares. The analyst sees Microsoft Corporation (NASDAQ:MSFT) capturing further market share in the current environment.

As of August 24, Microsoft Corporation (NASDAQ:MSFT) shares offer a forward dividend yield of 0.86% and the company has trailing 1-year free cash flow of $65.1 billion. The company also has a trailing twelve-month operating margin of 42.05%.

At the close of Q2 2022, 258 hedge funds held stakes in Microsoft Corporation (NASDAQ:MSFT) worth $56 billion, compared to 259 hedge funds in the previous quarter with stakes worth $65.6 billion. Fisher Asset Management raised its stake in Microsoft Corporation (NASDAQ:MSFT) by 3% during Q2, building a $7.36 billion position in the stock. The investment covers 5.21% of Ken Fisher’s 13F portfolio.

Here is what Carillon Tower Advisers had to say about Microsoft Corporation (NASDAQ:MSFT) in its first-quarter 2022 investor letter:

“Stock selection contributed the most while sector allocation was also positive. An underweight to communication services and an overweight to energy helped performance, while an underweight to consumer staples and an overweight to materials detracted. Stock selection was strong within healthcare and materials but was weak within information technology and industrials. Microsoft (NASDAQ:MSFT) reported positive results driven by personal computing strength, but analysts were especially positive on its growth outlook for its Azure cloud-computing services.”

You can also take a look at 10 Best Growth Stocks to Buy Right Now and 10 Best Tech Growth Stocks to Buy Right Now.

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