5 Best Software Stocks to Buy Now According to Coatue Management’s 13F Portfolio

1. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 306
Coatue Management’s Equity Stake: $1.21 Billion

Microsoft Corporation (NASDAQ:MSFT) is one of the best software stocks to buy now according to Coatue Management’s 13F portfolio, as a market leader in the sector. Microsoft Corporation (NASDAQ:MSFT) offers an array of software suites, including Office, Exchange, SharePoint, Microsoft Teams, office 365 Security and Compliance, Microsoft Viva, and Microsoft 365 Copilot. 

Microsoft Corporation (NASDAQ:MSFT) remains one of the top software plays for gaining exposure to the artificial intelligence revolution. The company has already invested $13 billion in ChatGPT parent OpenAI. The stock is up by over 53% for the year. Coatue Management trimmed its stake in Microsoft Corporation (NASDAQ:MSFT) by 28% in Q3 2023 to $1.21 billion.

Out of the 910 hedge funds that Insider Monkey tracks, 306 of them had stakes in Microsoft Corporation (NASDAQ:MSFT) in Q3 2023. The largest stakeholder of the firm was Bill & Melinda Gates Foundation Trust , which Michael Larson manages. They had a stake worth $12.4 billion.

In its Q3 2023 investor letter, White Brook Capital Partners referenced Microsoft Corporation (NASDAQ: MSFT). Here is what it said:

“The magnificent seven, that underpin the S&P 500 performance, which includes Microsoft Corporation (NASDAQ:MSFT), now comprise almost 30% of the market capitalization of the S&P500. At least three of the seven stocks have heightened downside risk and suffer from already high penetration, weakening end markets, competitive risk, and lofty valuation. They have been remarkably resilient to increased interest rates and the potential for slowing growth. Small and midcap stocks, on the other hand, have been systemically penalized by fears of recession and continue to price that eventuality even as significantly better outcomes have become more probable. Today, it’s relatively easy to find attractive investments in this segment.”

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