5 Best Stocks to Buy for Your Child

2. Microsoft Corporation (NASDAQ: MSFT)

Number of Hedge Fund Holders: 251

Ranking 2nd on the list of 10 best stocks to buy for your child is Microsoft Corporation (NASDAQ: MSFT). The Washington-based tech behemoth specializes in software for laptops and desktops, but Microsoft Corporation is also engaged in cloud computing and artificial intelligence. The company also pays an annual dividend of $2.24 per share, making it one of the few prominent tech stocks that do so. The stock offers a dividend yield of 0.89%.

The company has a market cap of $1.91 trillion. MSFT stock has offered more than 35% returns to investors in the past twelve months. The company’s third-quarter revenue came in at $41.7 billion, up 19% from $35.02 billion in the same period in 2020. On June 2, KGI Securities initiated coverage on Microsoft Corporation with an Outperform rating, with a price target of $300 per share. MSFT stock currently trades at $253.81 per share.

Out of the hedge funds being tracked by Insider Monkey, hedge fund company Fisher Asset Management is a leading shareholder in Microsoft Corporation (NASDAQ: MSFT) with 23.9 million shares worth more than $5.65 billion.

In its Q1 2021 investor letter, Polen Capital, an investment management firm, highlighted a few stocks and Microsoft Corporation (NASDAQ: MSFT) was one of them. Here is what the fund said:

“We have written extensively about Microsoft in recent commentaries. It was our leading contributor last year and one of our largest weightings within the Portfolio. It continues to experience business momentum through several dominant, essential, and competitively advantaged businesses, like Office 365 and Azure. The markets it competes for are enormous, which gives the company the ability to compound at scale. In the past quarter alone, the company generated over $40 billion in revenue, representing a 17% growth rate. The inherent operating leverage in Microsoft’s business model continues and led to 34% earnings growth this past quarter. Despite the broad rotation we saw in the first quarter and Microsoft’s robust performance in 2020, we think its business fundamentals continue to exhibit strength, and the stock continues to reflect the fundamentals.”