5 Best Tech Stocks to Invest in For Long Term

3. Microsoft Corp. (NASDAQ: MSFT)

Number of Hedge Funds: 258

Microsoft Corp. (NASDAQ: MSFT) is a Redmond-based technology company. It is renowned for having developed Windows, an operating system for computers. It also offers a host of other software-related services, like the Microsoft Office Suite, for productivity purposes. In the past two decades, Microsoft has expanded into the electronics manufacturing as well. It has a market cap of close to $2 trillion and posted more than $143 billion in annual revenue in June 2020. Founded in 1975, it is third on our list of 10 best tech stocks to invest in for long term gains.

Instead of charging a one-time premium for software services, Microsoft has moved towards a subscription-based model over the past few years, charging annual fees for product updates. The company owns a multi-billion stake in streaming platform Confluent that is set to go public very soon at a tentative valuation of more than $4 billion. On April 22, Microsoft announced that it had reached a deal with the United Kingdom government to provide them with a supercomputer for weather forecasting.

At the end of the fourth quarter of 2020, 258 hedge funds in the database of Insider Monkey held stakes worth $52 billion in the firm, up from 234 in the preceding quarter worth $42 billion.

Our calculations show that Microsoft Corporation (NASDAQ: MSFT) ranks 2nd in our list of the 30 Most Popular Stocks Among Hedge Funds.

Alger Spectra Fund, in their Q1 2021 investor letter, mentioned Microsoft Corporation (NASDAQ: MSFT). Here is what Alger Spectra Fund has to say about Microsoft Corporation in their Q1 2021 investor letter:

“Microsoft Corporation was among the top contributors to performance during the quarter. Microsoft is a Positive Dynamic Change beneficiary of corporate America’s transformative digitization. Microsoft’s enterprise cloud product, Azure, is rapidly growing and accruing market share. Recently, Microsoft reported that Azure grew 50% during the fourth quarter. This high unit volume growth is a primary driver of the company’s higher share price, but Microsoft’s operating execution has enabled notable margin expansion that has also helped to increase forward earnings estimates. Microsoft’s subscription-based software offerings and cloud computing services have not been entirely immune to the pandemic-related economic slowdown but are resilient because they enhance customers’ growth initiatives and help them to reduce costs. Additionally, investors appreciate Microsoft’s strong free cash flow generation and its return of cash to shareholders in the form of dividends and share repurchases.”