5 Cheap NASDAQ Stocks to Buy

1. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 269

Microsoft Corporation (NASDAQ:MSFT) ranks #1 on our list of 11 Cheap NASDAQ Stocks to Buy given 269 hedge funds in our database owned shares at the end of Q3. Like many other big tech stocks, Microsoft Corporation (NASDAQ:MSFT) hasn’t done well this year given macroeconomic headwinds.

Nevertheless, the company could be cheap in the long term if it succeeds in unlocking the potential of AI. Over the years, Microsoft Corporation (NASDAQ:MSFT) has invested a lot in the technology and the investments could help the company grow earnings in the long term if its anything like OpenAI’s ChatGPT which Microsoft Corporation (NASDAQ:MSFT) also invested in during 2019.

Baron Funds commented on Microsoft Corporation (NASDAQ:MSFT) in a Q3 2022 investor letter,

Shares of Microsoft Corporation (NASDAQ:MSFT) pulled back with the overall software industry on the back of macroeconomic issues, including inflation concerns and rising interest rates. The company reported another strong quarter, highlighted by total revenues growing 16% on a constant currency basis and Microsoft Cloud revenues, now 48% of total sales, growing 33%, with Azure (Microsoft’s infrastructure cloud) growing 46%. These results were driven by strong demand for large commercial cloud contracts, as more businesses are standardizing on Microsoft’s platform and the company is signing larger and longer deals. Initial fiscal year 2023 guidance calls for healthy double-digit revenue and operating income growth. Both foreign exchange and personal computer headwinds were contemplated in the guidance and have continued to worsen, but we have conviction in the company’s strong competitive positioning, durable growth drivers, and margin expansion opportunity over the mid- to long term.

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