5 Most Profitable Stocks of the Last 20 Years

3. Microsoft Corporation (NASDAQ:MSFT)

Average Net Income: $24.09 billion

Number of Hedge Fund Holders: 259

For fiscal 2022, Microsoft Corporation (NASDAQ:MSFT) generated an annual net income of $72.74 billion. Microsoft Corporation (NASDAQ:MSFT) has generated an annual net income of $24.09 billion, on average, over the past 20 years. The stock is placed third on our list of the most profitable stocks of the last 20 years.

At the end of the fourth quarter of 2022, Microsoft Corporation (NASDAQ:MSFT) was held by 259 hedge funds. These funds held collective positions worth $58.65 billion in the company. As of December 31, Bill & Melinda Gates Foundation Trust is the largest shareholder in the company and has disclosed a position worth $9.41 billion.

Here is what Polen Capital had to say about Microsoft Corporation (NASDAQ:MSFT) in its fourth-quarter 2022 investor letter:

“In the case of Microsoft Corporation (NASDAQ:MSFT), the company is performing very well. Azure now represents nearly 25% of the total business and continues to compound at a higher rate. Although growth is moderating a bit recently (as it is for AWS and Google Cloud Platform as well), these three platforms collectively generated more than $140 billion in revenue during the last 12 months and are still growing at a healthy rate. Further, Microsoft Cloud, or commercial cloud (which includes Azure and other cloud services, Office 365 Commercial, the commercial portion of LinkedIn, Dynamics 365, and other cloud properties) continues to grow roughly 30% and is now about half the business. Mathematically, commercial cloud could decelerate to 20% growth with all other segments decelerating to zero growth and total company revenue growth would still be at least double digits. We believe Microsoft is positioned to compound underlying earnings per share at a midteens rate over the next five years. At 22x earnings, we felt the valuation was attractive and that it should be a large position.”