5 Most Promising QQQ Stocks According to Hedge Funds

1. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 259

Morgan Stanley is bullish on Microsoft Corporation (NASDAQ:MSFT). On February 13, Morgan Stanley analyst Keith Weiss maintained his $307 price target and an Overweight rating on Microsoft Corporation (NASDAQ:MSFT).

On January 24, Microsoft Corporation (NASDAQ:MSFT) posted earnings for the second quarter of fiscal 2023. The company’s revenue for the quarter was $52.75 billion, and the company reported an EPS of $2.32, outperforming EPS expectations by $0.01.

At the close of the fourth quarter of 2022, 259 hedge funds were long Microsoft Corporation (NASDAQ:MSFT) and held collective stakes worth $58.65 billion in the company. As of December 31, Bill & Melinda Gates Foundation Trust is the most prominent investor in the company and has a stake worth $9.41 billion. Microsoft Corporation (NASDAQ:MSFT) is the most promising QQQ stock according to hedge funds.

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.”

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