8 Best Robinhood Stocks to Buy According to Analysts

4. Microsoft Corporation (NASDAQ:MSFT)

Average Upside Potential: ~28.6%

Number of Hedge Fund Holders: 317

Analyst Bradley Sills from Bank of America Securities reiterated a “Buy” rating on Microsoft Corporation (NASDAQ:MSFT)’s stock, keeping a price objective of $510.00. The rating is backed by its strong performance and future growth potential. As per the analyst, the expected growth in Azure, fueled by Al workloads as well as large cloud deals, hints at the favorable outlook for the coming quarters. Microsoft Corporation (NASDAQ:MSFT)’s strategic emphasis on Al, mainly via Microsoft 365 Copilot, can fuel strong revenue growth, reinforcing the company’s position as a leader in applications and infrastructure. Therefore, the analyst’s confidence in the company’s ability to capitalize on the expanding Al market aids the rating.

Elsewhere, D.A. Davidson upped Microsoft Corporation (NASDAQ:MSFT)’s stock to “Buy,” increasing the price objective to $450 from $425. The analyst highlighted a more disciplined capital expenditure strategy as well as healthy positioning among several other mega-cap technology firms. The firm’s team opines that the company has pivoted to a more rational capex strategy. Therefore, Microsoft Corporation (NASDAQ:MSFT) streamlined the capex approach, enhancing margins and return on invested capital.

Mairs & Power, an investment advisor, released the Q4 2024 investor letter. Here is what the fund said:

“Unlike the dot-com companies that operated at the turn-of-the-century, many of today’s technology companies are established businesses with significant cash flows. We have argued, and continue to argue, that many of these investments are perfectly aligned with our investments process in that they embody durable competitive advantages, above-average growth prospects, and excellent management teams.

A perfect example is Microsoft Corporation (NASDAQ:MSFT), which has grown to become the largest holding in the Growth Fund. Microsoft has a near monopoly on the office software productivity market with its Microsoft Office Suite. The company’s Azure platform is a leader in cloud computing and has been steadily gaining share. Thanks to its Office and Azure products, the company is deeply embedded within many enterprise IT ecosystems. Therefore, it should be well-positioned to expand its presence within its customer base, as it rolls out premium-price AI solutions. The company is not resting on its laurels and plans on spending an astounding $80 billion in 2025 to build out AI data centers.”