3) Microsoft Corporation (NASDAQ:MSFT)
Short % of Float (as of September 30): 0.80%
Number of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ:MSFT) is engaged in developing and supporting software, services, devices, and solutions worldwide.
Wall Street analysts believe that Microsoft Corporation (NASDAQ:MSFT) continues to leverage its healthy position in cloud computing and artificial intelligence to fuel growth. They are quite optimistic about Microsoft’s Azure cloud platform, with acceleration expected in the latter half of 2024. Also, Microsoft Corporation (NASDAQ:MSFT) has been investing heavily in AI computing infrastructure, primarily in housing clusters of GPUs essential for the growing demand in AI compute. Over the long term, the company’s leading position in AI and extensive portfolio are expected to act as potential tailwinds.
While Microsoft’s Office 365 Commercial should continue to aid its growth trajectory, vendor consolidation and ARPU growth through upgrades are expected to act as primary tailwinds. Microsoft Corporation (NASDAQ:MSFT)’s AI strategy and partnerships are also expected to act as key drivers for future growth. Moreover, Wall Street remains optimistic about partnerships with companies like Elastic, potentially aiding in winning government customers and large enterprise penetration.
Microsoft Corporation (NASDAQ:MSFT)’s AI strategy and partnerships should lead to unique monetization opportunities across products such as Azure and CoPilots. Wells Fargo & Company raised its price objective from $500.00 to $515.00, giving an “Overweight” rating on 31st July.
Generation Investment Management, an investment management firm, released its second quarter 2024 investor letter. Here is what the fund said:
“Generative AI’s hunger for power has increased disproportionately with its intelligence. According to one estimate, OpenAI’s GPT-4 required 50 gigawatt hours (GWh) of electricity to train, much more than the 1.3 GWh needed for GPT-3.3 And then AI requires even more power when it is put to use (so called ‘inference’). Some of the latest trends worry us. Microsoft Corporation (NASDAQ:MSFT) appears to be slipping in its ESG goals, with its greenhouse gas emissions rising again last year, as it invests in becoming a big player in AI. It is struggling in particular to curb its Scope 3 emissions in the capital goods category – nowhere more so than in the activity associated with the construction of data centres: both the embedded carbon in construction materials like steel and cement, as well as the emissions from the manufacturing of hardware components such as semiconductors, servers and racks. Google’s emissions have risen by close to 50% in the past five years.
We feel it is worth dwelling on Microsoft for a few moments, since we suspect you will be hearing a lot more about the relationship between AI and sustainability in the coming months. The bottom line is that we continue to see Microsoft as a sustainability leader. In the case of Scope 2 emissions, the company covers 100% of its electricity use with purchases of renewable energy. Crucially, though, the majority of this green energy is directly sourced via power purchase agreements, which bring new renewable capacity to the grid. Microsoft is also committed to operating 24/7 on renewable power by 2030, a policy that will help bring energy storage onto the grid as well…” (Click here to read the full text)
