Baron Funds: “Microsoft (MSFT) is Positioned to Deliver 13%-15% Organic Growth Over the Next 3 Years”

Baron Funds, an asset management firm, published its “Baron Opportunity Fund” fourth quarter 2021 investor letter – a copy of which can be downloaded here. An increase of 3.16% was delivered by the fund’s institutional shares for the fourth quarter of 2021 but trailed the Russell 3000 Growth Index, which increased 10.89%, and the S&P 500 Index, which climbed 11.03%. For the full year 2021, the Fund gained 12.29% but underperformed the two indexes, which advanced 25.85% and 28.71%, respectively Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Baron Opportunity Fund, in its Q4 2021 investor letter, mentioned Microsoft Corporation (NASDAQ:MSFT) and discussed its stance on the firm. Founded in 1975, Microsoft Corporation (NASDAQ:MSFT) is a Redmond, Washington-based multinational technology conglomerate holding company with a $2.2 trillion market capitalization, and is currently spearheaded by its CEO, Satya Nadella. Microsoft Corporation (NASDAQ:MSFT) delivered a -10.67% return since the beginning of the year, while its 12-month returns are up by 30.42%. The stock closed at $300.43 per share on March 18, 2022.

Here is what Baron Opportunity Fund has to say about Microsoft Corporation (NASDAQ:MSFT) in its Q4 2021 investor letter:

“Shares of Microsoft Corporation, a cloud-software leader and provider of software productivity tools and infrastructure, rose during the quarter, following a strong earnings report highlighting solid demand for its broad product stack and continued momentum migrating its business to the cloud. Microsoft’s results continued to be strong across the board, with total revenue growing 20% in constant currency, beating Street estimates by 3%; an acceleration in Commercial Cloud revenue to 34% constant-currency growth; operating margins expanding to just under 45%; earnings growth of 23%; and free cash flow growth of 30%. We believe the company is positioned to deliver 13% to 15% organic growth over the next three years, underpinned by total addressable market expansion and continued market share gains across its disruptive cloud product portfolio.”

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Our calculations show that Microsoft Corporation (NASDAQ:MSFT) ranks 2nd on our list of the 30 Most Popular Stocks Among Hedge Funds. Microsoft Corporation (NASDAQ:MSFT) was in 262 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 250 funds in the previous quarter. Microsoft Corporation (NASDAQ:MSFT) delivered a -7.22% return in the past 3 months.

In March 2022, we also shared another hedge fund’s views on Microsoft Corporation (NASDAQ:MSFT) in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.

Disclosure: None. This article is originally published at Insider Monkey.