Baron Funds, an investment management firm, released its “Baron Durable Advantage Fund” first quarter 2023 investor letter, a copy of which can be downloaded here. The Baron Durable Advantage Fund gained 16.0% during the first quarter, compared favorably to its S&P 500 benchmark which earned a 7.5% return for the same period. Spare some time to check the fund’s top 5 holdings to know more about their top bets for 2023.
In its Q1 2023 investor letter, Baron Durable Advantage Fund mentioned Microsoft Corporation (NASDAQ:MSFT) and explained its insights for the company. Founded in 1975, Microsoft Corporation (NASDAQ:MSFT) is a Santa Clara, California-based multinational technology company with a $2.4 trillion market capitalization. Microsoft Corporation (NASDAQ:MSFT) delivered a 36.26% return since the beginning of the year, while its 12-month returns are up by 29.17%. The stock closed at $326.79 per share on June 09, 2023.
Here is what Baron Durable Advantage Fund has to say about Microsoft Corporation (NASDAQ:MSFT) in its Q1 2023 investor letter:
“Baron Durable Advantage Fund focuses on businesses with these characteristics. Microsoft, our largest holding, is a good case study of a business’s ability to adapt and pivot after years of suffering the consequences of a stale management team that was resting on its laurels. The company’s de facto monopoly position (Microsoft Windows + Office) in enterprise desktop and worker productivity suites in the client-server world made the company complacent and reluctant to take risks and continue to innovate. The stock languished for almost 15 years while Apple, Amazon, Google, and Facebook led the transition to mobile. Satya Nadella finally took the reins in 2014 and immediately changed the company’s focus from the Windows-centric, on-prem legacy businesses to a cloud-first platform that could be accessed and used from any (mobile) device anywhere in the world. He also made the decision to open the platform to third parties, such as Linux, even though it was likely to hurt Microsoft’s core Windows franchises. Nadella was willing to risk the high-margin on-prem business, recognizing that the world was going to change, and that cloud computing was going to be the future. This bold decision (and a massive multi-year investment) has reinvigorated the company and its stock, with Microsoft Azure, its cloud infrastructure business, surpassing $55 billion in annualized recurring revenue in the last quarter, while still growing 38% year-over-year. The price of Microsoft stock has increased seven-fold since Satya Nadella took over as CEO.”
Image by Tawanda Razika from Pixabay
Our calculations show that Microsoft Corporation (NASDAQ:MSFT) tops our list of the 30 Most Popular Stocks Among Hedge Funds. Microsoft Corporation (NASDAQ:MSFT) was in 289 hedge fund portfolios at the end of the first quarter of 2023, compared to 259 funds in the previous quarter. Microsoft Corporation (NASDAQ:MSFT) delivered a 31.46% return in the past 3 months. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters Q1 2023 page.
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Disclosure: None. This article is originally published at Insider Monkey.
