In this article, we discuss billionaire Ken Fisher’s top 15 stock picks heading into 2025.
Ken Fisher is the founder of Fisher Asset Management, a financial adviser that he started nearly five decades ago. The firm oversees over $240 billion from more than 150,000 private investors.
Fisher said, “I’ve gone to cash three times in my career; in 1987 before the crash, before the 1990 bear market and in the early 2000s, before the dot-com crash. But I missed the 2007-2009 bear market because I didn’t believe, and don’t believe, mortgages could cause what they are blamed for having caused.”
Besides focusing on long-term investments, Fisher also believes in spreading out investments to reduce risk. Fisher Asset Management is highly diversified, with a portfolio value of about $244 billion. While technology stocks account for 31.8% of the portfolio, the independent money management firm is also heavily invested in the services sector, accounting for 14.6% of the portfolio. Other significant holdings are in the financial services, healthcare, and basic materials sectors.
In the past year, Fisher’s firm made a 32.18% return, mainly because it invested a lot in tech stocks, especially those benefiting from the AI boom. While other managers are selling tech stocks due to high valuations, Fisher’s firm is buying more, especially in companies making AI chips.
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Even though the overall market is at all-time highs, Fisher says there’s no need to worry. He believes that just because the market is high now, it doesn’t predict the future. He expects the market to keep going up as long as the economy and other key factors get better.
“Bull markets hit new highs on an ongoing basis as soon as they have recovered from the prior bear market and hit their first all-time high in that new bull market. They keep doing that over and over again and eventually you do get another bear market and then again get another bull market. Bull markets, not always, are usually significantly bigger and longer than bear markets, significantly,” Ken Fisher said.
Ken Fisher’s portfolio is heavily invested in the “magnificent seven” stocks, based on the belief that the stocks are well poised to continue outperforming the overall market. According to Fisher, growth stocks will continue outperforming value stocks amid the prevailing economic conditions.
“If you think the market is going up, you should expect the magnificent seven to continue to do well. Will they necessarily do better than everything? No, but they never actually did. The fact is they did better as a group than most groups you could find. I think that will continue to be the case because I am optimistic on the market as a whole moving forward”, Fisher said in a video interview.
Given this positive economic outlook, let’s explore Ken Fisher’s top 15 stock picks for 2025.
Ken Fisher of Fisher Asset Management
Our Methodology
We looked through Fisher Asset Management’s portfolio to find Ken Fisher’s top 15 stock picks for 2025. We focused on his biggest investments and ranked the stocks from smallest to largest based on the firm’s stake at the end of Q3 2024.
At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Billionaire Ken Fisher’s Top 15 Stock Picks Heading into 2025
15. Exxon Mobil Corporation (NYSE:XOM)
Fisher Asset Management’s Equity Stake: $3.42 Billion
Number of Hedge Funds Holding Stakes: 86
Exxon Mobil Corporation (NYSE:XOM) is one of the world’s biggest oil and gas companies. It operates in 60 countries and works in areas like exploration, production, refining, manufacturing, and chemicals. The stock is up by more than 15% for the year despite oil prices plunging below the $70 a barrel level.
Exxon Mobil Corporation (NYSE:XOM)’s competitive edge stems from its diversified world-class asset portfolio. The vast business portfolio was the catalyst behind solid third-quarter results. It delivered industry-leading earnings of $8.6 billion on November 1, 2024. Cash flow from operating activities was $17.6 billion, and free cash flow was $11.3 billion. Exxon Mobil Corporation (NYSE:XOM) is one of the companies looked upon in the energy sector ahead of Donald Trump’s second term. Trump looks to be friendlier to traditional oil and gas production, which would benefit oil drillers and natural gas and oil service providers.
The company’s new efforts to reduce carbon dioxide emissions are also expected to boost earnings. By 2027, the oil giant plans to invest about $20 billion in various projects like carbon capture and storage, biofuels, lithium, and hydrogen. By 2050, Exxon Mobil Corporation (NYSE:XOM) expects its low-carbon businesses to have a $6 trillion market, with long-term revenue potential in the hundreds of billions of dollars.
14. Caterpillar Inc. (NYSE:CAT)
Fisher Asset Management’s Investment Equity Stake: $3.50 Billion
Number of Hedge Funds Holding Stakes: 50
Caterpillar Inc. (NYSE:CAT) makes locomotives, power solutions, and heavy machinery. It’s the largest heavy equipment maker in the world. Its products are sold by 160 dealers in over 2,700 locations worldwide. The stock is up by more than 38% for the year, attributed to a period of robust performance of the industrial behemoth.
Caterpillar Inc. (NYSE:CAT) aims to strengthen its product line, incorporate sustainability, and lead in pricing and innovation for long-term profit growth. On November 7, 2024, Caterpillar Inc. (NYSE:CAT) announced it successfully tested its fully autonomous Cat® 777 truck at Luck Stone’s Bull Run plant in Virginia. This is a big step in providing autonomous hauling for quarries and aggregates. It also shows progress in its partnership with Luck Stone.
While the global economy has been under pressure amid the high interest rate environment, Caterpillar’s core business has remained resilient. The company delivered solid third-quarter results on October 30, 2024. Revenue logged in at $16.78 billion as adjusted earnings per share came in at $5.17.
Caterpillar Inc. (NYSE:CAT)’s capital allocation strategy demonstrates its commitment to returning value. The company has increased dividends in each of the last 30 years, maintaining an impressive 91-year dividend streak. The stock yields 1.40% in dividends, affirming why it is one of billionaire Ken Fisher’s top 15 stock picks heading into 2025 for passive income.
Here is what Diamond Hill Large Cap Strategy said about Caterpillar Inc. (NYSE:CAT) in its Q3 2024 investor letter:
“Other top Q3 contributors included HCA Healthcare and Caterpillar Inc. (NYSE:CAT). Heavy construction machinery manufacturer Caterpillar has held up better than industry peers against a challenging macroeconomic backdrop and a generally slowing construction environment.”
13. JPMorgan Chase & Co. (NYSE:JPM)
Fisher Asset Management’s Equity Stake: $3.54 Billion
Number of Hedge Funds Holding Stakes: 105
JPMorgan Chase & Co. (NYSE:JPM) is a big financial company offering deposit, investment, and lending products. It also provides investment banking services. It operates in 100 countries and is the largest bank in the US. It’s one of Ken Fisher’s top stock picks for 2025, benefiting from strong revenues and earnings.
Banks may become more constrained by relatively high interest rates. However, JPMorgan Chase & Co. (NYSE:JPM) has not been negatively impacted by the high rates that have been a feature of the American economy. The bank delivered better-than-expected third-quarter results on October 11, 2024. Revenue climbed 6% year over year to $43.32 billion as net interest income rose 3% to $23.5 billion, attributed to the high interest rate environment.
The bank’s long-term outlook remains positive, especially on Republicans sweeping the just-concluded US elections. Republican administrations have always been friendlier to businesses. Likewise, they push for a looser regulatory environment that encourages IPO mergers and acquisitions. JPM’s investment banking unit should be one of the beneficiaries. Additionally, JPM should benefit from Trump’s policies that promote bank borrowing.
Carillon Tower Advisers Carillon Eagle Growth & Income Fund stated the following regarding JPMorgan Chase & Co. (NYSE:JPM) in its first quarter 2024 investor letter:
“JPMorgan Chase & Co. (NYSE:JPM) contributed positively to performance following solid financial results and positive guidance for the remainder of 2024. Moreover, growing chatter around rising capital markets activity likely contributed to the stock’s strong performance relative to other banks. Recall that JPMorgan has a robust capital markets franchise.”
12. Meta Platforms, Inc. (NASDAQ:META)
Fisher Asset Management’s Equity Stake: $3.76 Billion
Number of Hedge Funds Holding Stakes: 235
Meta Platforms, Inc. (NASDAQ:META) is a communication service company that develops products that enable people to connect and share with friends and family. As the owner of Facebook, Instagram, WhatsApp, and Messenger, the company generates 98% of its revenues from digital advertising. Likewise, the company’s core digital advertising business is booming amid a resilient economy on lower interest rates.
On October 30, Meta Platforms, Inc. (NASDAQ:META) reported its third-quarter results. The company made $40.59 billion in revenue, up 19% from last year. Its operating margin increased to 43%. User engagement grew, with 3.29 billion daily active users across its apps, a 5% rise. The average ad price also went up by 11%.
Meta Platforms, Inc. (NASDAQ:META) is putting more money into generative AI with its large language model, Llama. This is part of their plan to make their apps more engaging. More engagement means more advertisers, which leads to more ad revenue. Analysts expect Meta’s earnings to grow at an annual rate of 25% and revenue by 16% from 2023 to 2026. The growth will come from their apps, which have 3.29 billion daily users, and new augmented and virtual reality products.
Alger Spectra Fund stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its Q3 2024 investor letter:
“Meta Platforms, Inc. (NASDAQ:META) operates the world’s largest social network, with over 3 billion monthly active users. The company generates more than 95% of its revenue from advertising, evenly split between North America and international markets. During the quarter, shares contributed to performance following the release of strong fiscal second quarter operating results, with revenues and earnings beating analyst estimates. Management also raised their fiscal 2024 revenue guidance, citing improved advertising monetization. CEO Mark Zuckerberg stated that AI has played a key role in these successes, as the company is leveraging AI to enhance targeting, measurement, ranking, and ad delivery. Higher user engagement, driven by video ranking, content recommendations, and single video views, has also supported growth. Additionally, the optimization of ad placements within videos and automation of ad campaigns are further boosting monetization.”
11. The Home Depot, Inc. (NYSE:HD)
Fisher Asset Management’s Equity Stake: $3.82 Billion
Number of Hedge Funds Holding Stakes: 82
The Home Depot, Inc. (NYSE:HD) is the largest home improvement store in the world. It has about 475,000 employees and over 2,300 stores in the U.S., Canada, and Mexico. It sells building materials, home improvement products, lawn and garden items, and décor. A weak housing market has hurt sales, but things are getting better as interest rates drop and home sales pick up.
Improving macroeconomics was the catalyst behind The Home Depot, Inc. (NYSE:HD)’s better-than-expected third-quarter results on November 12, 2024. The company delivered a 6.6% increase in sales to $40.2 billion as net earnings came in at $3.6 billion or $3.67 a share. The company remains in a strong position amid a pent-up demand for home renovations heading into 2025.
With The Home Depot, Inc. (NYSE:HD) controlling a 28% market share in the home improvement space, it should benefit from increased house remodeling. Home improvement and remodeling should improve as mortgage rates and borrowing rates drop as the Federal Reserve cuts the benchmark rate.
Earlier this year, The Home Depot, Inc. (NYSE:HD) acquired SRS Distribution, a well-known distributor of building supplies. SRS Distribution will help Home Depot capitalize on a possible surge in new home sales and expand its exposure to the professional market, where it already has a competitive edge over rivals.
Carillon Eagle Growth & Income Fund stated the following regarding The Home Depot, Inc. (NYSE:HD) in its Q3 2024 investor letter:
“While Home Depot, Inc.’s (NYSE:HD) recent reported earnings were somewhat tepid, the market seems to be pricing in an inversion of the company’s sales, driven by lower interest rates. Home Depot reported its seventh consecutive quarter of same-store sales declines, giving back substantial gains that it enjoyed during the pandemic. High mortgage rates have also put a damper on existing home sales. People typically spend the most on home repairs and improvements in years when they buy or sell houses, often conducting both transactions in the same year.”
10. Walmart Inc. (NYSE:WMT)
Fisher Asset Management’s Equity Stake: $3.85 Billion
Number of Hedge Funds Holding Stakes: 88
Walmart Inc. (NYSE:WMT) is a global retailer with discount stores, grocery stores, and hypermarkets in the U.S. and 19 other countries. It operates in retail, wholesale, e-commerce, and other sectors worldwide. It is one of the companies benefiting from a changing retail landscape as inflation cools and interest rates go down.
As consumer purchasing power improved, the retailer delivered solid fiscal third-quarter results on November 19, 2024. Sales in the quarter were up 5.5% to $169.6 billion as operating income increased 8.2% to $6.7 billion. E-commerce sales were up 27% year over year, driven by a 22% increase in the US. Management says this strong performance is due to more people using store pickup, delivery services, advertising, and the marketplace.
Walmart Inc. (NYSE:WMT) also benefits from leveraging artificial intelligence solutions and other machine learning models to know and understand its customers. Shopper traffic was up by 3% in the third quarter, resulting in higher store volumes. Higher store volumes come on the retailer succeeding in providing customers with products and services they need while also appealing to the higher income customers.
9. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Fisher Asset Management’s Equity Stake: $3.90 Billion
Number of Hedge Funds Holding Stakes: 107
Advanced Micro Devices, Inc. (NASDAQ:AMD) is a semiconductor company that offers x86 microprocessors and graphics processing units (GPUs). It’s been an unforgettable year for the semiconductor specialist as its stock is down by about 1% for the year. The underperformance stems from concerns that the company needs to catch up amid the AI frenzy.
Advanced Micro Devices, Inc. (NASDAQ:AMD) reported healthy year-over-year growth for its third quarter on October 29, 2024. Revenue was up 18% year over year to $6.8 billion as adjusted earnings shot up 31% to $0.92 a share. Nevertheless, Wall Street was unimpressed with its progress in the artificial intelligence chip market. A weaker-than-expected guidance has also not helped the stock’s sentiments in the market
Advanced Micro Devices, Inc. (NASDAQ:AMD) remains one of billionaire Ken Fisher’s top 15 stock picks heading into 2025, witnessing solid demands for its newly launched MI325X GPU. The company is also on course to launch the next generation M1350 Series chip in the second half of the following year to take advantage of the strong demand for AI chips.
Advanced Micro Devices, Inc. (NASDAQ:AMD) has a smaller data center GPU business than Nvidia, but both can thrive in the market. The AI GPU market could be worth $500 billion by 2028, offering big opportunities for AMD. Their Epyc server CPUs are also popular with cloud service providers, providing more growth potential.
Columbia Threadneedle Global Technology Growth Strategy stated the following regarding Advanced Micro Devices, Inc. (NASDAQ:AMD) in its Q2 2024 investor letter:
“Shares of Advanced Micro Devices, Inc. (NASDAQ:AMD) lagged the market after the company reported earnings results that, while generally strong, left the market wanting more. The company reported AI revenue of ~$600 million and increased its forward-looking outlook for AI revenue growth, but shares took a breather, as results missed elevated expectations after the stock’s strong performance. Despite the stock’s underperformance during the quarter, the company’s AI story remains very much intact. The growth outlook for the company is supported by better cloud demand, enterprise recovery and continued share gains ahead of the company’s new AI product launch.”
8. Broadcom Inc. (NASDAQ:AVGO)
Fisher Asset Management’s Equity Stake: $4.04 Billion
Number of Hedge Funds Holding Stakes: 128
Broadcom Inc. (NASDAQ:AVGO) is a technology company that designs, develops, and supplies various semiconductor devices. The company benefits from strong demand for its networking products, which include AI accelerators, AI networking solutions, and optical lasers. It’s also staring at tremendous opportunities for growth, given that its solutions are crucial in addressing the need for an increasing AI workload and data centers.
Broadcom Inc. (NASDAQ:AVGO) sells various semiconductor products, including those for the computer networking, storage, and broadband sectors related to artificial intelligence. Broadcom’s revenue base should receive a boost as AI workload increases and demand for fast data centers increases. The company is projected to generate $12 billion in AI revenues in 2024.
Its acquisition of VMware has gone a long way in strengthening its infrastructure software solutions. VMware’s well-known virtualization software allows IT companies to run multiple operating systems on a single server. Likewise, Broadcom Inc. (NASDAQ:AVGO) has succeeded in securing stable revenue streams from Alphabet and Meta Platforms for virtualization software.
7. Eli Lilly and Company (NYSE:LLY)
Fisher Asset Management’s Equity Stake: $4.48 Billion
Number of Hedge Funds Holding Stakes: 106
Eli Lilly & Company (NYSE:LLY) is a biotechnology company that discovers, develops, and sells human pharmaceuticals. LLY’s main products are Verzenio for cancer, Mounjaro, Zepbound, Jardiance, Trulicity, Humalog, and Humulin for heart and metabolic conditions, and Taltz and Olumiant for immune system issues.
It is one of the big players in the sector owing to solid demand for its diabetes and weight loss drugs, which have propelled revenue and earnings growth. In the first nine months of the year, the stock was up by 62%. Nevertheless, the stock took a hit as the company reported a slight pullback in its full-year guidance.
On October 30, 2024, Eli Lilly & Company (NYSE:LLY) said it expects revenues of between $45.4 billion and $46 billion, down from the previous guidance of $45.4 billion to $46.4 billion. Despite the minor adjustment, LLY’s product lineup remains strong. Mounjaro and Zepbound are some of the most sought-after diabetes and weight loss drugs.
In the first half of the year, Mounjaro brought in $4.9 billion in revenue, up from $1.5 billion over the same period last year. Zepbound, approved for weight loss in obese adults, is also in high demand, and Eli Lilly & Company (NYSE:LLY) is working hard to meet it. The company is building a new $4.5 billion advanced manufacturing and drug development center to keep up with the growing demand.
The addressable market for weight loss treatments is poised to hit $100 billion by 2030. Therefore, Eli Lilly & Company (NYSE:LLY) has tremendous opportunities with its current pipeline, even as it works on new drugs.
Baron Funds stated the following regarding Eli Lilly and Company in its “Baron Health Care Fund” second quarter 2024 investor letter:
“Shares of global pharmaceutical company Eli Lilly and Company (NYSE:LLY) increased on continued investor enthusiasm around GLP-1 drugs for diabetes and obesity. We remain shareholders. Lilly’s Mounjaro/Zepbound not only offers superb blood sugar control for diabetics but can drive 20%-plus weight loss and likely improve cardiovascular outcomes in both diabetic and non-diabetic obese patients. Lilly is developing next-generation drugs, including retatrutide, which drives approximately 25% weight loss, and orforglipron, a daily pill that produces approximately 15% weight loss. In the U.S. alone, there are 32 million Type 2 diabetics and an additional 105 million obese patients who we estimate would qualify for GLP-1 drugs. Although supply and access are limited near term, we think GLP-1 drugs will become the standard of care for both diabetes and obesity and will become a $150 billion-plus category. We see Lilly setting a high efficacy bar and capturing significant long-term market share. We think the adoption of GLP-1s will drive Lilly to triple total revenue by 2030.”
6. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Fisher Asset Management’s Equity Stake: $4.99 Billion
Number of Hedge Funds Holding Stakes: 158
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is a technology giant that dominates the advanced manufacturing of semiconductors. The company plays a crucial role in the supply chain of all leading chip companies. Consequently, it is one of the companies that have benefited the most from the outsourcing of chip production by semiconductor companies.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)’s competitive edge stems from its ability to invest in cutting-edge technology to manufacture the most advanced chips. Consequently, it controls about 62% of the market share as it produces chips for Advanced Micro Devices, Qualcomm, Apple, and Nvidia. The strong partnership catalyzed the company’s 28% revenue growth in the first half of 2024.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) also benefits from the growing demand for leading logic chips that power artificial intelligence models and 5G mobile networks. Strong demand for its chips using the three-nanometer semiconductor manufacturing process affirms its growth and long-term prospects. While the market for chips using 3nm technology is projected to grow from $1.4 billion in 2023 to $26.5 billion by 2032, there is a tremendous opportunity for growth.
Management says that the demand for AI server processors, including GPUs and other chips used for AI training, is skyrocketing. They expect the revenue from these chips to be more than three times higher for the whole year.
5. Alphabet Inc (NASDAQ:GOOGL)
Fisher Asset Management’s Equity Stake: $8.27 Billion
Number of Hedge Funds Holding Stakes: 202
Alphabet Inc. (NASDAQ:GOOGL) earns most of its money from ads on Google and YouTube, and it also sells apps and in-app purchases. Despite pressure from regulators to sell Google Chrome, Alphabet remains strong with many growing segments like Google Cloud, Google Pay, and the Google Store.
Alphabet Inc. (NASDAQ:GOOGL) is famous for its Google search engine, which holds 90% of the market. The company is also making progress in AI. Pixel phone users can highlight items on the screen for AI-assisted searches, and 25% of Google’s code is now written by AI. Google Cloud helps businesses create AI apps, and Waymo; Alphabet’s self-driving car service, gives over 150,000 rides every week. These AI efforts helped Alphabet earn $88.3 billion in Q3, a 15% increase, with net income up 33% to $26.3 billion.
The fact that 15 of Alphabet Inc. (NASDAQ:GOOGL)’s products and services are used by over 500 million people affirms its dominance as an internet company. The vast business empire generated $17.6 billion in free cash flow in the third quarter. Consequently, it remains one of billionaire Ken Fisher’s top 15 stock picks heading into 2025 as it returns value to shareholders through buybacks and dividend payouts.
4. Amazon.com, Inc. (NASDAQ:AMZN)
Fisher Asset Management’s Equity Stake: $8.32 Billion
Number of Hedge Funds Holding Stakes: 286
Amazon.com, Inc. (NASDAQ:AMZN) is a company that built its name as a retail giant on the sale of consumer products and advertising. It has since diversified its business empire with investments in cloud computing and the sale of electronic devices. About 38% of online sales in the US happen in the company’s online store. Consequently, the company is well-positioned to benefit from the growth of e-commerce industry sales.
Amazon.com, Inc. (NASDAQ:AMZN) is succeeding in fending off competition in online sales. The launch of ultra-cheap products through Amazon Haul has strengthened its edge in attracting more sales through the mobile-only marketplace.
Amazon.com, Inc. (NASDAQ:AMZN) also boasts the largest cloud computing unit. Amazon Web Services is emerging as a key growth and profit driver amid the digital revolution. Grandview Research expects the cloud market to grow by about 21% annually by 2030. Likewise, AMZN should be the biggest beneficiary as it controls 33% market share in the segment.
Amazon.com, Inc. (NASDAQ:AMZN) also invests in artificial intelligence solutions to enhance its cloud computing solutions. Consequently, AWS sales rose by 19% in the third quarter to $27.5 billion. The increase came as the company rolled out new services, improvements, and solutions for its cloud unit and e-commerce site.
Parnassus Core Equity Fund stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q3 2024 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN) ended the quarter slightly down, so our underweight position contributed to relative return. We added the stock after the share price declined significantly, and the timing of the purchase proved beneficial: after we initiated the position, shares rebounded strongly as sentiment around the consumer improved.”
3. NVIDIA Corporation (NASDAQ:NVDA)
Fisher Asset Management’s Equity Stake: $11.75 Billion
Number of Hedge Funds Holding Stakes:193
NVIDIA Corporation (NASDAQ:NVDA) is one of billionaire Ken Fisher’s top 15 stock picks heading into 2025 amid the artificial intelligence revolution. The company has made a name for itself in the development of some of the most sought-after graphics processing units (GPU). The GPUs are in solid demand owing to their use in powering AI models.
NVIDIA Corporation (NASDAQ:NVDA) logged record revenue of $35.1 billion in its third quarter, a 94% year-over-year increase thanks to strong AI demand. It now expects its fourth-quarter revenue to increase by 70% to $37.5 billion. It also expects the new Blackwell architecture to spur revenue growth in 2025.
NVIDIA Corporation (NASDAQ:NVDA) is doing well in data center chips and gaming graphics cards, controlling 88% of the graphics card market. Strong GPU demand has led to record revenue and earnings, with the stock up 187% this year. NVDA is using its extra revenue to invest in companies like SoundHound and Applied Digital, preparing for the future of AI. It also owns significant stakes in Applied Digital, a growing designer and builder of data centers. The investments are part of NVDA’s push to safeguard its future amid the AI revolution.
2. Microsoft Corporation (NASDAQ:MSFT)
Fisher Asset Management’s Equity Stake: $12.01 Billion
Number of Hedge Funds Holding Stakes: 279
Microsoft Corporation (NASDAQ:MSFT) develops and supports software, services and devices worldwide. In addition to offering Office Microsoft Teams and Microsoft 365 copilot, it also provides cloud computing solutions under Azure. The company also generates significant revenues through its gaming unit under Xbox. It is one of billionaire Ken Fisher’s top 15 stock picks heading into 2025 as an investment play around artificial intelligence.
Microsoft Corporation (NASDAQ:MSFT)’s early investments in OpenAI, the company that created ChatGPT, helped it outpace some of its AI competitors. Its $14 billion investment in OpenAI has given it access to advanced AI solutions that it is using to enhance its search engine and cloud offerings.
In addition, about 70% of Fortune 500 companies already use Microsoft Corporation (NASDAQ:MSFT)’s AI offering under Microsoft 365 Copilot AI. Similarly, AI business and offerings are on course to become a key revenue generator with a run rate of about $10 billion.
As demand for cloud computing solutions increases, Microsoft Corporation (NASDAQ:MSFT) should be one of the biggest beneficiaries. The company controls about 20% of the market share, just behind Amazon in the segment. MSFT’s Azure cloud services revenue was up 33% in the Fiscal 2025 first quarter. The increase underscores the company’s long-term prospects in the burgeoning segment.
Here is what Alger Spectra Fund said about Microsoft Corporation (NASDAQ:MSFT) in its Q3 2024 investor letter:
“Microsoft Corporation (NASDAQ:MSFT) is a beneficiary of corporate America’s transformative digitization. The company operates through three segments: Productivity and Business Processes (Office, LinkedIn, and Dynamics), Intelligent Cloud (Server Products and Cloud Services, Azure, and Enterprise Services), and More Personal Computing (Windows, Devices, Gaming, and Search). During the quarter, shares detracted from performance after Microsoft reported weaker-than-expected fiscal fourth-quarter revenue growth in its Azure cloud segment. Additionally, management’s fiscal first[1]quarter 2025 Azure revenue guidance came in slightly below estimates. Despite this shortfall, management highlighted that AI contributed 7% to cloud growth, up from 6% last quarter and 3% a year ago. We continue to believe that Microsoft is well-positioned to maintain a leadership role in AI, given its innovative approach and significant growth potential.”
1. Apple Inc. (NASDAQ:AAPL)
Fisher Asset Management’s Equity Stake: $13.66 Billion
Number of Hedge Funds Holding Stakes: 158
Apple Inc. (NASDAQ:AAPL) is a tech giant best known for its iPhone, Mac computers, and iPads, among other hardware products. Hardware sales account for the biggest share of the company’s revenues at 75%. Nevertheless, the company also generates significant revenues from selling services. Its service segment includes the Apple Pay, App Store, Apple Music and iCloud units. It also offers advertising services.
Apple Inc. (NASDAQ:AAPL) is one of Ken Fisher’s top stock picks for 2025, with a 27.84% gain this year. Investors are optimistic about Apple’s future due to its strong financial performance, innovative products, and high demand for iPhones. On October 31, Apple reported a record fourth-quarter revenue of $94.9 billion, up 6% from last year, driven by the iPhone 16 series, Apple Watch Series 10, and AirPods 4. CEO Tim Cook also highlighted new Apple Intelligence features. On October 30, Apple introduced the M4 Pro and M4 Max chips, which improve Mac performance and efficiency.
Similarly, Apple Inc. (NASDAQ:AAPL) is staring at new revenue opportunities with the integration of artificial intelligence under Apple Intelligence. The company is integrating AI into its iPhones and services as one of the ways of fuelling demand to enhance the upgrade cycle. According to Citi’s Consumer Electronics Holiday Survey, smartphone spending and purchase intentions are rising, with iPhone preference rising to 48% from 46% the previous year.
In their third quarter 2024 investor letter, Madison Investments said the following regarding Apple Inc. (NASDAQ:AAPL):
“Alphabet Inc., Eli Lilly and Company, Qualcomm Incorporated, Microsoft Corporation, and Apple Inc. (NASDAQ:AAPL) were the largest detractors. Apple has been volatile in the last quarter but ended on strength. Early in the quarter, Apple benefited from the introduction of their AI strategy, Apple Intelligence. They followed in September with the new iPhone 16, which also created some excitement. We are underweight to Apple, which has resulted in a headwind for performance.”
While we acknowledge the potential of Apple Inc. (NASDAQ:AAPL) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than AAPL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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