1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Investors: 293
Microsoft Corporation (NASDAQ:MSFT) is a top technology company known for its software, cloud services, and cutting-edge solutions. Microsoft Corporation (NASDAQ:MSFT) is a major industry player with a wide range of products, including Windows, Office 365, and its strong cloud platform, Azure.
Leon Cooperman highlighted his investment in Microsoft Corporation (NASDAQ:MSFT) as a key technology holding. He noted that while Microsoft Corporation (NASDAQ:MSFT) may not be cheap, the current market rotation is significant and suggests that the market’s optimism, particularly around extreme valuations in top tech stocks, might be overly optimistic.
“I own Microsoft. It’s my window into technology. While I wouldn’t say it’s a particularly cheap stock, I do believe this market rotation is real. Historically, markets that have experienced rotation often enter a corrective phase. The shift from extreme valuations in the ‘Magnificent 7’ suggests that something else is at play, and a flat market might be overly optimistic.”
For Q4 FY2024, Microsoft Corporation (NASDAQ:MSFT) achieved annual revenue of over $245 billion, marking a 15% increase from the previous year, with cloud revenue growing 23% to exceed $135 billion. Earnings per share (EPS) reached $3.06, surpassing the $2.98 forecast. Azure, Microsoft’s cloud service, saw a 20% revenue increase, reinforcing its top position in the cloud market. The $69 billion acquisition of Activision Blizzard, Inc. (NASDAQ:ATVI) boosts Microsoft Corporation (NASDAQ:MSFT)’s gaming and entertainment offerings, further integrating these with its cloud services. New releases like Windows 12 and updates to Office 365 show Microsoft Corporation (NASDAQ:MSFT)’s ongoing innovation.
ClearBridge Sustainability Leaders Strategy stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q2 2024 investor letter:
“The Strategy trailed the Russell 3000 Index benchmark largely due to our diversified positioning, although we maintain a considerable portfolio allocation to large cap AI-related companies. These positions were indeed among our top contributors in the quarter, such as Microsoft Corporation (NASDAQ:MSFT). The company is finding more ways to deploy AI for sustainability objectives such as its ability to better measure, predict and optimize complex systems, which can help its partner communities reduce wildfire risk.”
While we acknowledge the potential of Microsoft Corporation (NASDAQ:MSFT), our conviction lies in the belief that under the radar 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 NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.