1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 317
Microsoft Corporation (NASDAQ:MSFT) is a leading technology company known for its core software products, which include the Windows OS, Microsoft 365 suite, and Edge browser. Its product portfolio includes corporate software, software development tools, video games, gaming gear, and cloud services.
On January 30, RBC Capital Markets reaffirmed its Outperform rating for MSFT shares, with a $500 price objective. The company recently revealed its software industry projection for 2025, and it selected Microsoft Corporation (NASDAQ:MSFT) for its diverse market exposure and position to benefit from generative AI.
Furthermore, on February 11, Microsoft Corporation (NASDAQ:MSFT) announced an expanded partnership with Anduril, an American defense technology company, to begin the next phase of the United States Army’s Integrated Visual Augmentation System (IVAS) program.
Bretton Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q4 2024 investor letter:
“Microsoft Corporation (NASDAQ:MSFT) has become the go-to provider of computing services for many emerging AI companies, and its franchise is much more diversified than Alphabet’s, making it a net beneficiary of the AI arms race. Demand for its cloud computing services continued to grow, and the rest of its business (Orce, Windows, Xbox, GitHub, LinkedIn) are also thriving, sending earnings per share up 22% while the stock returned 13%.”
While we acknowledge the potential of MSFT, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MSFT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
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