2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 293
Microsoft Corporation (NASDAQ:MSFT) is an American multinational technology company based in Redmond, Washington. The company is best known for its software products, including the Windows operating systems, the Microsoft 365 suite of productivity applications, and the Edge web browser. Microsoft Azure has rapidly gained prominence in the realm of edge computing by supporting edge initiatives in both hardware and software.
Among the hedge funds tracked by Insider Monkey, Texas-based Fisher Asset Management is a notable shareholder in Microsoft Corporation (NASDAQ:MSFT), holding 25.9 million shares valued at over $10.9 billion.
New Street Research recently initiated coverage of Microsoft Corporation (NASDAQ:MSFT) with a Buy rating, stating that the company is well positioned to grow profits in the “low teens for years to come,” even if the AI revolution doesn’t fully materialize. They set a price target of $570 on the stock. Additionally, on June 14, Tigress Financial Partners updated their outlook on Microsoft Corporation (NASDAQ:MSFT), raising the 12-month price target to $550 and maintaining a Buy rating all the while emphasizing the company’s strategic position to lead the AI revolution, which has been a key driver of its financial performance.
In its recent earnings report, Microsoft Corporation (NASDAQ:MSFT) posted a 17% year-over-year increase in quarterly revenue, reaching $61.9 billion. This growth was driven by strong performances across various segments, including a 23% increase in cloud revenue, totaling $35.1 billion. The expansion of Microsoft Corporation (NASDAQ:MSFT)’s cloud services, particularly Azure, played a central role in this success, supported by significant customer migration and a growing number of large Azure deals.
Baron Fifth Avenue Growth Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its first quarter 2024 investor letter:
“Our second largest purchase during the quarter was the software platform, Microsoft Corporation (NASDAQ:MSFT), which we continued to add to, after initiating a position in the fourth quarter of 2023. Microsoft continues to report strong quarterly results, with revenue growth of 16% year-over-year in constant currency thanks to better-than-expected demand in its intelligent cloud segment, which saw revenue growth of 19% year-over-year, driven by Azure growth of 28% with AI contributing 6pts to growth compared with 3pts in the prior quarter. While the adoption of GenAI remains in its early stages, Microsoft has disclosed positive initial data points with 53,000 Azure AI customers as of its December quarter up from 18,000 in the prior quarter, 1.3 million paid GitHub Copilot subscribers (up 30% sequentially) and more than 230,000 organizations who have used AI capabilities in the power platform (up 80% sequentially). Management also noted that large cloud optimizations that started a year or so ago have largely finished. Profitability also continues to be strong with 44% non-GAAP operating margins, which was 120bps better than expected.”
