Bretton Capital Management, an investment management company, released “Bretton Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. The market is experiencing a period of high returns, with two consecutive years of around 25% returns and 15 years of mid-teens returns, prompting investors to be cautious. The average stock market return is around 9-10% per year, historically, based on corporate earnings growth and dividends and buybacks. The 20 companies the fund owns are well-positioned and expected to perform well. Against this backdrop, in the fourth quarter, the fund returned -0.98% compared to 2.41% return for the S&P 500. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
In its fourth quarter 2024 investor letter, Bretton Fund emphasized stocks such as Microsoft Corporation (NASDAQ:MSFT). Microsoft Corporation (NASDAQ:MSFT) is a multinational software company that develops and supports software, services, devices, and solutions. The one-month return of Microsoft Corporation (NASDAQ:MSFT) was -4.80%, and its shares gained 1.08% of their value over the last 52 weeks. On February 14, 2025, Microsoft Corporation (NASDAQ:MSFT) stock closed at $408.43 per share with a market capitalization of $3.04 trillion.
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%.”
A development team working together to create the next version of Windows.
Microsoft Corporation (NASDAQ:MSFT) is in second position our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 279 hedge fund portfolios held Microsoft Corporation (NASDAQ:MSFT) at the end of the third quarter which was 279 in the previous quarter. In the fiscal second quarter of 2025, Microsoft Corporation (NASDAQ:MSFT) reported $69.6 billion in revenues, up 12% year-over-year. While we acknowledge the potential of Microsoft Corporation (NASDAQ:MSFT) as an investment, 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 as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article we discussed Microsoft Corporation (NASDAQ:MSFT) and shared the list of most profitable tech stocks to buy. In addition, please check out our hedge fund investor letters Q4 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.