We recently published a list of 12 Best Dow Stocks to Buy Right Now. In this article, we are going to take a look at where Microsoft Corporation (NASDAQ:MSFT) stands against other best Dow stocks to buy right now.
The Dow Jones Industrial Average is among the most popular stock market indices globally. Known as the Dow, the index monitors the performance of 30 blue-chip companies listed on the US stock exchanges. In 2024, the Dow index returned over 16%, compared to a 25% return for the broader market.
Historically, the Dow has performed better compared to the broader market. According to S&P Global, in the past 30 years up until June 2021, the Dow index returned approximately 11.16% compared to the market’s return of 10.6%. This growth is mainly due to the Dow’s stable, industry-leading companies that offer reliable dividends and returns.
READ ALSO: 7 Most Undervalued Financial Stocks To Buy According to Analysts.
Since the beginning of 2025, Dow Jones has soared over 4% as mega-cap tech stocks surged following their positive earnings. Whereas, the S&P 500 index has jumped by 3.70% year-to-date, as of January 23.
Trump’s AI startup initiative is already pumping the tech stocks. The $500 billion Stargate AI infrastructure project led by Oracle, OpenAI, and SoftBank will accelerate the AI demand. Tech stocks are already dominating the market driven by the huge demand for AI. Nasdaq Composite returned nearly 30% in 2024, outperforming the Dow and the S&P 500.
The U.S. economy is expected to perform better this year compared to 2024 followed by lower interest rates and PCE inflation expected around 2.1%. Economists anticipate a suitable atmosphere for mergers and acquisitions.
Investing in Dow Jones stocks can be appealing in 2025 as they offer huge dividends and returns. The Dow stocks have strong balance sheets and have a proven track record of high yields.
Our Methodology
We shifted through the Dow Jones Index and selected the 12 best Dow stocks based on hedge fund sentiment around each stock using Insider Monkey’s data for Q3 2024. The best Dow stocks are ranked in ascending order of their hedge fund holdings.
Why do we care about what hedge funds do? 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).
A development team working together to create the next version of Windows.
Microsoft Corporation (NASDAQ:MSFT)
No. of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ:MSFT) is an American multinational tech giant. The company has unmatched achievements within the enterprise ecosystem, driven by integrated solutions designed specifically for business needs. Microsoft’s Intelligent Cloud segment, Azure, has become the company’s leading growth driver.
In FY2024, Microsoft Corporation (NASDAQ:MSFT) generated $211 billion in revenue, mainly driven by Azure as it accounted for 43% of the total sales. At 22%, Azure holds the second-largest share of the global cloud market after AWS. Azure’s hybrid cloud features effectively merge on-premises and cloud-based systems, making it highly efficient for enterprise customers. The segment’s 67% gross margin in 2024 reflects its scalability and profitability across the company’s cloud services, playing a vital role in MSFT’s overall business growth.
In Q1 FY2025, Microsoft Corporation’s revenue was reported at $65.6 billion, up 16% from a year ago. Operating income was recorded at around $30.6 billion, up by 14% year-over-year. The company’s cloud segment experienced a 33% increase in Azure and other cloud services. The company ended Q1 with more than $20.8 billion in cash and cash equivalents. The growing AI infrastructure in the U.S. will allow Microsoft to expand its cloud operations and integrate with new clients.
Overall, MSFT ranks 2nd on our list of best Dow stocks to buy right now. While we acknowledge the potential of MSFT to grow, our conviction lies in the belief that 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
Disclosure: None. This article is originally published at Insider Monkey.
