Jim Cramer on the Magnificent Seven Stocks Plus Netflix

2. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 279

Cramer mentioned that he does not see a prominent weakness with Microsoft Corporation’s (NASDAQ:MSFT) Copilot but cited chatter around it.

“Microsoft’s supposed to be hurt by weakening demand for its Copilot, with its Copilot being their AI assistant. I have no idea if there’s a real weakness here but there is chatter and that’s enough to send the stock down. That said, I think the bears need a lot more than chatter to keep it down.”

Microsoft (NASDAQ:MSFT) has evolved beyond its origins in software, operating systems, and web browsers to become a significant player in various emerging industries. Today, it ranks as one of the largest providers of cloud infrastructure globally, which positions the company favorably to market AI products and services to its cloud clients.

In its last quarter, the company reported revenue of $64.7 billion, a 15% increase compared to the previous year. It highlighted impressive growth in its Azure Cloud services. In the quarter, Azure revenue surged by 30%. Looking forward, management expects that the results from Azure will further accelerate in the latter half of fiscal 2025, driven by substantial investments in new data center capacity that are set to come online.

Its growth is not solely limited to cloud services, Microsoft (NASDAQ:MSFT) is also experiencing significant adoption of its Copilot software, an AI-powered assistant designed to improve workplace productivity. In the fourth quarter, the number of Microsoft 365 Copilot customers increased by over 60% sequentially. With a user base exceeding 400 million for Office 365, the company remains well-positioned for continued growth in this domain.