Mairs & Power, an investment advisor, released the “Mairs & Power Growth Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. The stock market was surprisingly calm in the fourth quarter, despite some upheaval domestically and abroad. The market performance drivers in 2024 were mega cap Technology stocks. The fund had another positive year in 2024 and ended with 19.62% gain. The S&P Total Return (TR) was up 25.02%, and the Fund’s peer group, as measured by the Morningstar Large Blend Category, was up 20.51% over the same period of time. In addition, please check the fund’s top five holdings to know its best picks in 2024.
In its fourth quarter 2024 investor letter, Mairs & Power Growth 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 -6.85%, and its shares gained 1.09% of their value over the last 52 weeks. On February 20, 2025, Microsoft Corporation (NASDAQ:MSFT) stock closed at $416.13 per share with a market capitalization of $3.094 trillion.
Mairs & Power Growth Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q4 2024 investor letter:
“Unlike the dot-com companies that operated at the turn-of-the-century, many of today’s technology companies are established businesses with significant cash flows. We have argued, and continue to argue, that many of these investments are perfectly aligned with our investments process in that they embody durable competitive advantages, above-average growth prospects, and excellent management teams.
A perfect example is Microsoft Corporation (NASDAQ:MSFT), which has grown to become the largest holding in the Growth Fund. Microsoft has a near monopoly on the office software productivity market with its Microsoft Office Suite. The company’s Azure platform is a leader in cloud computing and has been steadily gaining share. Thanks to its Office and Azure products, the company is deeply embedded within many enterprise IT ecosystems. Therefore, it should be well-positioned to expand its presence within its customer base, as it rolls out premium-price AI solutions. The company is not resting on its laurels and plans on spending an astounding $80 billion in 2025 to build out AI data centers.”
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, 317 hedge fund portfolios held Microsoft Corporation (NASDAQ:MSFT) at the end of the fourth quarter compared to 279 in the third 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 top AI stocks on Wall Street’s radar. 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.
