We recently compiled a list of the 20 High Growth Mega Cap Stocks You Can Buy And Hold For Next 5 Years. In this article, we are going to take a look at where Microsoft Corporation (NASDAQ:MSFT) stands against the other high growth mega cap stocks.
Exactly 5 years ago, the world struggled to deal with a black swan event: the COVID-19 pandemic. There was so much uncertainty that people didn’t even know if they’d be alive in the next few weeks, let alone figure out where the market was heading. Anyone who invested in the S&P 5 years ago would have gained 83%. If you had bought at the exact bottom, you’d have gained twice that amount.
What the above proves is that the present isn’t necessarily an indicator of what the future holds. All companies that had their workflows disrupted have recovered, some more than others. Some companies have strengthened their supply chains. Others have improved their work-from-home capabilities. Industries like airlines and restaurants have modified their business models to cater to the new dynamics.
These companies have been able to deal with the changing dynamics because of their financial strength and innovation. A company’s past performance and its finances give a good idea of whether it will be able to survive bad times. That’s why when we look at the best mega-cap stocks to hold for the next 5 years, we look at how well they have grown in the last 5 years.
To come up with our list of top 20 mega-cap stocks to hold for the next 5 years, we considered stocks with a market cap of at least $200 billion and a 5-year sales growth rate of at least 10%.
A development team working together to create the next version of Windows.
Microsoft Corporation (NASDAQ:MSFT)
Microsoft Corporation (NASDAQ:MSFT) is a developer and supporter of software, devices & solutions, and services. The company operates through Intelligent Cloud, More Personal Computing, and Productivity & Business Processes segments. The company has grown its revenue by 14.4% over the last 5 years.
Microsoft Corporation (NASDAQ:MSFT)’s stock has suffered due to the Chinese AI startup Deepseek and unlike some other major tech stocks, hasn’t been able to recover. The software company also announced its earnings a couple of days later, exceeding estimates. What the market did not like was the guidance for the ongoing quarter, which was below the expected numbers. The company’s cloud business is facing challenges, both at the supply chain level and the execution. However, the AI business is expected to do $13 billion in annualized revenue. This is still a fraction of the amount of money the company has spent, and plans to spend, on its AI infrastructure in the coming years.
Last week, Microsoft Corporation (NASDAQ:MSFT) announced setting up a data center in Poland for $700 million. The company already opened a data center in the same country in 2023, costing $1 billion. These investments are not only aimed at increasing the company’s computing power but also enhance the existing cooperation between the Polish army and the company.
Overall MSFT ranks 19th on our list of the high growth mega cap stocks you can buy and hold for the next 5 years. While we acknowledge the potential of MSFT as an investment, our conviction lies in the belief that some 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 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 was originally published at Insider Monkey.
