We recently compiled a list of the Obama Stock Portfolio: 10 Year Returns. In this article, we are going to take a look at where Microsoft Corporation (NASDAQ:MSFT) stands against the other stocks in former U.S. president Barack Obama’s portfolio.
Former United States President Barack Obama took office during one of the worst recessions in U.S. history, yet the stock market reached new highs during his tenure. Stepping into office in 2009, the year after stocks plummeted nearly 40% amid the financial crisis of 2007-2008, Obama made a remarkably well-timed market prediction. On March 3, 2009, just days before the S&P 500 hit an intraday low of 666 and a closing low of 676.53, the then-president stated, “What you’re now seeing is profit-and-earnings ratios are starting to get to the point where buying stocks is a potentially good deal if you’ve got a long-term perspective on it.” By the time he left office on January 20, 2017, the S&P 500 had soared to 2,263.69, reflecting a gain of about 225% since his predictive remark.
The “Obama Years” coincided with rapid technological advancements that significantly impacted the stock market. Apple Inc.’s iPhone, introduced less than two years before he took office, exemplified this era of innovation. In addition, during Obama’s presidency, billionaire Reed Hastings transformed Netflix Inc. from a DVD rental-by-mail company into a video-streaming giant, revolutionizing entertainment consumption. On the other hand, renewable energy, particularly solar energy, struggled during the president’s tenure. Despite the administration’s solar subsidies, investors were largely disappointed as those subsidies eventually faded. First Solar Inc., one of the largest U.S. solar equipment producers, saw its stock plummet by as much as 74% due to falling solar panel prices, making it the worst-performing S&P 500 stock of the Obama era.
How Did the Obamas Make Their Money?
From speaking at events worldwide to writing memoirs and signing a major production deal with Netflix, the Obamas have led a busy and highly lucrative life post-White House. Michelle Obama’s first memoir, “Becoming,” published in November 2018, became that year’s No. 1 best-selling book. Her second book, “The Light We Carry: Overcoming in Uncertain Times,” also achieved bestseller status. Similarly, Barack Obama’s latest memoir, “A Promised Land,” sold nearly 890,000 copies within 24 hours of its November 2020 release. These ventures, along with the six-figure pension that all former presidents receive, have significantly boosted the Obamas’ net worth, which is at least $70 million according to the International Business Times. The New York Post, however, estimates their fortune to be much higher, at $135 million.
Of course, Barack Obama’s income isn’t limited to speaking fees and pensions. Like many other wealthy individuals, he has invested significantly in the stock market. So what does his portfolio look like? When he took office in 2009, Obama, like all presidents, was required to make financial disclosures by law. At that time, Obama held $200,000-$450,000 in the Vanguard 500 Index Fund Investor Shares that tracks the S&P 500 index, according to a report by CBS News.
Our Methodology
These investments were selected from the top holdings of the Vanguard 500 Index Fund Investor Shares, one of Barack Obama’s primary investments during his presidency, according to official disclosures. We have provided each stock’s trailing 10-year returns to assess their performance over the decade. Data from approximately 919 elite hedge funds tracked by Insider Monkey in the fourth quarter of 2024 was also analyzed to determine the number of hedge funds holding stakes in each firm.
Why are we interested in the stocks that hedge funds pile into? The reason is simple, our research has shown that we can outperform the market by imitating the top stock picks of best hedge funds. Our quarterly newsletter’s strategy picks 14 small and large-caps every quarter and it has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Note: The stocks are sorted in ascending order of their trailing 10-year returns.
A development team working together to create the next version of Windows.
Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 293
Trailing 10-Year Returns: 27.35%
Headquartered in Redmond, Washington, Microsoft Corporation (NASDAQ:MSFT) is a prominent American multinational corporation specializing in technology. Renowned for its Windows line of operating systems, the Microsoft 365 suite of productivity applications, and the Edge web browser, Microsoft holds a significant position in the software industry. Microsoft Corporation (NASDAQ:MSFT) stands as the largest stock in the Vanguard index in which former President Barack Obama had stakes during his time in office.
Tigress Financial Partners recently updated their outlook on Microsoft Corporation (NASDAQ:MSFT), raising the 12-month price target to $550 while maintaining a Buy rating on the stock. The firm underscored Microsoft’s strategic positioning to lead the artificial intelligence (AI) revolution as a key driver of its robust financial performance.
Furthermore, in its recent earnings report, Microsoft Corporation (NASDAQ:MSFT) reported a 17% year-over-year increase in quarterly revenue, reaching $61.9 billion. This growth was driven by strong performances across various segments, notably a 23% increase in cloud revenue, which totaled $35.1 billion. The expansion of Microsoft’s cloud services, particularly Azure, has been pivotal to this success, with significant customer migration and a growing number of substantial Azure deals contributing to the impressive results.
Insider Monkey’s analysis of 919 hedge fund holdings for Q1 2024 revealed that 293 shareholders held stakes in Microsoft Corporation (NASDAQ:MSFT). Notably, Michael Larson’s Bill & Melinda Gates Foundation Trust emerged as the firm’s largest hedge fund shareholder, with holdings valued at $15.35 billion.
Overall MSFT ranks 5th on our list of former U.S. president Barack Obama’s portfolio stocks. You can visit Obama Stock Portfolio: 10 Year Returns to see the other stocks that are on hedge funds’ radar. While we acknowledge the potential of 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 than MSFT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
Disclosure: None. This article is originally published at Insider Monkey.