We recently published a list of Long-Term Stock Portfolio: 15 Best Stocks for 15 Years. In this article, we are going to take a look at where Microsoft Corporation (NASDAQ:MSFT) stands against other best stocks for 15 years.
Russell Investments believes that 3 features are defining the market outlook for 2025. These include the elevated level of the S&P 500 forward P/E ratio, the potential for further US dollar strength, as well as the direction of the US 10-year Treasury yield. The active equity managers have been challenged by the severe market concentration. The firm opines that a flattening out of such trends— which can be seen due to policy shifts or change in sentiments related to earnings growth and valuations for mega caps — can support active manager outperformance.
Russell Investments remains focused on sectors in which AI adoption has been ramping up, including industrials, healthcare, and consumer goods. As per the firm, companies that leverage AI for productivity improvements remain well-placed to gain a lasting competitive edge and provide healthy returns. Therefore, skilled active managers are required to look for such companies, primarily those that are in less-covered segments of the market.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
Sectors Providing Investment Opportunities
With respect to real assets, Russell Investments sees attractive investment opportunities in real estate and infrastructure, mainly sectors that can benefit from the stabilization of long-term interest rates and favorable relative valuations in comparison to other growth assets. The application of AI in real estate, like data centers and healthcare facilities, continues to emerge as a critical growth area. Furthermore, the infrastructure investments continue to gain momentum from energy utilities and pipeline exposures, given the US administration’s emphasis on expanding LNG (liquified natural gas) production.
The firm also believes that an early focus on deregulation and tax cuts would likely be well-received by equity investors. Overall, an expected US soft landing, together with anticipated policy moderation on trade and immigration, creates specific opportunities for well-positioned portfolios, says Russell Investments.
Our Methodology
We sifted through the holdings of iShares Core S&P 500 ETF and shortlisted the companies that have 10-year revenue growth of over ~10%. Next, we selected stocks that were the most popular among elite hedge funds. We have ranked the stocks in ascending order of hedge fund sentiment.
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 the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A development team working together to create the next version of Windows.
Microsoft Corporation (NASDAQ:MSFT)
10-Year Revenue Growth: ~10.8%
Number of Hedge Fund Holders: 317
Cantor Fitzgerald reiterated its “Overweight” rating on Microsoft Corporation (NASDAQ:MSFT)’s stock, citing the company’s healthy performance, particularly in its Azure cloud services. Furthermore, the positive outlook stems from a healthy demand for AI capabilities within Azure, which has been a critical growth driver. Notably, Microsoft Corporation (NASDAQ:MSFT)’s Azure cloud platform was singled out as being mainly well-equipped to handle the current macroeconomic situation. Notably, in Q2 2025, Microsoft Cloud revenue came in at $40.9 billion, reflecting a rise of 21% YoY.
Overall, the commentary from the firm demonstrates a picture of resilience as well as strategic growth for the company, with AI and cloud services remaining at the forefront of the company’s strong market performance. The firm’s analysts believe that Microsoft Corporation (NASDAQ:MSFT) will continue to thrive in the current economic landscape, thanks to its comprehensive product offerings and emphasis on emerging technologies. Microsoft Corporation (NASDAQ:MSFT)’s healthy position in the public cloud market, together with the integration of AI models, offers a strong competitive advantage.
Generation Investment Management, an investment management firm, released its Q4 2024 investor letter. Here is what the fund said:
“Microsoft Corporation (NASDAQ:MSFT), the world’s largest software company, has been in the portfolio for over a decade. We like the firm because its products align closely with society’s evolving needs. As the world digitises, demand for Microsoft’s tools will continue to grow. The company enjoys a wide economic moat – built on its unique market position, deep customer understanding and extensive global footprint.
Microsoft’s management team has a long-term vision. It makes bold investments in future growth, most recently in AI. We forecast that the IT intensity of the economy will double over the next 15 years. Microsoft is a rare company with USD 250 billion in revenues, projected to grow at 16% annually over the next five years.14 Earnings-per share could grow faster. Despite its near-term valuation appearing high, we believe Microsoft is well positioned to lead in the AI era, potentially doubling or tripling its market share. Additionally, we expect returns on capital (ROC) for its AI related investments to match historical levels, despite market scepticism.
There are risks. Demand for AI systems may not materialise as expected, and increasing pricing power among suppliers like Nvidia could pressure margins. Still, from our analysis we see substantial long-term value in this name.”
Overall, MSFT ranks 2nd on our list of best stocks for 15 years. While we acknowledge the potential of MSFT as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for a deeply undervalued AI stock that is more promising than MSFT but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.