7. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders as of Q4: 317
Lone Pine Capital’s Equity Stake: $691.13 Million
As of Q4 2024, 317 out of 1,008 funds tracked by Insider Monkey held shares in Microsoft Corporation (NASDAQ:MSFT) that were collectively worth nearly $91.24 billion by the end of the quarter, up from 279 funds in Q3. This heightened institutional interest reflects confidence in Microsoft’s long-term growth prospects and market dominance. The company’s strong financial performance further reinforces its appeal, with Q4 2024 revenue reaching $69.63 billion, surpassing market expectations of $68.81 billion and representing a 12.27% year-over-year increase. Earnings per share (EPS) also exceeded analyst projections, coming in at $3.23, marking a 3.5% beat.
Beyond financial strength, Microsoft Corporation (NASDAQ:MSFT) continues to push the boundaries of innovation. In February 2025, the company announced a major breakthrough in quantum computing with the development of a topological qubit, a technological milestone that could revolutionize artificial intelligence, medicine, and cryptography. While skepticism remains regarding the qubit’s immediate impact, this advancement places Microsoft at the forefront of global quantum research.
Despite its strong position, Microsoft Corporation (NASDAQ:MSFT) faces challenges in the evolving AI landscape. Veteran stock analyst Helene Meisler noted that the company’s aggressive investment in AI infrastructure has led to significant spending on high-performance servers from suppliers such as Super Micro and Dell. While this aligns with the AI boom, concerns are growing that demand may decelerate, leaving Microsoft with excess capacity. In 2024, AI-driven stock rallies benefited from expectations of Federal Reserve rate cuts, which facilitated corporate borrowing and investment. However, as inflation rises and anticipated rate cuts diminish, combined with the emergence of competitors like DeepSeek offering cost-efficient AI solutions, investors are questioning whether AI spending will require recalibration. This uncertainty has contributed to the recent stagnation of Microsoft’s stock price.
Despite these concerns, Microsoft Corporation (NASDAQ:MSFT) remains an attractive investment due to its strong financial performance, technological leadership, and dominance in AI and cloud computing. The company’s continued innovation in quantum computing, coupled with its ability to integrate AI into enterprise solutions, positions it for sustained long-term growth.
