Wall Street Picked These 5 AI Stocks for 2024

1. Microsoft Corp (NASDAQ:MSFT)

Number of Hedge Fund Holders: 302
YTD Performance as of March 7, 2024: +9.5%

Microsoft Corp (NASDAQ:MSFT) is a software and AI leader. It offers Office, Microsoft 365 Copilot, and Microsoft Viva. It invested $13 billion in OpenAI and plans to invest $2.1 billion more in AI. Microsoft Corp (NASDAQ:MSFT)’s AI investments drove its 64%+ rally in 2023.

Analysts at TD Cowen have already raised the price target for Microsoft Corp (NASDAQ:MSFT) to $390 a share on expectations that AI will fuel further upside action.

“We expect Azure above high-end of guide, with encouraging Cloud data points including third party data and field checks showing stronger new bookings trends and growing AI tailwinds,” analysts said, according to Investing.com.

Of the 933 hedge funds profiled by Insider Monkey during the fourth quarter of 2023, 302 had investments in the robotics company. Microsoft Corporation (NASDAQ:MSFT)’s largest shareholder is the Bill & Melinda Gates Foundation Trust, owning 38.21 million shares worth $14.37 billion.

Here is what RiverPark Large Growth Fund said about Microsoft Corporation (NASDAQ:MSFT) in its fourth quarter 2023 investor letter:

“Microsoft Corporation (NASDAQ:MSFT): MSFT was a top contributor in the quarter following strong FY1Q24 earnings in late October. In that earnings report, MSFT delivered better-than-expected revenue (+13%) and earnings (+27%), with growth in both accelerating from the prior quarter. All three major segments grew revenue faster than expected, highlighted by 28% constant currency growth in Azure, the company’s cloud offering. This marked the first quarter-over-quarter acceleration for Azure in six quarters. Operating margins (48%) were 400 basis points better than expected and earnings came in 13% ahead of expectations.

Cloud-based services have become the company’s largest revenue and earnings producer. The company’s Azure platform alone has the potential to grow to more than $100 billion in annual revenue over the next decade. Overall, we believe that the company will continue to deliver double-digit revenue and EPS growth and generate an enormous amount of free cash flow to both return to shareholders and use for acquisitions.”

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