3. Microsoft (NASDAQ:MSFT)
Altimeter Capital’s Stake: $617,752,974
MSFT bears believe the company’s business is under threat amid AI disruption. But some analysts think the company can actually thrive while other SaaS companies get crushed. Why? MSFT can easily shift from a per-seat pricing model to a per-workload model while sitting on one of the largest enterprise distribution networks in the world. The company has over 450 million commercial users embedded across email, documents, and workflows. That gives it direct access to enterprise data—the key input that makes AI useful. At the same time, over 3.7 million businesses rely on its software, while nearly 486,000 organizations run on Azure, including 85% of the Fortune 500. This means Microsoft has a strong ecosystem that protects it from AI disruption. Even if AI reduces the number of software seats, Microsoft can monetize higher usage through Copilot, automation, and cloud compute.
Microsoft is also foraying into the chip segment to cut its reliance on outsiders. Its Maia 200 AI accelerator chip is designed to run large-scale AI workloads inside Microsoft data centers, while the Cobalt 200 CPU is aimed at improving general cloud computing efficiency on Azure. Together, these custom chips reduce dependence on external suppliers and improve long-term cost control, performance, and scalability.
Mar Vista U.S. Quality Strategy stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q1 2026 investor letter:
“Microsoft Corporation’s (NASDAQ:MSFT) stock came under pressure in Q1 as investors grew concerned about the rising costs required to fund its accelerating AI infrastructure build-out in 2026. This, combined with heightened expectations for Azure growth, led to a sell-off following the December quarter earnings report, when Azure revenue grew “only” 39% year over year.
Investors have increasingly questioned the return on investment associated with Microsoft’s large and rapidly expanding capital expenditures tied to AI infrastructure. While these investments are substantial, we believe Microsoft is well positioned to support this growth through its strong and expanding operating cash flows. Although the company has meaningful exposure to OpenAI, OpenAI’s ability to raise over $100 billion should help alleviate investor concerns regarding its capacity to meet large contractual commitments.
Microsoft remains a top portfolio holding, supported by its financial strength, diversified revenue streams, and broad customer base, all of which provide resilience. The company is experiencing strong growth in Azure, its hyperscale cloud platform, which is capacity constrained, alongside increasing adoption of its Copilot offerings across its extensive enterprise customer base. We believe Microsoft should be well positioned to generate attractive long-term returns from its partnership with OpenAI and to effectively monetize generative AI capabilities across its global enterprise IT footprint through its expanding suite of Copilot and AI-enabled products.”
