5 Important Stock Picks of Major Hedge Funds in 2021

3. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 250

Gain in Share Price Over Past Year as of January 4: 50.5%  

Microsoft Corporation (NASDAQ:MSFT) is one of the most popular stocks among hedge funds. At the end of September, 250 hedge funds held stakes in Microsoft Corporation (NASDAQ:MSFT) worth $65 billion. Fisher Asset Management is a leading shareholder in Microsoft Corporation (NASDAQ:MSFT)  with 25 million shares worth more than $7 billion. 

SMBC Nikko analyst Steve Koenig recently initiated coverage of Microsoft Corporation (NASDAQ:MSFT) stock with an Outperform rating and a price target of $410, underlining that the firm was successfully transitioning customers to the cloud and was well positioned to take advantage of increased spending towards IT in the coming years. 

In its Q1 2021 investor letter, Polen Capital, an investment management firm, highlighted a few stocks and Microsoft Corporation (NASDAQ:MSFT) was one of them. Here is what the fund said:

“We have written extensively about Microsoft in recent commentaries. It was our leading contributor last year and one of our largest weightings within the Portfolio. It continues to experience business momentum through several dominant, essential, and competitively advantaged businesses, like Office 365 and Azure. The markets it competes for are enormous, which gives the company the ability to compound at scale. In the past quarter alone, the company generated over $40 billion in revenue, representing a 17% growth rate. The inherent operating leverage in Microsoft’s business model continues and led to 34% earnings growth this past quarter. Despite the broad rotation we saw in the first quarter and Microsoft’s robust performance in 2020, we think its business fundamentals continue to exhibit strength, and the stock continues to reflect the fundamentals.”