AQR Capital’s Top 5 Stock Picks

2. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 269

AQR Capital’s Stake Value: $1,106,019,000

AQR Capital has been a long-term position holder in Microsoft Corporation (NASDAQ:MSFT). Its stake in the company goes back to the last quarter of 2010, apart from a few breaks over the years. In the third quarter of 2022, there were 4.7 million shares of Microsoft Corporation (NASDAQ:MSFT) in the AQR portfolio, worth $1.10 billion and representing 2.69% of the total holdings. 

On November 16, NVIDIA Corporation (NASDAQ:NVDA) announced a multi-year collaboration with Microsoft Corporation (NASDAQ:MSFT) to build a “massive” cloud AI computer, which is expected to be one of the most powerful AI supercomputers in the world. Nvidia will use Microsoft Azure’s scalable virtual machine capability to research and make advances in generative AI.

Macquarie analyst Sarah Hindlian-Bowler on November 2 assumed coverage of Microsoft Corporation (NASDAQ:MSFT) with a Neutral rating and a $234 price target. The analyst views short-term headwinds for Microsoft Corporation (NASDAQ:MSFT) from weakness in the macro environment, cloud pull-in from COVID, softer PC sales, accelerating energy costs, and low consumer purchasing power.

According to Insider Monkey’s Q3 data, 269 hedge funds were long Microsoft Corporation (NASDAQ:MSFT), compared to 259 funds in the preceding quarter. Bill & Melinda Gates Foundation Trust, the leading position holder in Microsoft, boosted its stake in the company 4057% in Q3 2022, holding 39.2 million shares worth $9.14 billion. 

Diamond Hill made the following comment about Microsoft Corporation (NASDAQ:MSFT) in its Q3 2022 investor letter:

“Also among our bottom contributors were media and technology giant Alphabet, software and IT services provider Microsoft Corporation (NASDAQ:MSFT) and insurance company American International Group (AIG). Microsoft shares declined in Q3, along with other tech companies, as rising interest rates impacted the near-term outlook. We expect the business to continue to generate strong revenue growth and benefit from operating leverage. Microsoft’s cloud computing services business, Azure, is generating robust growth, confirming its competitive positioning.”