Baron Funds: “Microsoft (MSFT) Can Compound Revenue in the Low Double Digits for the Next 3 Years”

Baron Funds, an asset management firm, published its “Baron Opportunity Fund” first quarter 2022 investor letter – a copy of which can be downloaded here. Baron Opportunity Fund (the “Fund”) fell sharply and significantly lagged the broader market during the first quarter. For the period, the Fund dropped 16.02% (Institutional Shares), trailing the Russell 3000 Growth Index, which fell 9.25%, and the S&P 500 Index, which declined 4.60%. Try to spend some time looking at the fund’s top 5 holdings to be informed about their best picks for 2022.

In its Q1 2022 investor letter, Baron Opportunity Fund mentioned Microsoft Corporation (NASDAQ:MSFT) and explained its insights for the company. Founded in 1975, Microsoft Corporation (NASDAQ:MSFT) is a Redmond, Washington-based multinational technology corporation with a $1.8 trillion market capitalization. Microsoft Corporation (NASDAQ:MSFT) delivered a -27.97% return since the beginning of the year, while its 12-month returns are down by -6.78%. The stock closed at $242.26 per share on June 13, 2022.

Here is what Baron Opportunity Fund has to say about Microsoft Corporation (NASDAQ:MSFT) in its Q1 2022 investor letter:

“Shares of mega-cap software company Microsoft Corporation (NASDAQ:MSFT) pulled back with the broader software sector. The company posted another solid quarter, highlighted by total revenues increasing 20% and Microsoft Cloud revenues, now 45% of total revenues, growing 32%. These results were driven, in large part, by strong demand for large Azure contracts. We believe Microsoft can compound revenue in the low double digits for the next three years, underpinned by its expansion in its total addressable market and market share gains.”

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Our calculations show that Microsoft Corporation (NASDAQ:MSFT) ranks 2nd on our list of the 30 Most Popular Stocks Among Hedge Funds. Microsoft Corporation (NASDAQ:MSFT) was in 259 hedge fund portfolios at the end of the first quarter of 2022, compared to 262 funds in the previous quarter. Microsoft Corporation (NASDAQ:MSFT) delivered a -12.36% return in the past 3 months.

In June 2022, we also shared another hedge fund’s views on Microsoft Corporation (NASDAQ:MSFT) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.

Disclosure: None. This article is originally published at Insider Monkey.