Billionaire Chris Hohn’s 8 Stock Picks with Huge Upside Potential

4. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders as of Q4: 317

TCI Fund Management’s Equity Stake: $5.90 Billion

Upside Potential as of May 6: 16.08%

Microsoft Corporation (NASDAQ:MSFT), a leading multinational technology conglomerate headquartered in Redmond, Washington, delivered a strong third-quarter performance that surpassed analyst expectations across all key metrics. The company reported earnings per share of $3.46, beating the consensus estimate of $3.23, and reflecting an 18% year-over-year increase in net income to $25.8 billion. Revenue for the quarter reached $70.1 billion, up 13% from the same period last year, also outperforming the projected $68.53 billion.

Segment-wise, Microsoft Corporation (NASDAQ:MSFT)’s “Intelligent Cloud” division, which includes Azure and server products, generated $26.8 billion in revenue, a 21% year-over-year increase, driven by robust enterprise demand for AI infrastructure and cloud solutions. “Productivity and Business Processes,” home to Microsoft 365, LinkedIn, and Dynamics, posted revenue of $29.9 billion, up 10% year-on-year, while “More Personal Computing,” which includes Windows, Xbox, and Bing, brought in $13.4 billion, a 6% increase.

Capital expenditures rose sharply to $16.7 billion, up 52% year over year, exceeding analyst expectations and highlighting Microsoft Corporation (NASDAQ:MSFT)’s aggressive investment in AI and cloud infrastructure. While the company has recently paused or canceled several data center leases, the surge in spending underscores its commitment to scaling capacity in high-demand areas, particularly around AI workloads.

CEO Satya Nadella emphasized that AI and cloud technologies are becoming fundamental to business efficiency and innovation across industries. However, market concerns linger over potential oversupply in AI computing resources, particularly given Microsoft Corporation (NASDAQ:MSFT)’s $14 billion investment in OpenAI and the rapidly evolving landscape of generative AI.

Despite these uncertainties, Microsoft Corporation (NASDAQ:MSFT)’s diversified revenue streams, dominant position in enterprise software, and ongoing AI leadership position it well for continued long-term growth. The company’s ability to consistently outperform expectations reinforces its standing as a core holding in institutional portfolios.