Billionaire Ray Dalio’s Top 5 Technology Stock Picks

4. Microsoft Corporation (NASDAQ:MSFT)

Bridgewater Associates’ Stake Value: $74,299,000 

Percentage of Bridgewater Associates’ 13F Portfolio: 0.37%

Microsoft Corporation (NASDAQ:MSFT) is a cash-rich and profitable company that has a track record for delivering shareholder value. The company has a trailing twelve-month operating margin of 41.69% and an ROE of 42.88%. Moreover, Microsoft Corporation (NASDAQ:MSFT) has free cash flows of $63.3 billion and a debt-to-equity ratio of 0.28. The stock is among Ray Dalio’s top technology stock picks and as of September 30, Bridgewater Associates has a position worth $74.2 million in the company.

On October 25, Microsoft Corporation (NASDAQ:MSFT) announced earnings for the first quarter of fiscal 2023 in which it beat both EPS and revenue estimates. The company reported an EPS of $2.35 and outperformed expectations by $0.04. The company’s revenue for the quarter amounted to $50.12 billion, up 10.60% year over year, and ahead of Wall Street estimates by $435.21 million.

Shortly after the company’s earnings release, Oppenheimer analyst Timothy Horan updated his price target on Microsoft Corporation (NASDAQ:MSFT) to $265 from $275 and maintained an Outperform rating on the shares.

Here is what Alger Capital had to say about Microsoft Corporation (NASDAQ:MSFT) in its third-quarter 2022 investor letter:

“Microsoft Corporation (NASDAQ:MSFT) is a positive dynamic change beneficiary of corporate America’s transformative digitization. Microsoft CEO expects technology spending as a percent of gross domestic product (GDP) to jump from about 5% now to 10% in 10 years and that Microsoft will continue to capture market share within the technology sector.

Microsoft’s shares underperformed during the period because the company slightly missed analysts’ estimates. The miss was due to foreign currency headwinds, weakening small business and consumer demand, and decreasing advertising activity. However, Microsoft showed that despite consumer, advertising, and small and medium business weakness; the company’s main business, the digitization of corporate America, continues to grow. We believe the secular forces of cloud adoption (azure and office 365) remain resilient, and the company’s commercial bookings growth attest to the continued demand for digital transformation.”