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Is Microsoft Corporation (MSFT) the Good Stock to Buy According to Hedge Funds?

We recently published a list of 10 Good Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where Microsoft Corporation (NASDAQ:MSFT) stands against other good stocks to buy according to hedge funds.

When seeking investment opportunities, individual investors often look to hedge funds for guidance. Hedge funds are known for their sophisticated investment strategies, high-level expertise, and significant market influence. Hedge funds are massive players in the global investment landscape, managing trillions of dollars in assets. According to Preqin, as of Q3 2024, hedge funds manage approximately $4.87 trillion in assets globally. This significant amount of capital means that hedge funds have substantial market power. When they invest in certain stocks, their actions can impact stock prices, drive market trends, and influence broader economic sentiment. As such, their decisions are followed closely by institutional and retail investors alike.

A key reason hedge fund stock picks are worth paying attention to is their wide diversification across various sectors and strategies. Multi-strategy hedge funds, which allocate capital across various investment strategies, have gained prominence. According to WealthBriefing from 2017 to the third quarter of 2024, the number of multi-strategy fund launches grew at an annual rate of 4%.

Hedge Funds’ Dual Investment Strategy (Long and Short Positions)

Hedge funds are also known for using a dual approach—investing in both long and short positions. This allows them to profit from rising and falling markets, giving them a comprehensive view of market dynamics. According to data from BarclayHedge, hedge funds that employed a long/short strategy in 2024 saw returns of around 9%.

​Hedge funds have increasingly focused on artificial intelligence (AI) and technology sectors, adjusting their portfolios to capitalize on emerging opportunities. According to a Goldman Sachs report analyzing 695 hedge funds with $3.1 trillion in gross equity positions at the start of Q1 2025, there has been a notable shift in investment strategies. The report indicates that hedge funds have become more selective within popular sectors and themes. Notably, they have incrementally added positions to AI Phase 3 companies with AI-enabled revenues. Companies like Salesforce are ranked among the “Rising Stars,” reflecting a significant increase in hedge fund popularity during the last quarter. ​

Our Methodology

We used a consensus-based approach by using opinions from financial websites like Forbes Advisor, Motley Fool, and Morningstar to first compile a list of good stocks to invest in right now. We then shortlisted and ranked these stocks by using Insider Monkey’s hedge fund data for the fourth quarter of 2024. The stocks are ranked based on the number of hedge funds holding stakes in them, from the lowest to the highest number.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

A development team working together to create the next version of Windows.

Microsoft Corporation (NASDAQ:MSFT)

No of Hedge Fund Holders: 317

Microsoft Corporation (NASDAQ:MSFT) is a leading global technology company that develops and supports software, services, devices, and cloud solutions. With its cloud-first and AI-driven approach, the company continues to drive digital transformation across businesses and consumers worldwide.

Microsoft Corporation (NASDAQ:MSFT) has announced a strategic shift in its communications portfolio, with the planned shutdown of Skype on May 5, 2025. The decision, disclosed on February 28, 2025, aligns with the company’s broader focus on Microsoft Teams, reflecting its continued investment in enterprise collaboration solutions. The company has assured that the transition will not result in job cuts, emphasizing a seamless migration for users.

Microsoft Corporation (NASDAQ:MSFT) reported strong Q2 FY25 results, driven by continued growth in cloud and AI services. Revenue came in at $69.6 billion, up 12% YoY, while operating income rose 17% to $31.7 billion. Net income increased 10% to $24.1 billion, with diluted EPS reaching $3.23, also up 10% YoY. The company’s Cloud revenue surged 21% YoY to $40.9 billion, reflecting the company’s deep investment in AI and enterprise solutions. CEO Satya Nadella highlighted that Microsoft Corporation (NASDAQ:MSFT)’s AI business has surpassed an annual run rate of $13 billion, growing 175% YoY.

Overall, MSFT ranks 2nd on our list of good stocks to buy according to hedge funds. While we acknowledge the potential for MSFT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MSFT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap

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

AI, Tariffs, Nuclear Power: One Undervalued Stock Connects ALL the Dots (Before It Explodes!)

Artificial intelligence is the greatest investment opportunity of our lifetime. The time to invest in groundbreaking AI is now, and this stock is a steal!

AI is eating the world—and the machines behind it are ravenous.

Each ChatGPT query, each model update, each robotic breakthrough consumes massive amounts of energy. In fact, AI is already pushing global power grids to the brink.

Wall Street is pouring hundreds of billions into artificial intelligence—training smarter chatbots, automating industries, and building the digital future. But there’s one urgent question few are asking:

Where will all of that energy come from?

AI is the most electricity-hungry technology ever invented. Each data center powering large language models like ChatGPT consumes as much energy as a small city. And it’s about to get worse.

Even Sam Altman, the founder of OpenAI, issued a stark warning:

“The future of AI depends on an energy breakthrough.”

Elon Musk was even more blunt:

“AI will run out of electricity by next year.”

As the world chases faster, smarter machines, a hidden crisis is emerging behind the scenes. Power grids are strained. Electricity prices are rising. Utilities are scrambling to expand capacity.

And that’s where the real opportunity lies…

One little-known company—almost entirely overlooked by most AI investors—could be the ultimate backdoor play. It’s not a chipmaker. It’s not a cloud platform. But it might be the most important AI stock in the US owns critical energy infrastructure assets positioned to feed the coming AI energy spike.

As demand from AI data centers explodes, this company is gearing up to profit from the most valuable commodity in the digital age: electricity.

The “Toll Booth” Operator of the AI Energy Boom

  • It owns critical nuclear energy infrastructure assets, positioning it at the heart of America’s next-generation power strategy.
  • It’s one of the only global companies capable of executing large-scale, complex EPC (engineering, procurement, and construction) projects across oil, gas, renewable fuels, and industrial infrastructure.
  • It plays a pivotal role in U.S. LNG exportation—a sector about to explode under President Trump’s renewed “America First” energy doctrine.

Trump has made it clear: Europe and U.S. allies must buy American LNG.

And our company sits in the toll booth—collecting fees on every drop exported.

But that’s not all…

As Trump’s proposed tariffs push American manufacturers to bring their operations back home, this company will be first in line to rebuild, retrofit, and reengineer those facilities.

AI. Energy. Tariffs. Onshoring. This One Company Ties It All Together.

While the world is distracted by flashy AI tickers, a few smart investors are quietly scooping up shares of the one company powering it all from behind the scenes.

AI needs energy. Energy needs infrastructure.

And infrastructure needs a builder with experience, scale, and execution.

This company has its finger in every pie—and Wall Street is just starting to notice.

Wall Street is noticing this company also because it is quietly riding all of these tailwinds—without the sky-high valuation.

While most energy and utility firms are buried under mountains of debt and coughing up hefty interest payments just to appease bondholders…

This company is completely debt-free.

In fact, it’s sitting on a war chest of cash—equal to nearly one-third of its entire market cap.

It also owns a huge equity stake in another red-hot AI play, giving investors indirect exposure to multiple AI growth engines without paying a premium.

And here’s what the smart money has started whispering…

The Hedge Fund Secret That’s Starting to Leak Out

This stock is so off-the-radar, so absurdly undervalued, that some of the most secretive hedge fund managers in the world have begun pitching it at closed-door investment summits.

They’re sharing it quietly, away from the cameras, to rooms full of ultra-wealthy clients.

Why? Because excluding cash and investments, this company is trading at less than 7 times earnings.

And that’s for a business tied to:

  • The AI infrastructure supercycle
  • The onshoring boom driven by Trump-era tariffs
  • A surge in U.S. LNG exports
  • And a unique footprint in nuclear energy—the future of clean, reliable power

You simply won’t find another AI and energy stock this cheap… with this much upside.

This isn’t a hype stock. It’s not riding on hope.

It’s delivering real cash flows, owns critical infrastructure, and holds stakes in other major growth stories.

This is your chance to get in before the rockets take off!

Disruption is the New Name of the Game: Let’s face it, complacency breeds stagnation.

AI is the ultimate disruptor, and it’s shaking the foundations of traditional industries.

The companies that embrace AI will thrive, while the dinosaurs clinging to outdated methods will be left in the dust.

As an investor, you want to be on the side of the winners, and AI is the winning ticket.

The Talent Pool is Overflowing: The world’s brightest minds are flocking to AI.

From computer scientists to mathematicians, the next generation of innovators is pouring its energy into this field.

This influx of talent guarantees a constant stream of groundbreaking ideas and rapid advancements.

By investing in AI, you’re essentially backing the future.

The future is powered by artificial intelligence, and the time to invest is NOW.

Don’t be a spectator in this technological revolution.

Dive into the AI gold rush and watch your portfolio soar alongside the brightest minds of our generation.

This isn’t just about making money – it’s about being part of the future.

So, buckle up and get ready for the ride of your investment life!

Act Now and Unlock a Potential 100+% Return within 12 to 24 months.

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A New Dawn is Coming to U.S. Stocks

I work for one of the largest independent financial publishers in the world – representing over 1 million people in 148 countries.

We’re independently funding today’s broadcast to address something on the mind of every investor in America right now…

Should I put my money in Artificial Intelligence?

Here to answer that for us… and give away his No. 1 free AI recommendation… is 50-year Wall Street titan, Marc Chaikin.

Marc’s been a trader, stockbroker, and analyst. He was the head of the options department at a major brokerage firm and is a sought-after expert for CNBC, Fox Business, Barron’s, and Yahoo! Finance…

But what Marc’s most known for is his award-winning stock-rating system. Which determines whether a stock could shoot sky-high in the next three to six months… or come crashing down.

That’s why Marc’s work appears in every Bloomberg and Reuters terminal on the planet…

And is still used by hundreds of banks, hedge funds, and brokerages to track the billions of dollars flowing in and out of stocks each day.

He’s used this system to survive nine bear markets… create three new indices for the Nasdaq… and even predict the brutal bear market of 2022, 90 days in advance.

Click to continue reading…