We recently published a list of 10 Best NASDAQ Stocks to Buy According to Billionaires. In this article, we are going to take a look at where Microsoft Corporation (NASDAQ:MSFT) stands against other best NASDAQ stocks to buy according to billionaires.
The latest market data shows that the US economy contracted at an annualized rate of 0.3% during the first quarter of 2025. This was a rapid reversal from the 2.4% growth in the last quarter of 2024. The further segregation of the data shows that tariff uncertainty was one of the key contributing factors toward the slowdown, as net exports dropped 4.8%. According to a recent report by CNBC, traders highlighted that the imports were skewed up 41% last quarter as a preparatory move by companies to get ahead of the tariff situation. In this backdrop, the NASDAQ slipped another 0.09% on May 1, to end at 17,446.34.
On April 30, Fundstrat’s Tom Lee joined CNBC to talk about the outlook of the stock market amidst the tariff situation. He noted that the stock market is currently trying to figure out the trajectory of the economy as it is clear that the economic data for the next 3 quarters will be polluted by the tariffs and other distortions that follow. Lee highlighted that there are two questions that the market is trying to figure out. The first question is whether this is a dip and noise for 2025 only and the market exists in better shape as 2026 approaches. If this is the case then Lee believes that Equities have already made their lows with the S&P 500 at 4,835 on April 7. This will be the better-case scenario of all the possible outcomes. However, if the market feels that the uncertainty is dragging into a few more quarters in 2025 then that could be harmful for the stock market.
CNBC’s Steve Liesman added to Tom Lee’s comments by mentioning that the current stock market is the President’s market. He highlighted that when President Trump took charge the stock market rallied, however, the later policies hampered the sentiment and took the stock market down with it. Liseman further elaborated that before all these policy uncertainties the forecasts for GDP in 2025 were at 2% growth each quarter. However, now the first quarter ended up at -0.3% with an expectation of 1.6% growth next quarter. Liseman concluded that the market might see the economy bouncing back in the next quarter allowing investors to make sense of the outlook.
Amidst this uncertainty, Lee has emphasized the importance of staying invested in times of volatility to reap the benefits. We have covered more analysis from Tom Lee in 10 Best Growth Stocks to Buy According to Billionaires.
Our Methodology
To curate the list of the 10 best NASDAQ stocks to buy according to billionaires, we used the Finviz stock screener and Insider Monkey’s billionaire database. Using the screener we aggregated a list of stocks trading on NASDAQ. After sorting the list by market cap, we checked the number of billionaires holding each stock and ranked the stocks in ascending order of the number of billionaire investors. We have also added the total value of billionaire holdings and the hedge fund sentiment around each stock.
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)
Number of Hedge Funds: 317
Number of Billionaire Investors: 39
Value of Billionaire Holdings: $53,356,256,512
Microsoft Corporation (NASDAQ:MSFT) is an international technology company that develops and sells a range of software, services, devices, and solutions. The company’s operations are segregated into three main segments including Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. The company is known for its productivity tools such as Microsoft 365 and LinkedIn.
On May 2, CMB International Securities analyst Saiyi He maintained a Buy rating on the stock with a price target of $510.3. The analyst noted that the company posted growth in net revenue and profit during the third quarter of fiscal 2025, which surpassed the market estimates. Microsoft Corporation (NASDAQ:MSFT) achieved $70.1 billion in revenue after a solid 13% growth year-over-year. The operating income grew 16% during the same time to reach $25.8 billion. Analyst Saiyi noted that the growth was driven by the company’s Intelligent Cloud and More Personal Computing segments.
Microsoft Corporation (NASDAQ:MSFT) is experiencing robust demand for its AI cloud services which continues to outpace the data center capacity. The analyst highlighted that despite the increased investment in AI infrastructure the company has been able to maintain growing its operating profits reflecting its improved execution and efficiency. Microsoft Corporation (NASDAQ:MSFT) is one of the best NASDAQ stocks to buy according to billionaires.
Polen Focus Growth Strategy stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its first quarter 2024 investor letter:
“The top absolute contributors were Amazon, Netflix, and Microsoft Corporation (NASDAQ:MSFT). Microsoft continues to grow impressively despite its immense size, driven primarily by Azure and related cloud offerings. While we expect generative AI to be a tailwind to growth for Azure and Microsoft’s Office and Power Apps businesses, it is still early days on that journey.”
Overall, MSFT ranks 2nd on our list of best NASDAQ stocks to buy according to billionaires. While we acknowledge the potential of MSFT to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. 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 this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
