3. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holdings in Q4 2025: 312
Tech giant Microsoft Corporation (NASDAQ:MSFT)’s shares have struggled in 2026. They are down by 19% year-to-date and by more than a percent over the year. Cramer has discussed the firm several times over the past couple of months. He hasn’t praised Microsoft Corporation (NASDAQ:MSFT) much and pointed out that the firm’s Copilot AI software was struggling to attract users. Goldman Sachs also discussed the technology company’s shares on the 6th. It kept a Buy rating and commented that the recent share price movement appeared to have accounted for most of the risk in Microsoft Corporation (NASDAQ:MSFT). Benchmark initiated coverage on the 1st and set a Buy rating along with a $450 share price target. The financial firm remarked that the recent share price weakness represents a buying opportunity. Cramer discussed Goldman’s coverage, which had expressed confidence in Microsoft Corporation (NASDAQ:MSFT)’s sum of parts:
“How about sum of the parts? Look at this, Goldman Sachs with a sum of the, what are they gonna, break it up? Yeah, let’s break it up, let’s break it up into Azure and Xbox! . . .To tell you the truth, I thought it was so absurd I didn’t finish it.”
Mar Vista U.S. Quality Strategy discussed Microsoft Corporation (NASDAQ:MSFT) in its Q1 2026 investor letter:
“Microsoft Corporation’s (NASDAQ:MSFT) stock came under pressure in Q1 as investors grew concerned about the rising costs required to fund its accelerating AI infrastructure build-out in 2026. This, combined with heightened expectations for Azure growth, led to a sell-off following the December quarter earnings report, when Azure revenue grew “only” 39% year over year.
Investors have increasingly questioned the return on investment associated with Microsoft’s large and rapidly expanding capital expenditures tied to AI infrastructure. While these investments are substantial, we believe Microsoft is well positioned to support this growth through its strong and expanding operating cash flows. Although the company has meaningful exposure to OpenAI, OpenAI’s ability to raise over $100 billion should help alleviate investor concerns regarding its capacity to meet large contractual commitments.
Microsoft remains a top portfolio holding, supported by its financial strength, diversified revenue streams, and broad customer base, all of which provide resilience. The company is experiencing strong growth in Azure, its hyperscale cloud platform, which is capacity constrained, alongside increasing adoption of its Copilot offerings across its extensive enterprise customer base. We believe Microsoft should be well positioned to generate attractive long-term returns from its partnership with OpenAI and to effectively monetize generative AI capabilities across its global enterprise IT footprint through its expanding suite of Copilot and AI-enabled products.”
