We recently compiled a list of the Top 12 Stocks to Buy According to Bourgeon Capital. In this article, we are going to take a look at where Microsoft Corporation (NASDAQ:MSFT) stands against the other stocks.
Bourgeon Capital Management LLC is an investment advisory firm headquartered in Darien, Connecticut. Founded in 1999 by seasoned financial professional John Aniblo Zaro, the firm specializes in actively managed, separate accounts with investment portfolios consisting primarily of stocks and bonds. In 2002, Bourgeon Capital expanded its leadership team when Michael Keohane joined SAC Capital to co-manage the firm’s long/short hedge fund. With a portfolio value of nearly $535.55 million by the end of December 2024, Bourgeon Capital is known for providing personalized investment strategies designed to manage risk while achieving long-term growth.
John Zaro, the firm’s founder and managing partner, has an extensive background in investment management spanning several decades. In addition to his Bachelor of Arts degree in Political Science and Economics from Stanford University, he is a Chartered Financial Analyst (CFA) and an active member of the New York Society of Security Analysts.
John Zaro’s career in finance has been marked by influential roles at major financial institutions; it began at Morgan Stanley Smith Barney LLC where he held the role of vice president from 1984 to 1991. Later, he served as a portfolio manager and vice president at J.P. Morgan Investment Management from 1991 to 1997 during which he managed substantial assets for clients. Just before establishing Bourgeon Capital, Zaro held the positions of Chief Investment Officer and Managing Director at Warburg Pincus Asset Management from 1997 to 1999. During his time there, he played a key role in shaping investment strategies for high-net-worth clients. With expertise in portfolio and alpha target management, Zaro was instrumental in refining investment processes for private clients and high-net-worth individuals.
With over two decades of experience, Zaro founded Bourgeon Capital with the vision of offering a more client-centric approach to wealth management. His goal has always been to foster strong, long-term relationships with clients through honest and strategic financial guidance. Bourgeon Capital continues to uphold this commitment, ensuring that each client’s investment strategy is tailored to their unique financial needs and aspirations.
In recognition of his accomplishments in wealth management, Morgan Stanley announced in 2022 that Zaro, then serving as a First Vice President and Financial Advisor at the firm’s Wealth Management office, was named to Forbes Magazine’s prestigious list of Top Next-Gen Wealth Advisors. This ranking evaluates candidates based on various qualitative and quantitative factors, including industry experience, leadership experience, assets under management, revenue trends, and compliance records. The selection process also incorporates insights gained from extensive interviews.
Bourgeon Capital’s investment philosophy is centered on achieving consistent, long-term returns while minimizing volatility. The firm prioritizes risk management by employing strategies that aim to reduce extreme market fluctuations. A key approach under Zaro’s leadership has been investing excess cash in the bond market to capitalize on higher interest rates. This strategy reflects the firm’s commitment to balancing risk and reward while ensuring that clients’ investments align with their financial goals.
Our Methodology
The stocks discussed below were picked from Bourgeon Capital’s Q4 2024 13F filings. They are compiled in the ascending order of Bourgeon Capital’s stake in them as of December 31, 2024. In order to assist readers with more context, we have included the hedge fund sentiment regarding each stock using data from over 1000 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
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 Fund Holders as of Q4: 317
Bourgeon Capital’s Equity Stake: $23.12 Million
Microsoft Corporation (NASDAQ:MSFT), based in Redmond, Washington, is a global technology leader known for its advancements in personal computing, cloud services, artificial intelligence, and gaming. Founded in 1975 by Bill Gates and Paul Allen, the company gained prominence with MS-DOS in the 1980s and later revolutionized the personal computing industry with its Windows operating system. Going public in 1986, Microsoft experienced rapid financial growth and expanded its reach beyond software, venturing into gaming with the Xbox console in 2001 and enhancing communication with its acquisition of Skype in 2011. In recent years, Microsoft Corporation (NASDAQ:MSFT) has focused heavily on artificial intelligence and cloud computing, strengthening its partnership with OpenAI in 2023 and launching AI-powered tools such as Microsoft 365 Copilot, Windows Copilot, and Microsoft Copilot to enhance user experiences. By October 2024, the introduction of Copilot Labs and Copilot Vision reaffirmed its commitment to AI-driven innovation, ensuring Microsoft remains at the forefront of the evolving technology landscape.
Microsoft Corporation (NASDAQ:MSFT) has announced a $700 million investment in Poland to expand its existing data center, enhance AI capabilities, and strengthen cybersecurity. The announcement was made in Warsaw by Microsoft Vice Chair and President Brad Smith alongside Polish Prime Minister Donald Tusk. This investment builds on Microsoft’s initial $1 billion commitment in 2020, which led to the establishment of Poland’s first regional data center, operational since 2023. The second phase of investment, running until mid-2026, will further develop AI technology and cybersecurity initiatives, including deeper collaboration with Poland’s defense forces. Given Poland’s strategic role in regional security, especially following Russia’s invasion of Ukraine, Microsoft aims to ensure the country remains at the forefront of technological advancements.
In the fourth quarter of 2024, Microsoft Corporation (NASDAQ:MSFT) reported revenue of $69.63 billion, reflecting a 12% increase compared to the previous year. The company’s operating income rose to $31.65 billion, marking a 17% year-over-year growth. Additionally, Microsoft exceeded expectations with earnings per share (EPS) of $3.23, surpassing analyst estimates of $3.12 by $0.11. With consistent financial growth, strong profitability, and continued expansion in AI and cloud computing, Microsoft remains among the top stocks to buy for those seeking long-term stability and innovation-driven growth.
Alger Spectra Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q4 2024 investor letter:
“Microsoft Corporation (NASDAQ:MSFT) is a beneficiary of corporate America’s transformative digitization. The company operates through three segments: Productivity and Business Processes (Office365, LinkedIn, and Dynamics), Intelligent Cloud (Server Products and Cloud Services, Azure, and Enterprise Services), and More Personal Computing (Windows, Devices, Gaming, and Search). During the quarter, Microsoft delivered better-than-expected fiscal first-quarter revenues, beating analyst estimates across all three segments. In the Intelligent Cloud business, Azure revenue grew 34% year over-year, slightly above consensus, with AI Services contributing 12% to Azure’s growth, up from 11% in the previous quarter, as demand for AI continues to outpace capacity. However, shares declined after management signaled a potential deceleration in Azure growth for the next quarter and highlighted a negative earnings impact from OpenAI-related losses. Additionally, concerns over significantly increased AI-related capital expenditures (CapEx) raised questions about short-term profitability despite the long-term growth potential. While these near-term challenges led to shares detracting from performance for the quarter, we remain confident in Microsoft’s ability to maintain its leadership in AI.”
Overall MSFT ranks 2nd on our list of the stocks to buy according to Bourgeon Capital. 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.
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Disclosure: None. This article is originally published at Insider Monkey.