Microsoft (MSFT) Fell Along with Mega-Cap Technology Stocks

Impax Asset Management, an investment management company, released its “Impax Global Environmental Markets Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The MSCI All Country World Index (MSCI ACWI), which measures global equities, declined in Q1 as the strength turned negative due to uncertainty surrounding US tariffs. The strategy declined and slightly underperformed its primary benchmark, the MSCI ACWI, during the quarter. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its first-quarter 2025 investor letter, Impax Global Environmental Markets Fund highlighted stocks such as Microsoft Corporation (NASDAQ:MSFT). Microsoft Corporation (NASDAQ:MSFT) is a multinational software company that develops and supports software, services, devices, and solutions. The one-month return of Microsoft Corporation (NASDAQ:MSFT) was 5.38%, and its shares gained 10.49% of their value over the last 52 weeks. On May 29, 2025, Microsoft Corporation (NASDAQ:MSFT) stock closed at $458.68 per share with a market capitalization of $3.409 trillion.

Impax Global Environmental Markets Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q1 2025 investor letter:

“Microsoft Corporation (NASDAQ:MSFT) (Cloud Computing, US) moved lower during the period, in line with the broader de-rating of mega-cap technology stocks. The market also responded negatively to ‘just good enough’ earnings results. Microsoft pushed out expectations for when its cloud platform Azure would reaccelerate growth by two quarters, which was the main driver of disappointment.”

BofA Names Microsoft (MSFT) a Winner in Small-to-Mid-Size Business Software

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

Microsoft Corporation (NASDAQ:MSFT) is in second position our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 284 hedge fund portfolios held Microsoft Corporation (NASDAQ:MSFT) at the end of the first quarter compared to 317 in the third quarter. In the fiscal third quarter of 2025, Microsoft Corporation (NASDAQ:MSFT) reported $70.1 billion in revenues, up 13% year-over-year. While we acknowledge the potential of Microsoft Corporation (NASDAQ:MSFT) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered Microsoft Corporation (NASDAQ:MSFT) and shared latest analyst views on Coatue’s favorite AI stocks. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

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