Microsoft (MSFT) Surged on Accelerated Azure Revenue Growth

Kovitz Investment Group Partners, LLC, an investment management company, released its “Kovitz Core Equity Strategy” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the second quarter, the strategy returned 7.9% compared to the S&P 500’s 10.9% return. Equity markets saw notable volatility after the President’s “Liberation Day” tariff announcement on April 2nd. The S&P 500 dropped 11% initially but later rallied 25% in the quarter after the tariffs were postponed by 90 days on April 9th. Additionally, you can review the fund’s top 5 holdings to see its best picks for 2025.

In its second-quarter 2025 investor letter, Kovitz Core Equity Strategy 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 5.24%, and its shares gained 31.06% of their value over the last 52 weeks. On August 5, 2025, Microsoft Corporation (NASDAQ:MSFT) stock closed at $527.75 per share, with a market capitalization of $3.923 trillion.

Kovitz Core Equity Strategy stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its second quarter 2025 investor letter:

“We initiated a position in Microsoft Corporation (NASDAQ:MSFT) at the beginning of the year on the premise that cloud infrastructure revenues were set to accelerate as capital expenditures shifted to monetizable servers in favor of spending on datacenter buildouts. In its most recently reported results, the company reported a significant acceleration in Azure revenue growth and indicated that growth will sustain at these levels for the following quarter, which was several points above consensus expectations. Earnings estimates for the next several years moved higher as a result.”

Microsoft’s (MSFT) Focus on Innovation Supports its Dividend Stability

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 previous quarter. In the fourth quarter of fiscal year 2025, Microsoft Corporation (NASDAQ: MSFT) reported revenue of $76.4 billion, representing an 18% increase, or 17% when adjusted for constant currency. While we acknowledge the risk and potential of Microsoft Corporation (NASDAQ: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 Microsoft Corporation (NASDAQ:MSFT) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Microsoft Corporation (NASDAQ:MSFT) and shared the list of stocks Jim Cramer recently discussed. In addition, please check out our hedge fund investor letters Q2 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.