Starter Stock Portfolio: 5 Large-cap Stocks To Buy

2. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 238

Over the past few years, Microsoft Corporation (NASDAQ:MSFT) has emerged as a strong leader in cloud computing services, with its Azure cloud services business growing by over 50% in 2021, compared with the last year.

Microsoft Corporation (NASDAQ:MSFT) pays an annual dividend of $2.24 per share, yielding 0.74%, with a dividend payout ratio of 28.11%. In October, Morgan Stanley lifted its price target on Microsoft Corporation (NASDAQ:MSFT) to $331, while keeping an Overweight rating on the shares. The company posted an EPS of $2.17 in Q2, beating the estimates by $0.25.

Of the 873 hedge funds tracked by Insider Monkey, 238 funds were bullish on Microsoft Corporation (NASDAQ:MSFT) in Q2, compared with 251 in the previous quarter. These stakes are valued at $62.4 billion.

Baron Opportunity Fund released its second-quarter 2021 investor letter and mentioned Microsoft Corporation (NASDAQ:MSFT) in it. Here is what the firm has to say:

“Shares of Microsoft Corporation, a cloud-software leader and provider of software productivity tools and infrastructure, rose during the quarter following a strong earnings report highlighting solid demand for its broad product stack and continued momentum migrating its business to the cloud. Microsoft was a top contributor in the period because it trades at reasonable free cash flow and earnings valuations, has cloud and digital transformation tailwinds at its back, reported a solid March quarter, and beat Street expectations by a wide margin. Microsoft’s results continued to be strong across the board, with Azure cloud computing revenues up 46% in constantcurrency (“cc”) terms and commercial cloud bookings growth of 38% cc, the best in years. Microsoft also reported robust profitability growth, with operating income expanding 31% and GAAP earnings up 45%. We believe the company is well positioned for continued solid growth and profitability through market share gains as more companies look to transform and digitize their businesses as they move operations to the cloud.”