10 Best Stocks to Buy For Next 10 Years

#4 Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 273

Redditors called Microsoft one of the best companies in the world and said people keep underrating it. One Redditor said it is their biggest stock position, at about 9% of their portfolio. Another said Microsoft’s software is hard to replace, because customers use it every day. Investors have been nervous about whether Microsoft can keep growing as its AI spending climbs. We looked at whether that spending is finally paying off. Find out here.

In the midst of the latest earnings season, Microsoft has surprisingly become a top favorite because of its financial position. While giants like Meta and Alphabet fell sharply after posting negative free cash flows and no clear signs of return on investment, Microsoft Corporation stock rose after the company reported results for the first quarter of fiscal 2027. Bulls believe the rise can continue because Microsoft covers its AI spending with the cash its business generates. Operating cash flow was $58 billion in the quarter, up from $45.06 billion a year earlier, and it covered the $45.2 billion Microsoft spent on data centers and chips. The company also ended the quarter with more cash than debt.

Microsoft management said during the fiscal Q1 call that the company expects to remain cash flow positive for the year. This is a positive sign as rivals bleed money in AI investments with returns still far into the future.

Customers keep asking for more. Revenue from Azure, Microsoft’s cloud service where companies rent computing power and AI tools, grew 48.2% from a year earlier. Management said growth was constrained by delays in computing capacity from outside suppliers, while customer demand continued to exceed available supply. The value of commercial contracts Microsoft has signed but not yet recognized as revenue grew 73% to $677 billion, giving the company a substantial pipeline of future sales. Microsoft also earns more from businesses that upgrade to premium Microsoft 365 offerings, including Copilot, E5 and E7. Management said E7 has already reached millions of paid seats.