No. of Hedge Fund Holders: 317
Microsoft Corporation (NASDAQ:MSFT) is a pioneer in the technology sector. A global giant offers a wide range of software, services, and devices, with operations divided into three main segments: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing.
Microsoft Corporation’s (NASDAQ:MSFT) earnings report for Q2 of 2025 revealed revenue of $69.63 billion, up 12.27%, clearing analysts’ estimates by $823.09 million and an EPS of $3.23. The AI segment contributed $13 billion to revenue, while revenue from cloud services was $40.9 billion, up 21%. The company paid $6.2 billion in dividends and carried out a share repurchase worth $3.5 billion. This shows strong, continuous growth despite geo-political headwinds and market headwinds, which analysts write off as “short-term”. The company’s Chairman and Chief Executive Officer, Satya Nadella, commented on the company’s cloud services’ performance, stating:
“Enterprises are beginning to move from proof-of-concepts to enterprise-wide deployments to unlock the full ROI of AI. And our AI business has now surpassed an annual revenue run rate of $13 billion up 175% year-over-year.”
Last year, Mr. Satya Nadella made a trip to Malaysia, as US tech firms continue to reduce their dependence on China as a regional partner due to a shift in US Government policies. Mr. Nadella announced MSFT plans to launch its first cloud region in Malaysia with three data centers by mid-2025.
With its diversified business, robust margins, and substantial cash flow, Microsoft Corporation (NASDAQ:MSFT) continues to be a defensive buy, offering resilience against macroeconomic headwinds and tariff concerns.
Overall, Microsoft Corporation (NASDAQ:MSFT) ranks first on our list of the best beginner stocks. While we acknowledge the potential of MSFT, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. 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 this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
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