We recently published a list of 13 Best NASDAQ Stocks to Buy So Far in 2025. In this article, we are going to take a look at where Microsoft Corporation (NASDAQ:MSFT) stands against other NASDAQ stocks to buy in 2025.
On April 4, Wedbush analyst Dan Ives appeared on CNBC to discuss the potential impact of current tariffs and compared the situation to an economic armageddon. If the current tariffs remain in place, Ives thinks it would lead to a 15% to 20% demand reduction across the board. He thinks that investor anxiety is much higher considering how things were in the March 2020 COVID-19 crash earlier. The analyst thinks that investors should now focus on the likelihood of tariff adjustments from comments about negotiations, the impact on consumer-focused companies, and the potential for demand destruction. He even thinks that companies may refuse to provide guidance in the first-quarter earnings calls due to the persistent tariff uncertainty.
Ives thinks that a lot of tech companies will not be able to absorb high tariff increases and rather this cost will be passed on to the consumers which will lead to significant margin erosion and even potential sales declines. He indicated that tech stocks are currently pricing in a 10% to 15% cut to numbers. He suggests that investors should now look at companies with strong long-term potential as he believes earnings may normalize in 2025 and 2026. The analyst also addressed the defensive performance of defense contractors. While acknowledging the relative stability here, Ives cautioned that even these even such sectors are not immune to tariffs. He noted the significant foreign component, specifically 40% to 50% in some instances, in hardware and other sectors.
We sifted through the financial media reports to compile a list of the top NASDAQ stocks to buy for 2025. We then selected the 13 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Is Microsoft Corp. (NASDAQ:MSFT) the Best NASDAQ Stock to Buy So Far in 2025?
A development team working together to create the next version of Windows.
Number of Hedge Fund Holders: 317
Microsoft Corporation (NASDAQ:MSFT) develops and supports software, services, devices, and solutions. One of its main businesses is its Productivity and Business Processes segment. It offers Office, Exchange, SharePoint, Microsoft Teams, office 365 Security & Compliance, Microsoft Viva, and Microsoft 365 Copilot. Its products are sold through OEMs, distributors, and resellers.
On March 31, Jefferies analyst Brent Thill reaffirmed a Buy rating on the company but lowered the price target from $550 to $500. While this sentiment came from software sector adjustments in general, the firm is confident in the company’s ability to capitalize on the expanding AI sector. Brent Thill believes that the company’s integration of AI into Azure and Microsoft 365 Commercial Cloud will significantly help its growth.
Microsoft Corp.’s (NASDAQ:MSFT) AI platform helps it accelerate the development of advanced AI models and is called the Azure AI Foundry. It gained over 200,000 monthly active users within just 2 months of its launch. Similarly, the company also offers Copilot Studi0 which creates personalized AI agents. It helped 160,000 organizations create 400,000 agents in 3 months.
Columbia Seligman Global Technology Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q4 2024 investor letter, believing that Oracle is positioned to capitalize on the AI-driven cloud demand:
“Within software, the fund maintained an underweight position to Microsoft Corporation (NASDAQ:MSFT), which proved beneficial as share price for the company fell during the fourth quarter. Microsoft’s outlook for its Azure business came down slightly, which hampered the stock price at times during the quarter and, combined with losses on the Open AI business, led to a disappointing end to 2024. The company has guided its capital expenditure spending up slightly and investors continue to wait for additional monetization from the company’s large commitment to AI infrastructure spending. The fund continued to hold an overweight allocation to Oracle as we believe Oracle is positioned to be a major beneficiary of the AI rollout and has the potential to compete with other large cloud providers, such as Amazon, Alphabet and Microsoft. Oracle shares moved lower during the quarter and the stock suffered its worst day of the year in December, as the company narrowly underperformed analysts’ average estimates. Oracle’s business model remains strong as demand for computer power that can handle AI is increasing and the company’s revenues from its cloud infrastructure unit moved higher year over year.”
Overall, MSFT ranks 2nd on our list of the best NASDAQ stocks to buy so far in 2025. While we acknowledge the growth potential of MSFT, our conviction lies in the belief that AI stocks hold great promise for delivering high 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.
Disclosure: None. This article is originally published at Insider Monkey.
