Microsoft (MSFT): A Bull Case Theory
Radu Bercan / Shutterstock.com
Microsoft (MSFT) is a dividend stock that stands out with a strong business model, reliable dividends, and massive growth potential. Microsoft, founded in 1975 by Bill Gates and Paul Allen, is a leader in cloud computing, artificial intelligence, and enterprise software. The company has a history of dividend growth, with 20 consecutive years of annual payout increases, and a 10-year dividend growth rate of 10.2%. Microsoft's dividend policy complements its $60 billion share repurchase program, creating a powerful total return proposition.
Microsoft's future growth prospects are driven by its leadership in cloud computing (Azure), artificial intelligence (AI), and enterprise software. The company's $80 billion investment in AI infrastructure in FY2025 underscores its commitment to scaling high-margin AI services. Key growth drivers include AI monetization, cloud and hybrid work solutions, and strategic partnerships. Microsoft's AAA credit rating and diversified cash flows provide resilience, making it an attractive long-term investment with a 12-month average price target of $513 (11.8% upside).
Microsoft's key traits define true 'forever stocks': wide economic moats, consistent free cash flow generation, and management teams that balance reinvestment with shareholder returns. While their dividend yields may appear modest, their double-digit dividend growth rates and massive share buyback programs create powerful compounding potential. Microsoft's strong financials, growth prospects, and commitment to returning capital to investors make it an ideal forever holding.
Previously, we covered a on Microsoft by Ray Myers, published on May 25, which highlighted the company's critical role in AI infrastructure and energy needs. The stock has appreciated by 7.02% since our coverage. This is because the previous thesis on energy needs for AI played out. Max Dividends shares a similar view, emphasizing Microsoft's leadership in cloud computing, AI, and enterprise software, with a history of dividend growth and massive growth potential. The conviction in the thesis has strengthened, with Microsoft's $80 billion investment in AI infrastructure and a 12-month average price target of $513.
Microsoft is on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 284 hedge fund portfolios held MSFT at the end of first quarter which was 317 in the previous quarter.
Microsoft is on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 284 hedge fund portfolios held MSFT at the end of first quarter which was 317 in the previous quarter. While we acknowledge the risk and potential of MSFT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article was originally published at Insider Monkey.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
7 minutes ago
- Yahoo
Why Starbucks (SBUX) is Gaining Attention Among Food Dividend Investors
Starbucks Corporation (NASDAQ:SBUX) is included among the 10 Best Food Stocks with Dividends. A close-up of a freshly roasted coffee bean, accompanied by a vintage aluminum scoop. The company seems to be reaching a key turning point with Brian Niccol stepping in as CEO, drawing comparisons to the company's 2008 revival under Howard Schultz. A major focus under his leadership is improving the mobile ordering system, which now accounts for roughly 30% of US sales but has negatively impacted service quality and the in-store experience. To tackle this issue, Starbucks Corporation (NASDAQ:SBUX) brought in Meredith Sandland— former Taco Bell executive and founder of Empower Delivery— to enhance order sequencing through machine learning. The move highlights Niccol's strategic focus on assembling strong, capable teams. Starbucks Corporation (NASDAQ:SBUX) is a strong dividend payer, having paid regular dividends to shareholders for 60 consecutive quarters. During this time, the company's dividend has grown at an average annual rate of 20%, with increases sustained for 14 straight years. It offers a quarterly dividend of $0.61 per share and has a dividend yield of 2.58%, as of July 27. While we acknowledge the potential of SBUX as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: READ NEXT: and Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
7 minutes ago
- Yahoo
What Makes The Hershey Company (HSY) a Stable Food Dividend Stock?
The Hershey Company (NYSE:HSY) is included among the 10 Best Food Stocks with Dividends. A close-up of hands deftly moulding a bar of chocolate. The Hershey Company (NYSE:HSY) is a well-known consumer staples company primarily recognized for its confections and snacks. While the company has broadened its product range to include items like popcorn and pretzels, chocolate remains one of its core offerings. Seen as an affordable indulgence, Hershey's chocolate continues to be highly popular, driving steadily increasing sales over time. The Hershey Company (NYSE:HSY) recently revealed it will increase prices for the second time in just over a year, attributing the hike to ongoing high cocoa costs that will lead to a double-digit rise in candy prices. While cocoa prices have dropped from their record high of $12,000 per metric ton, they still trade above $8,000 per metric ton. Many analysts expect these elevated prices to persist in the near term, largely due to last year's adverse weather conditions in Western Africa. The Hershey Company (NYSE:HSY) is also a strong dividend payer, having raised its payouts for 15 consecutive years. The company offers a quarterly dividend of $1.37 per share and has a dividend yield of 2.93%, as of July 27. While we acknowledge the potential of HSY as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: READ NEXT: and Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
7 minutes ago
- Yahoo
General Mills (GIS): A Food Dividend Stock Worth Watching
General Mills, Inc. (NYSE:GIS) is included among the 10 Best Food Stocks with Dividends. A worker in a production facility packaging arbitrary food products, reflecting the company's commitment to comprehensive production standards. The company's top priority for fiscal 2026 is to revive organic sales growth driven by volume. To achieve this, it plans to increase investments in consumer value, product innovation, brand building, and new offerings— all guided by its established experience framework. A key highlight includes the national rollout of Blue Buffalo's fresh pet food line, expected in late 2025. In addition, the company aims to deliver strong cost savings through its Holistic Margin Management program and enhance efficiency through a global transformation initiative, freeing up more resources to support growth. General Mills, Inc. (NYSE:GIS) reported mixed earnings in fiscal Q4 2025, with revenues of $4.56 billion, down 3.3% from the same period last year. However, the company's cash position remained strong. The company generated $2.9 billion in operating cash flow, which amounted to 126% of after-tax earnings, while free cash flow represented 97% of adjusted after-tax earnings. Dividend payments declined by 2% to $1.3 billion, primarily due to a reduced average number of shares outstanding. On June 25, General Mills, Inc. (NYSE:GIS) declared a 1.7% hike in its quarterly dividend to $0.61 per share. This was the company's fourth consecutive year of dividend growth. In addition, it has paid regular dividends to shareholders for 126 years in a row. The stock has a dividend yield of 4.78%, as of July 27. While we acknowledge the potential of GIS as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: READ NEXT: and Disclosure: None.
