Microsoft Corporation (MSFT): Among Billionaire Chris Hohn's Stock Picks with Huge Upside Potential
The Children's Investment Fund Management, also known as TCI Fund Management, is a British hedge fund firm headquartered in London and founded in 2003 by Sir Christopher Anthony Hohn. Hohn, a British billionaire and Harvard MBA graduate (Baker Scholar), also serves as the fund's portfolio manager. TCI is distinguished by its value-oriented, fundamental investment philosophy and its focus on long-term, high-conviction positions in globally competitive businesses. The fund employs a private equity-style approach to public market investing, relying on deep fundamental research, constructive engagement with company management, and a willingness to use shareholder activism when necessary to drive performance. Known for its concentrated portfolio structure, the TCI Master Fund maximizes alpha by targeting high-quality companies with sustainable competitive advantages and predictable free cash flow.
TCI's investment strategy includes opportunistic ventures into corporate transformations and special situations. In line with its activist reputation, the firm is prepared to exert influence on company direction and governance when it deems necessary to unlock shareholder value. This assertive approach has helped cement TCI's reputation as one of the most successful and influential hedge funds in the world.
A significant aspect of TCI's operations is its real estate lending business, which was launched in 2014 under the TCI Real Estate Partners Lending Funds. These funds invest alongside The Children's Investment Fund Foundation (CIFF), the philanthropic arm initially supported by the fund's profits. The lending strategy centers on first mortgage and senior secured lending for high-quality assets, with a particular focus on prime locations in major North American and European cities. This real estate arm reflects TCI's broader investment philosophy, seeking security, quality, and long-term value.
As of Q4 2024, TCI managed $42.4 billion in securities across just nine core stock holdings, reflecting its highly concentrated and conviction-driven investment approach. The firm's blend of fundamental analysis, disciplined value investing, and strategic activism continues to position it as a powerful force in global capital markets. Through its unique alignment of investment and philanthropic missions, TCI also exemplifies how hedge funds can blend financial performance with broader societal impact.
For this article, we searched through TCI Fund Management's Q4 2024 13F filings to identify billionaire Chris Hohn's stock picks with the highest upside potential. We compiled the equities with upside potential higher than 8% at the time of writing this article and analyzed why they stood out as sound potential investments. Finally, we ranked the stocks based on the ascending order of their upside potential. To assist readers with more context, we mentioned the hedge fund sentiment around each stock using data from 1,009 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
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 363.5% since May 2014, beating its benchmark by 208 percentage points ().
A development team working together to create the next version of Windows.Microsoft Corporation (NASDAQ:MSFT), a leading multinational technology conglomerate headquartered in Redmond, Washington, delivered a strong third-quarter performance that surpassed analyst expectations across all key metrics. The company reported earnings per share of $3.46, beating the consensus estimate of $3.23, and reflecting an 18% year-over-year increase in net income to $25.8 billion. Revenue for the quarter reached $70.1 billion, up 13% from the same period last year, also outperforming the projected $68.53 billion.
Segment-wise, Microsoft Corporation (NASDAQ:MSFT)'s 'Intelligent Cloud' division, which includes Azure and server products, generated $26.8 billion in revenue, a 21% year-over-year increase, driven by robust enterprise demand for AI infrastructure and cloud solutions. 'Productivity and Business Processes,' home to Microsoft 365, LinkedIn, and Dynamics, posted revenue of $29.9 billion, up 10% year-on-year, while 'More Personal Computing,' which includes Windows, Xbox, and Bing, brought in $13.4 billion, a 6% increase.
Capital expenditures rose sharply to $16.7 billion, up 52% year over year, exceeding analyst expectations and highlighting Microsoft Corporation (NASDAQ:MSFT)'s aggressive investment in AI and cloud infrastructure. While the company has recently paused or canceled several data center leases, the surge in spending underscores its commitment to scaling capacity in high-demand areas, particularly around AI workloads.
CEO Satya Nadella emphasized that AI and cloud technologies are becoming fundamental to business efficiency and innovation across industries. However, market concerns linger over potential oversupply in AI computing resources, particularly given Microsoft Corporation (NASDAQ:MSFT)'s $14 billion investment in OpenAI and the rapidly evolving landscape of generative AI.
Despite these uncertainties, Microsoft Corporation (NASDAQ:MSFT)'s diversified revenue streams, dominant position in enterprise software, and ongoing AI leadership position it well for continued long-term growth. The company's ability to consistently outperform expectations reinforces its standing as a core holding in institutional portfolios.
Overall, MSFT ranks 4th on our list of Billionaire Chris Hohn's stock picks with huge upside potential. While we acknowledge the potential of these stock picks, 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: and .
Disclosure: None. This article is originally published at .
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
22 minutes ago
- Yahoo
LKQ Shares Crash To 52-Week Low On Slashed Outlook
LKQ Corporation (NASDAQ:LKQ) shares plummeted over 21% on Thursday after the automotive parts distributor reported second-quarter adjusted earnings that missed analyst expectations and significantly cut its full-year guidance, citing ongoing macroeconomic headwinds and a lack of recovery in North American repairable claims. The company reported second-quarter adjusted earnings per share of 87 cents, missing the analyst consensus estimate of 92 cents. Quarterly sales of $3.64 billion (down 1.9% year over year) was in line with the Street view. North American organic revenue outperformed the market even as repairable claims across the entire industry declined 9%. In Europe, LKQ Corporation has replaced more than 25% of the leadership team and continues to focus on reducing costs, rationalizing SKU's and enhancing revenue opportunities, including entering into a strategic partnership to expand our salvage business. Also Read: TransUnion's Upbeat Outlook Shines Through Market Uncertainty Organic parts & services revenue declined 3.4% year‑over‑year (2.7% on a per‑day basis). Acquisitions and divestitures trimmed revenue by 1.0% while foreign exchange rates added 2.3%, resulting in a net 2.1% decrease. The company said its focus on cost reduction measures has resulted in more than $125 million in costs taken out over the past 12 months with an additional $75 million targeted for 2025. Gross profit in the quarter under review remained relatively flat on a year-over-year basis to $1.412 billion, with gross margin flat at 38.8%. View more earnings on LKQ Adjusted EBITDA in the quarter under review decreased to $423 million from $429 million a year ago. The company exited the quarter with cash and equivalents at $289 million, and inventories worth $3.394 billion. As of June 30, 2025, the balance sheet reflected total debt of $4.5 billion, and total leverage, as defined in credit facility, was 2.6x EBITDA. On July 22, the company declared a quarterly cash dividend of 30 cents per share of common stock, payable on August 28. Outlook In North America, the company is not seeing a recovery in the repairable claims and tariff uncertainty continues. In Europe, general economic softness and geopolitical unrest are drivers of an uncertain environment. LKQ cut its fiscal year 2025 adjusted EPS guidance to $3.00-$3.30 from $3.40-$3.70, falling short of the $3.52 consensus estimate. Organic revenue for parts and services is expected to decline in the range of 3.5% to 1.5% (prior view: growth of upto 2%). The company's stock has hit a 52-week low of $32.78 following its earnings report. The key factors behind the decline were a miss on adjusted earnings per share and a revised, lower outlook for the full year, both of which have unsettled investors.
Business Wire
23 minutes ago
- Business Wire
i3 Verticals Announces Earnings Release and Conference Call Date for Third Quarter of Fiscal 2025
NASHVILLE, Tenn.--(BUSINESS WIRE)--i3 Verticals, Inc. (Nasdaq: IIIV) ('i3 Verticals' or the 'Company'), announced today that it will release its financial results for the third quarter ended June 30, 2025, on Thursday, August 7, 2025, after the Nasdaq market close. The Company will also host a conference call on Friday, August 8, 2025, at 8:30 a.m. EDT to discuss financial results and operations. To listen to the call live via telephone, participants should dial (844) 887-9399 approximately 10 minutes prior to the start of the call. A telephonic replay will be available from 11:30 a.m. EDT on August 8, 2025, through August 15, 2025, by dialing (877) 344-7529 and entering Confirmation Code 4426770. To listen to the call live via webcast, participants should visit the 'Investors' section of the Company's website, and go to the 'Events & Presentations' page approximately 10 minutes prior to the start of the call. The online replay will be available on this page of the Company's website beginning shortly after the conclusion of the call and will remain available for 30 days. About i3 Verticals The Company provides innovative software and services solutions to its public sector customers. These comprehensive solutions cover a broad range of applications, including cloud native enterprise software, all of which enable state and local governments and related agencies to serve their constituents in an efficient and seamless manner. With thousands of software installations across all 50 states and Canada, i3 Verticals is a leader in the public sector vertical. More information about the Company can be found at
Yahoo
an hour ago
- Yahoo
Coinbase Global (COIN): 'For All I Know It's A Pump And Dump, I Don't See Anybody Dumping?' Says Jim Cramer
We recently published . ABC is one of the stocks Jim Cramer recently discussed. Coinbase Global, Inc. (NASDAQ:COIN) is a cryptocurrency exchange whose 57% year-to-date share price gain has resulted from legislation benefiting stablecoins and the bullish run in Bitcoin. Cramer's previous comments about Coinbase Global, Inc. (NASDAQ:COIN) asserted that the firm has benefited from its large market share. This time, he discussed Coinbase Global, Inc. (NASDAQ:COIN)'s valuation: '[On Cantor going to $500] I think that's within reason. PE's of these companies, this is the lowest one in park, at 40 times earnings, well Robinhood's not that low yet, I mean not that high. I mean People have to understand P/E analysis is not working. Robinhood's at 62 times earnings. COIN is at 40 times earnings. And people will say, uh, Jim, the multiple's too high. And I come back and say, do you really think the retail investor knows what a multiple is? Like what are you like, some sort of abstraction? See, this is a new world. I'm realistic. Look, for all I know it's a pump and dump, I don't see anybody dumping? I'll tell you when it's over. When the insiders do big deals and sell. And when there's secondaries. And there haven't been. That's what caused 2014. That's what caused it to end. 2020. That's what caused it to end. I mean, 2000. That's what caused it. 2000 being the vicious number of secondaries between January and March of 2021 and also about 2020. These years were just horrendous. And these companies broke down. I'm waiting for that. But it's not happening. So I wanna give people my history. Which is that it should have happened by now. Like Karp should have been selling and the companies should have been raising money. But they don't need to. These companies are incredibly well capitalized. And when people want to try and say, you know what they're like what happened to the dotcoms, I remember the dotcoms. They didn't have any money.' While we acknowledge the potential of COIN 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 . READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now. Disclosure: None. This article is originally published at Insider Monkey.
