Is MSFT a “Baby Thrown Out with the Bath Water” Stock?

2 hours ago 3

Soumya Eswaran

Wed, April 29, 2026 astatine 6:51 AM CDT 3 min read

Polen Capital, an concern absorption company, released its “Polen Focus Growth Strategy” first-quarter 2026 capitalist letter. A transcript of the missive tin beryllium downloaded here. The archetypal 4th of 2026 was highly volatile for US equities, driven by AI disruption concerns and the US-Israel struggle successful Iran and the Middle East. In this backdrop, the Polen Focus Growth Strategy declined 17.16% successful the quarter, compared to a -9.78% instrumentality for the Russell 1000 Growth and -4.33% instrumentality for the S&P 500. The Strategy focuses connected mission-critical businesses with recurring gross and competitory advantages and capitalizes connected the volatility to summation investments successful bundle and semiconductor companies. The Strategy remains assured successful the semipermanent imaginable of the Portfolio, emphasizing businesses with beardown economical moats, robust equilibrium sheets, and multi-year net growth. In addition, delight cheque the Strategy’s apical 5 holdings to cognize its champion picks successful 2026.

In its first-quarter 2026 capitalist letter, Polen Focus Growth Strategy highlighted Microsoft Corporation (NASDAQ:MSFT) arsenic a "Baby Thrown Out with the Bath Water". Microsoft Corporation (NASDAQ:MSFT) is simply a multinational bundle institution that develops and supports software, services, devices, and solutions, holding ascendant positions successful software, unreality infrastructure, generative AI, and gaming. On April 28, 2026, Microsoft Corporation (NASDAQ:MSFT) banal closed astatine $429.25 per share. One-month instrumentality of Microsoft Corporation (NASDAQ:MSFT) was 16.21%, and its shares gained 8.60% implicit the past 52 weeks. Microsoft Corporation (NASDAQ:MSFT) has a marketplace capitalization of $3.19 trillion.

Polen Focus Growth Strategy stated the pursuing regarding Microsoft Corporation (NASDAQ:MSFT) successful its Q1 2026 capitalist letter:

"Amidst this capitalist panic, it would look to america that the proverbial ‘baby’ has been ‘thrown retired with the bathwater’. Take Microsoft Corporation (NASDAQ:MSFT) for example, aft the quarter’s merchantability disconnected is present trading astatine the aforesaid valuation (~20x 12-month guardant earnings) arsenic Exxon Mobil contempt generating ~4x the magnitude of operating nett and ~2x the escaped currency travel (even with Microsoft’s dense concern into AI infrastructure) and delivering materially higher net growth, each with a overmuch greater grade stableness and consistency done the cycle. To us, this exemplifies the dichotomy of cognition vs. reality."

Truist Raises Price Target to $675, Reiterates Buy

Microsoft Corporation (NASDAQ:MSFT) ranks 2nd connected our database of 40 Most Popular Stocks Among Hedge Funds. According to our database, 312 hedge money portfolios held Microsoft Corporation (NASDAQ:MSFT) astatine the extremity of the 4th quarter, the aforesaid arsenic successful the erstwhile quarter. While we admit the imaginable of Microsoft Corporation (NASDAQ:MSFT) arsenic an investment, we judge definite AI stocks connection greater upside imaginable and transportation little downside risk. If you're looking for an highly undervalued AI banal that besides stands to payment importantly from Trump-era tariffs and the onshoring trend, spot our escaped study connected the best short-term AI stock.

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