Growth in Azure Lifted Microsoft Corporation (MSFT) in Q2

Sands Capital, an investment management company, released its “Sands Capital Technology Innovators Fund” Q2 2025 investor letter. A copy of the letter can be downloaded here. Technology Innovators focus on pioneering businesses worldwide that serve as key drivers or beneficiaries of significant long-term changes driven by technology. The fund returned 26.0% (net) in the second quarter compared to a 21.9% return for the benchmark, MSCI ACWI Info Tech and Communication Services Index. Easing geopolitical concerns, renewed AI optimism, resilient macroeconomic data, strong corporate earnings, and technical tailwinds boosted the markets for a quick recovery in the quarter. You can check the fund’s top 5 holdings to know more about its best picks for 2025.

In its second quarter 2025 investor letter, Sands Capital Technology Innovators Fund highlighted stocks such as Microsoft Corporation (NASDAQ:MSFT). Microsoft Corporation (NASDAQ:MSFT) is a multinational software company that develops and supports software, services, devices, and solutions. The one-month return of Microsoft Corporation (NASDAQ:MSFT) was 1.69%, and its shares gained 20.91% of their value over the last 52 weeks. On July 23, 2025, Microsoft Corporation (NASDAQ:MSFT) stock closed at $505.87 per share, with a market capitalization of $3.76 trillion.

Sands Capital Technology Innovators Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its second quarter 2025 investor letter:

"Microsoft Corporation (NASDAQ:MSFT) is a leading global software and cloud infrastructure business. The company delivered better than-expected quarterly results, with a reacceleration in Azure growth as the key highlight. Demand for AI-related services remains strong, and Microsoft also benefited this quarter from sequential improvement in non-AI-related Azure revenue. We believe Microsoft is well positioned to facilitate and benefit from enterprise adoption of AI services, both at the infrastructure and application layers."

Microsoft Corporation (NASDAQ:MSFT) is in second position our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 284 hedge fund portfolios held Microsoft Corporation (NASDAQ:MSFT) at the end of the first quarter compared to 317 in the previous quarter. In the fiscal third quarter of 2025, Microsoft Corporation (NASDAQ:MSFT) reported $70.1 billion in revenues, up 13% year-over-year. While we acknowledge the potential of Microsoft Corporation (NASDAQ:MSFT) 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.

In another article, we covered Microsoft Corporation (NASDAQ:MSFT) and shared the list of AI stocks in the spotlight. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.