Microsoft offers the biggest potential reward for investors looking to invest in stocks over the next five to 10 years, according to veteran investor Mark Hawtin. Big Tech’s dominant position and its critical role in the enterprise software ecosystem makes it ideal for an acquisition through a downturn in the global economy, said Hawtin, chief investment officer at Zurich-based GAM Investments. “It’s without a doubt our favorite big name,” he told CNBC ProTalks on Wednesday. “If you have to make an investment for five to ten years, and you’re not allowed to change your mind, then Microsoft, to me, would be the clearest risk-reward player over that time period among those big companies.” Hawtin oversees several global long-only and long/short funds in the Greater Amman Municipality, which has assets under management of approximately $80 billion. He invests in disruptive growth and technology stocks. MSFT 1Y Line In a wide-ranging discussion with CNBC’s Jumana Persic, Hawtin also noted that Microsoft will buck the trend among its peers and report an earnings increase this year. He is not alone in this opinion. FactSet data shows that analysts expect a 2% increase in earnings per share this year for S&P 500 companies overall, compared to the 8.5% increase in EPS expected from Microsoft. According to Hawtin, Microsoft will outperform the broader market due to the diversity of its revenue stream. He said the Redmond, Washington-based company will continue to see growth in sales because it is an integral part of many of its customers’ technologies. For example, millions of businesses around the world use Microsoft Windows, Office 365 and their Azure cloud computing platform as the backbone of their IT infrastructure. These systems either have no equivalent competitor or are difficult to replace immediately. “I think one of the key things about understanding Microsoft is that it’s very ingrained and embedded in many companies,” Houghton said. This unique ability also means that it will benefit from advances in AI more profitably than other companies that focus solely on AI, according to Hawtin. He added, “Just like Teams as a video conferencing opportunity compared to Zoom as a standalone company.” Microsoft bundles its Teams workplace collaboration software with Office 365, tapping into growth in rivals Zoom and Slack, which are owned by Salesforce. Over several decades, the company’s stock has also been in the top 10 of the S&P 500 more than any other company, according to Hawtin. “There are many companies that have tried to eliminate Microsoft without success,” he added.
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