We recently published a list of Top 10 Trending Stocks as AI Hype Fades. In this article, we are going to take a look at where Microsoft Corporation (NASDAQ:MSFT) stands against other top trending stocks as AI hype fades.

The US stock market took a major hit recently due to tariff-related uncertainties and a broader concern about AI stock valuations. Jeff Sonnenfeld, Yale School of Management senior associate dean for leadership studies, recently talked about the latest data showing a decline in CEO sentiment amid President Donald Trump’s tariff policies.

“We’re seeing with the CEO community, it’s not just the report you had this morning on the plunge in retail sentiment, the plunge in consumer sentiment, and CEO confidence indices by other indices such as Chief Executive Magazine. But we had 100 CEOs across sectors, 60% Republican, about 30% Democrat, 10% independent, and they were overwhelmingly discouraged. There’s a lot of goodwill that had been accumulated after the election. Even though most large CEOs didn’t support President Trump, they did rally and were encouraged to go down to Mar-a-Lago to talk about company-specific issues. The same thing happened in 2017. That goodwill dissipates quickly, and it’s happening right now. 85% think these tariff moves are a disaster, even though they’re in favor of tariffs. They want selective tariffs.”

With tariff deadlines fast approaching, it would be interesting to see how the market reacts to potential changes in President Trump’s policies and stance.

READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In

For this article, we picked 10 stocks Wall Street analysts were discussing lately. With each company we have mentioned the number of hedge fund investors. 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Funds Investors: 158

Jim Lebenthal, Chief Equity Strategist at Cerity Partners, said in a latest program on CNBC that he’s buying Microsoft Corporation (NASDAQ:MSFT) and said the stock is currently trading for a “really good” price.

“I do think—and I think we’re all saying this—that this is a buying opportunity. It doesn’t matter whether it’s right or wrong—excuse me, institutional selling—doesn’t matter whether it’s right or wrong to a fundamental person like we all are. It’s a great opportunity. Now, I will look at the chart of Microsoft and say it looks pretty terrible, but it looked pretty terrible for a long period of time. Folks, I’m not saying that this is the bottom. What I’m saying is Microsoft is a great company—NVIDIA is a great company—you’re getting these stocks now at really good prices. If you just look back from a year from now, you’re going to probably feel these were very good buys.”

Mairs & Power Growth Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q4 2024 investor letter:

“Unlike the dot-com companies that operated at the turn-of-the-century, many of today’s technology companies are established businesses with significant cash flows. We have argued, and continue to argue, that many of these investments are perfectly aligned with our investments process in that they embody durable competitive advantages, above-average growth prospects, and excellent management teams.

A perfect example is Microsoft Corporation (NASDAQ:MSFT), which has grown to become the largest holding in the Growth Fund. Microsoft has a near monopoly on the office software productivity market with its Microsoft Office Suite. The company’s Azure platform is a leader in cloud computing and has been steadily gaining share. Thanks to its Office and Azure products, the company is deeply embedded within many enterprise IT ecosystems. Therefore, it should be well-positioned to expand its presence within its customer base, as it rolls out premium-price AI solutions. The company is not resting on its laurels and plans on spending an astounding $80 billion in 2025 to build out AI data centers.”

Overall, MSFT ranks 3rd on our list of top trending stocks as AI hype fades. While we acknowledge the potential of MSFT, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. 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 the cheapest AI stock.

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