We recently published a list of Top 10 Stocks to Watch as Investors Brace for Potential Recession. In this article, we are going to take a look at where Microsoft Corporation (NASDAQ:MSFT) stands against other top stocks to watch as investors brace for potential recession.
President Donald Trump’s new reciprocal tariff announcement is hammering stock markets around the world as countries face a new reality and trade dynamics. The rising volatility has increased recession risks. Goldman Sachs recently said that it sees a 35% chance of a recession in the next 12 months, up from 20% previously. The bank also cut its 2025 GDP forecast to just 1% and raised its year-end unemployment rate outlook by 0.3 percentage points to 4.5%.
China and key European countries are beginning to respond to the latest tariffs and will likely impose retaliatory tariffs on US products, causing a further downturn in consumer sentiment. Kara Reynolds, an economist at American University, told ABC News that a pullback in spending from consumers and businesses due to these uncertainties can tip the US into a recession.
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 currently on Wall Street’s radar. With each stock, 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).
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Number of Hedge Fund Investors: 279
Scotiabank recently started covering Microsoft Corporation (NASDAQ:MSFT) with a Sector Outperform rating and highlighted the company’s strong position in the race to develop artificial intelligence.
“Based on our fieldwork, 2025 will be a paradigm-shifting year during which customer investments accelerate in AI on Azure and Microsoft 365 Copilot,” said Scotia Capital analysts, led by Patrick Colville, in a detailed note to investors.
Scotiabank set a $470 price target on the stock, saying about 60% of companies are using foundational models in the public cloud. Azure, they said, is well-positioned to capture spending on generative AI.
“Almost all IT decision makers plan to add additional use cases in 2025,” Colville said. “Microsoft’s partnership with OpenAI, Inc. and pre-existing customer relationships are the key advantage for Azure in AI. Based on our fieldwork, a slow moderation in growth in Microsoft’s traditional public cloud business is the most likely outcome – important for assuaging investor fears that one revenue source is being substituted for another.”
