The Best Mega Cap To Own In The Next Ten Years According To Investors

Investors who are looking to invest in a stock that will provide a positive return over the next five to ten years should look into Microsoft, according to veteran investor Mark Hawtin.

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According to Michael Hawtin, investment director at Zurich-based GAM Investments, it is the company's dominant position and critical role in the enterprise software ecosystem that makes it a good choice to own through a downturn in the global economy.

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On Wednesday, he told Trade Algo that it was without a doubt the most important mega-cap name for him. “I would say that Microsoft, for me, would be the clearest risk-reward player amongst those big companies over the next five to ten years if you had to make an investment with a five-to-ten-year view, and you were not allowed to change your mind at any time.”

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In his role as Chief Investment Officer at GAM, Hawtin oversees several global long-only funds as well as long/short funds, which have an asset base of over $80 billion. There are a number of disruptive growth and technology stocks that he invests in.

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Hawtin also stated that Microsoft would report higher earnings this year, bucking the trend among its peers.

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This isn't the only view he holds. S&P 500 companies are expected to increase earnings per share by 2% in aggregate this year, compared to Microsoft's 8.5% increase.

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Microsoft, according to Hawtin, is likely to outperform the rest of the market because it has a diverse revenue stream. As an integral part of the technology of many of its customers, the Redmond, Washington-based company will continue to see growth in sales in the near future.

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Microsoft Windows, Office 365, as well as its cloud computing platform Azure, provide the backbone of many businesses' IT infrastructures around the world, including Microsoft Windows, Office 365, and Azure. There either isn't a comparable system on the market or it is very difficult to replace these systems right away.

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“The most important thing about understanding Microsoft is the fact that they are so ingrained and embedded in so many different types of businesses,” Hawtin explained.

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“A company with this unique ability will also be able to capitalize on advancements in artificial intelligence more profitably than other companies that focus exclusively on artificial intelligence,” said Hawtin. “I believe Zoom provides the same type of video conferencing opportunity as Teams, but in a more integrated way than Zoom provides as a stand-alone business," he concluded.

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As Microsoft bundles its workplace collaboration software Teams with Office 365, it is outperforming rivals Zoom and Slack, both owned by Salesforce, in terms of growth.

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In addition to having been among the top 10 largest companies in the S&P 500 on numerous occasions over a multidecade period, the company's stock has also been among the top 10 largest companies on numerous occasions over the past several decades.

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“Many companies have attempted to eliminate Microsoft without success,” he said.

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