The “Magnificent Seven” includes some of the most powerful and profitable tech companies in the world. These companies have a strong track record of delivering big returns to investors, which is why they’ve earned the title “magnificent.”
In the latest Form 13F filings, two well-known billionaire fund managers were spotted buying more shares of Microsoft (NASDAQ: MSFT) and Amazon (NASDAQ: AMZN) in the first quarter. Let’s take a closer look at why these two tech giants are catching their attention for 2025.
1. Microsoft
Microsoft is one of the most popular stocks among big investors. Billionaires Stephen Mandel (Lone Pine Capital) and Chase Coleman (Tiger Global) have held large stakes in the company for years—and they added even more shares recently.
Why? A big reason is Microsoft’s booming cloud business. In Q1, revenue from Microsoft Azure grew 33% compared to the same time last year—an even faster pace than the previous quarter. As CFO Amy Hood explained, the demand for Microsoft’s cloud and AI services is still strong because they help businesses work more efficiently and grow.
Azure is a major player in the cloud space, and it’s only getting stronger. Microsoft is expanding its data centers around the world, which helps it offer better service to companies using popular software like Oracle and SAP.
Microsoft’s success with Windows and Office has made it one of the most profitable companies globally. Now, its cloud business is driving future growth. In just five years, Microsoft has doubled both its revenue and earnings per share—helping its stock climb higher.
Still, there’s one challenge: building all those data centers is expensive. That’s been putting pressure on Microsoft’s profit margins. But in the last quarter, the company managed to grow earnings by 18% year over year—an encouraging sign.
Back in Q1, when those fund managers were likely buying, the stock was trading at 26 times expected earnings. Now, it’s around 34 times, which is on the higher end of its usual range. So, it might be smart to wait for a better price—but if Microsoft keeps posting strong results, the stock could keep rising.
Also Read: Which Tech Stocks Have the Highest Growth Potential?
2. Amazon
Mandel and Coleman also boosted their investments in Amazon—another big name in both e-commerce and cloud services.
Amazon Web Services (AWS), the company’s cloud division, grew revenue by 17% year over year in Q1. It now brings in $112 billion annually, making up nearly a fifth of Amazon’s total business.
AI is also playing a big role in AWS’s growth. Demand for AI-related services is skyrocketing, and Amazon is staying ahead by offering its own AI chips like Trainium3 to help companies cut costs. It also provides tools like Amazon Bedrock to help businesses build AI applications more easily.
But the biggest reason billionaires are betting on Amazon? Its profits are rising fast. In Q1, earnings per share jumped 62% from the previous year—largely thanks to cost-cutting moves, like using more robots in warehouses to improve efficiency.
Amazon also has a powerful edge: over 200 million Prime members, a huge delivery network, and a massive data center infrastructure that supports its growing cloud business. While Azure is growing slightly faster than AWS, the overall cloud market is expanding around 20% per year—there’s plenty of room for both to thrive, especially with AI demand heating up.
Also Read: What’s the Difference Between Technical and Fundamental Analysis?
Right now, Amazon’s stock is trading at about 19 times its operating cash flow, which is fairly low compared to its history. Unless there’s a major market downturn, Amazon looks well-positioned to deliver strong returns in 2025 and beyond.