Matrix Asset Management Increased Its Holdings in Microsoft Corporation (MSFT)

Soumya Eswaran

Mon, May 18, 2026 at 11:03 AM EDT 3 min read

Matrix Asset Advisors, an asset management company, released its Q1 2026 investor letter. A copy of the letter can be downloaded here. In the first quarter of 2026, the stock market declined by -4.33% after three years of gains, initially lifted by strong earnings and expectations of interest rate cuts. However, following military actions in Iran on February 28, rising oil prices, higher interest rates, and heightened economic uncertainty lowered stock prices. Technology, Consumer Discretionary, and Financials were the sectors with the lowest quarterly performance. The top-performing sectors were consumer staples, utilities, and energy. Despite these challenges, Matrix’s portfolios performed relatively well, with the Dividend Income portfolio achieving a small positive return and the LCV portfolio outpacing the S&P 500®. The firm continued its cautious optimism for 2026 and believes the current volatile environment presents significant investment opportunities. In addition, please check the Fund’s top five holdings to know its best picks in 2026.

In its first-quarter 2026 investor letter, Matrix Asset Advisors highlighted stocks like Microsoft Corporation (NASDAQ:MSFT). Microsoft Corporation (NASDAQ:MSFT) is a multinational software company that develops and supports software, services, devices, and solutions, holding dominant positions in software, cloud infrastructure, generative AI, and gaming. On May 15, 2026, Microsoft Corporation (NASDAQ:MSFT) stock closed at $421.92 per share. One-month return of Microsoft Corporation (NASDAQ:MSFT) was 0.11%, and its shares lost 8.80% over the past 52 weeks. Microsoft Corporation (NASDAQ:MSFT) has a market capitalization of $3.11 trillion.

Matrix Asset Advisors stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q1 2026 investor letter:

"We think the market’s decline this year provided some very good investment opportunities. While the overall market was down less than 5% in the quarter, many individual stocks had much bigger pullbacks. Of note was the decline in the software technology area, where fears of AI disrupting software business models led to an across-the-board selloff in the sector, including Microsoft Corporation (NASDAQ:MSFT) (down 24% in the quarter), which we believe will continue to show good growth as more businesses adopt AI. We view the decline in Microsoft’s stock as an excellent buying opportunity."

Microsoft Corporation (NASDAQ:MSFT) ranks second on our list of 40 Most Popular Stocks Among Hedge Funds. According to our database, 312 hedge fund portfolios held Microsoft Corporation (NASDAQ:MSFT) at the end of the fourth quarter, the same as in the previous quarter. While we acknowledge the potential of Microsoft Corporation (NASDAQ:MSFT) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.