According to veteran investor Mark Hawtin, Microsoft offers the biggest potential reward for investors looking to invest in a stock over the next five to 10 years. Hawtin, investment director at Zurich-based GAM Investments, said the big tech’s dominant position and critical role in the enterprise software ecosystem makes it ideal to own during a global economic downturn. “It’s without a doubt our favorite mega-cap name,” he told CNBC’s Pro Talks on Wednesday. “If you had to make an investment with a five to 10 year horizon and you weren’t allowed to change your mind, I think Microsoft would be the clearest risk-return player among these large companies over that timeframe.” Hawtin oversees several global longs -Only and long/short fund at GAM, which has around $80 billion in assets under management Invests in disruptive growth and technology stocks MSFT 1Y line In a wide-ranging discussion with CNBC’s Joumanna Bercetche, Hawtin also pointed this out He is not alone in predicting that Microsoft will buck the trend of its peers and report an increase in earnings this year.FactSet data shows that analysts expect earnings per share to increase overall for S&P 500 companies this year 2% compared to Microsoft’s expected 8.5% increase in earnings per share Hawtin says Microsoft will outperform the broader market as it has multiple sources of income. He said the Redmond, Wash.-based company will continue to see revenue growth because it’s an integral part of the technology of many of its customers. For example, millions of companies worldwide use Microsoft Windows, Office 365 and its cloud computing platform Azure as the backbone of their IT infrastructure. These systems either have no equivalent competitor or are difficult to replace immediately. “I think one of the most important things about understanding Microsoft is that they’re so ingrained and embedded in so many companies,” Hawtin said. This unique capability also means, according to Hawtin, that it will leverage advances in artificial intelligence more profitably than other companies that focus exclusively on AI. “So is Teams as a video conferencing opportunity versus Zoom as a standalone business,” he added. Microsoft is bundling its Teams workspace collaboration software with Office 365, driving growth from rivals Zoom and Slack, which belong to Salesforce. Over a span of several decades, the company’s stock has also ranked in the top 10 largest companies in the S&P 500 more times than any other company, according to Hawtin. “There are many companies that have tried unsuccessfully to eliminate Microsoft,” he added.
