The Best Tech Stock to Hold in Uncertain Times
Key Points
Microsoft's business spans many different industries.
That scale helps the $3.7 trillion company withstand downturns in any one segment.
- 10 stocks we like better than Microsoft ›
Economic outlooks and financial forecasts are never certain, but some periods undoubtedly present more uncertainty than others. Unfortunately, when those times come, the tech sector tends to see the most volatility as the industry carrying the highest expectations for growth and innovation.
Over the past several years, the COVID-19 pandemic, elevated inflation, and geopolitical turmoil are just a few of the things adding uncertainty to the current environment, but all isn't lost for tech stocks. Even as the broad market pulls back on fears of an artificial intelligence bubble, there are tech stocks you can comfortably hold through thick and thin. One such company is Microsoft (NASDAQ: MSFT).
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After 50 years steadily expanding its reach to new markets, one of Microsoft's biggest strengths is the diversity of its business. While many tech companies rely on one or two products or services to keep the lights on (Apple with the iPhone, Alphabet with Google advertising, Nvidia with GPUs, etc.), Microsoft has its hands in many different pots that contribute to the overall success of its business.
During uncertain times, there are usually specific products or services that feel the hit. A faltering economy could cause people to delay upgrading their iPhones, businesses to cut back on advertising, or organizations to slow their investments into AI. When this happens, the companies that rely on those offerings for the bulk of their earnings will be most affected.
Microsoft isn't immune to such downturns, but its business lines span enterprise and consumer software, hardware, cloud computing, gaming, social media, and advertising. Slowdowns in segments such as Microsoft 365 or its cloud computing service, Azure, will undoubtedly impact the business. However, they won't derail it. A stock with that built-in resilience is one you want to have in your portfolio long term.
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Stefon Walters has positions in Apple and Microsoft. The Motley Fool has positions in and recommends Alphabet, Apple, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
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