MSFT has strong fundamentals and dividend growth, but is rated second to NVDA because its PEG ratio is higher.

However, I would say that if there is any stock that can challenge Nvidia, it may very well be this next stock in the third purchase, the software and cloud giant, Microsoft (ticker: MSFT), into which BlackRock poured more than an additional $5.2 billion last quarter, making it one of its largest investments ever, which is something I am personally pleased to see, because, as you know, Microsoft, along with Nvidia, is also one of my largest investments.

Now, just like Nvidia, if you look at Microsoft from the perspective of traditional dividend filters, you might ignore it, as the high share price has kept the dividend yield at current prices slightly below 1%, which is a bit disappointing.

if you look at Microsoft from the perspective of traditional dividend filters, you might ignore it, as the high share price has kept the dividend yield at current prices slightly below 1 %, which is a bit disappointing .

However, one thing most investors don't realize about Microsoft is that it is quietly one of the world's largest payers of cash dividends in terms of raw cash value. In fact, when you look at the total cash back, Microsoft pays out tens of billions of dollars in dividends each year.

This amount exceeds what almost every other company in the entire S&P 500 index pays. I think it might actually be the biggest ever.

In fact, when you look at the total cash back, Microsoft pays out tens of billions of dollars in dividends each year. This amount exceeds what almost every other company in the entire S&P 500 index pays. I think it might actually be the biggest ever .

Well, the reason for that is that Microsoft's growth profile is among the most elite. Because they generate a lot of cash from Windows, Office, Azure, and all the new AI offerings they now have and are rolling out.

They generate so much of it that they only need to use about one-fifth of their profits to cover those huge payments. With mountains of capital left to be pumped directly into AI data centers, and even to buy back billions of their own shares as well.

But thanks to all of that, they were able to increase their payouts at a double-digit rate while doing so consistently for more than two consecutive decades. Now, I'm just going to look back a decade, not two decades, just one decade, when the stock was trading at around $55 a share.

Well, if you look at today's dividends, they're about $3.92. Yes, you will end up with a dividend yield of over 7%.

So, the person who bought Microsoft shares 10 years ago, which is not a strange thing to think about, Microsoft was already a very strong stock to invest in. Anyone who bought it at that time, and I certainly would have bought it too.

I've been buying them ever since, and I've been buying them for a long time.

However, anyone who has a cost basis from 10 years ago is getting a dividend yield of at least 7% on those investments. So, once again, the power of investing in dividend growth is truly amazing.

Now, if we look at the company here, these distributions are from Microsoft. Again, it will grow to become much bigger in the future. This is very clear just by looking at the metrics.

The reason is that this is a company that generates hundreds of billions of dollars in sales and profits every

Honestly, I would have put Microsoft at the top of our list if it weren't for the huge difference in rating compared to Nvidia. Not long ago , Microsoft stock was trading at a much lower price , and I was shouting in your faces, "Guys, I'm buying a lot of this stock."

" He has a great rating ." I was receiving comments that were not supportive of me. Some people were definitely with me , but others were saying, "No, Microsoft will continue to decline."

All this talk. Well, Microsoft has definitely recovered.

Because of that now, yes, the rating isn't as attractive as it used to be, but you know, Nvidia is much cheaper. Microsoft is still very good if you look at it on a GAAP basis, and even slightly cheaper in terms of price-to-earnings ratio, but when looking specifically at the price-to- earnings-to- growth (PEG) ratio, Nvidia is much cheaper according to this metric.

Since this video is more growth-oriented, I think Nvidia has a slight edge over Microsoft in this aspect. Therefore, we will elevate Nvidia to the top spot . Therefore, we will place Microsoft directly below it in second place.

Now, I like Lily a lot and would give it preference over KLA, but I can't rank it on the same level as companies like Nvidia, Microsoft, or Broadcom, which I trust a little more and which are in my portfolio.