These Funds Have the Largest Stakes In Microsoft

Key Takeaways

• Microsoft is down 26% since its October 2025 peak, due to fears that AI will reduce demand for software.
• The Principal Blue Chip Fund has the largest weighting to the stock with a 15.6% allocation.
• All 10 of the largest holders of Microsoft are down over the past three months.

Fears that artificial intelligence will undermine the software industry have sent shares of Microsoft MSFT sharply lower in recent months, and the funds with the biggest bets on the stock have been feeling the squeeze.

The fund with the largest allocation to Microsoft is the $8.8 billion Principal Blue Chip Fund PGBHX, which has 15.6% of its assets in the stock. The fund with the second-largest position is the $6.9 billion Nomura Large Cap Growth Fund ILGRX, which has 13.9% of its portfolio in the stock.

Shares of the $3 trillion company have followed the rest of the software industry down in the past few months. “It’s just fear, fear, fear. And there’s a lot of uncertainty, and there’s no way to prove that it’s not happening,” Morningstar senior analyst Dan Romanoff said in January.

Which Funds Have the Biggest Allocations to Microsoft?

A screen of US stock funds, excluding sector funds and those with fewer than $100 million in assets, shows which funds have made the biggest bets on Microsoft. This data reflects the most recently reported positions, and funds may have since reduced, eliminated, or added Microsoft. For instances in which more than one fund followed the same strategy, only the fund with the lowest expense ratio is listed.

All 10 of the funds with the largest weightings to Microsoft fell into the large-cap growth category. The benchmark for the category, the Morningstar US Large-Mid Broad Growth Index, has a 5.0% weighting to Microsoft as of Jan. 31, 2026, while the 10 largest holders of the stock have weightings ranging from 12.4% to 15.6%. In addition, all 10 funds were actively managed.

All 10 are also down over the past three months, compared with a 2.1% gain for the broader market, as represented by the Morningstar US Market Index.

The fund most heavily invested in Microsoft is Principal Blue Chip Fund, which carries a

. Microsoft is the fund’s largest holding by 3.7 percentage points. Microsoft’s plunging price accounted for 4.0 percentage points of the fund’s 11.1% drop since the stock peaked on Oct. 28, 2025.

“Satya Nadella and Amy Hood (CEO and CFO respectively) ensure Microsoft is focused on large and growing opportunities,” wrote the fund’s management in their December 2025 quarterly commentary. They wrote that while the stock had been among the top five detractors to the fund’s performance that quarter, Microsoft “has many opportunities ahead.”

Morningstar associate director Tony Thomas wrote that “Nolin tends to tread carefully in tech stocks,” noting that it hasn’t invested in Apple AAPL and Tesla TSLA.

Microsoft is the second-largest holding in the Neutral-rated Nomura Large Cap Growth fund, after Nvidia NVDA. The stock accounted for 3.7 points of the fund’s 11.3% loss since Microsoft peaked. The fund’s strategy focuses on firms with major competitive advantages, according to analysis by Morningstar principal Robby Greengold. Microsoft fits the bill according to Morningstar equity analysts, who give it a wide moat rating.

The fund with the third-largest position in Microsoft is Silver-rated $10.1 billion MFS Massachusetts Investors Growth Stock Fund MIGNX, which has a 13.8% weighting to the stock, making it the largest holding. The stock accounted for 3.6 percentage points of the fund’s 5.2% loss since Microsoft peaked. The fund’s large position in Microsoft stands in contrast to its broader portfolio, which has been less concentrated than its chosen benchmark. “The 10 largest stocks in the index accounted for nearly 62% of the Russell 1000 Growth Index as of August 2025,” wrote Jack Shannon in his analysis of the fund in October 2025. “This strategy placed just 35% in those same 10 companies and owned only five of them.”

While some investors appear to be worried about AI’s impact on Microsoft’s software business, the managers of the Neutral-rated $4.1 billion Alger Spectra Fund ASPYX see AI as a long-term positive. The fund has a 12.4% weighting to the stock. “Microsoft is infusing AI across all of their applications,” said portfolio manager Patrick Kelly said on a May 2024 episode of the Alger Podcast. “They are embedding AI across their entire product line, and this is not only leading to an acceleration in their topline growth, but also significantly enhancing their competitive position and their competitive moat.”