Microsoft is recommended stock during Nasdaq correction

The Nasdaq Composite index is currently in correction territory, meaning it has fallen 10% or more from its highest point. While some worry this could lead to a longer bear market, many corrections resolve quickly, making them good opportunities for long-term investors. In this situation, high-quality stocks from the "Magnificent Seven" list are seen as wise investments. Among the Magnificent Seven, Microsoft stands out as a safe and promising choice right now. Microsoft is a major player in technology and is competing in the fast-developing field of artificial intelligence (AI). With a strong balance sheet, including $71.6 billion in cash and a AAA credit rating, Microsoft appears well-positioned for the future. Despite some recent struggles, Microsoft's business fundamentals remain strong. In the last quarter, the company reported a 12% revenue growth. However, its stock has underperformed compared to its peers, possibly due to market fluctuations rather than any significant problems within the company. Shares are currently trading at a lower valuation, which could indicate a rebound is on the horizon. Another factor is Microsoft's recent price increase for its Microsoft 365 subscription. The price rose 43%, marking the first increase in 12 years. While this increase mostly affects consumer subscriptions, it might lead to larger price hikes for commercial products in the future, which could boost revenue significantly. Additionally, Microsoft has the chance to reduce costs in AI. The company spent a large amount on AI chips but is now working on its own custom AI chips. This shift could lead to substantial savings in the near future, helping to improve profit margins. Overall, considering its recent stock performance, lower valuation, planned price hikes, and cost-saving measures, Microsoft is viewed as a strong investment choice for those looking to build a long-term portfolio.