Rationale Behind FPA Crescent Fund’s Sale of Microsoft (MSFT)

2 days ago 4

Soumya Eswaran

Mon, February 2, 2026 astatine 7:55 AM CST 3 min read

Investment absorption company First Pacific Advisors recently released its fourth-quarter 2025 capitalist missive for “The FPA Crescent Fund”. A transcript of the missive tin beryllium downloaded here. The institution chiefly avoids speculative sectors of the marketplace and adopts a "value-aware" position with an accent connected semipermanent investments. In Q4, the Fund returned 3.09%, bringing the yearly returns to 17.65%. The twelve-month instrumentality was 79.0% of the planetary market, MSCI AWCI, exceeding the mean nett hazard vulnerability of 64.9%. In addition, you tin cheque the Fund's apical 5 holdings to spot its champion picks for 2025.

In its fourth-quarter 2025 capitalist letter, The FPA Crescent Fund highlighted stocks similar Microsoft Corporation (NASDAQ:MSFT). Microsoft Corporation (NASDAQ:MSFT) is simply a multinational bundle institution that develops and supports software, services, devices, and solutions. The one-month instrumentality of Microsoft Corporation (NASDAQ:MSFT) was -9.00%, and its shares gained 4.71% of their worth implicit the past 52 weeks. On January 30, 2026, Microsoft Corporation (NASDAQ:MSFT) banal closed astatine $430.29 per share, with a marketplace capitalization of $3.195 trillion.

The FPA Crescent Fund stated the pursuing regarding Microsoft Corporation (NASDAQ:MSFT) successful its 4th fourth 2025 capitalist letter:

Now, arsenic an illustration of a pugnacious question presently being posed by the market, we taxable Microsoft Corporation (NASDAQ:MSFT) , a institution we really owned from 2010 to 2020. To begin, we clasp absorption successful the highest regards, peculiarly the CEO and CFO, who created tremendous worth for america during our ownership. When we primitively purchased Microsoft backmost successful 2010, the valuation was little than 10x after-tax net aft subtracting the currency connected the equilibrium sheet. The question we had to inquire astatine the clip was whether Microsoft was a melting crystal cube, oregon could the institution present an equity-type complaint of instrumentality adjacent if net ne'er grew again. To our regret, we sold Microsoft excessively early, failing to admit however technological developments, peculiarly those of AI/cloud, would alteration the business.