Hightower’s Stephanie Link says market is failing to appreciate Microsoft’s AI value
As concerns around elevated valuations persist, Hightower Advisors’ Stephanie Link is finding investment opportunities in underappreciated technology stocks such as Microsoft and Palo Alto Networks . Link, who recently said that investors are navigating the second inning of the artificial intelligence trade, appeared on CNBC’s “Halftime Report” on Wednesday to give her takes on some of the biggest tech names. The chief investment strategist and portfolio manager highlighted one Big Tech name that is underperforming the broader market this year despite its scale, strong bookings and margin growth. She’s also watching winners and losers in the hot cybersecurity industry. Here are the names Link is watching: Microsoft Microsoft shares are up more than 14% this year, but the stock has lost roughly 11% since it reported fiscal first-quarter results in late October and warned capital expenditures would accelerate this fiscal year. The stock, which is considered a proxy for interest in OpenAI’s ChatGPT model, has also been hit by concerns about Google’s success with its Gemini 3 AI model. And it was dealt another blow Wednesday after The Information said the company’s AI products were missing growth goals . Microsoft has pushed back on the report, saying it hasn’t lowered sales quotas. The market isn’t appreciating some of Microsoft’s growth opportunities, according to Link, who recently opened a position in the tech giant. The disappointment over the latest earnings report “is ridiculous for a company of this size,” Link said, noting how its operating margins have expanded. “I know it’s a crowded name, but I just think that that’s the opportunity,” she said. “I care more about the ecosystem at large at this company, and they are participating in the fast growth of AI and I don’t think it’s really appreciated. The multiple has contracted five multiple points from its average.” Snowflake Link continues to favor Snowflake , which has soared more than 73% this year on optimism that the cloud data storage company is benefiting from the AI race. “This is one name that I think is a very big beneficiary from all of the data that has been created and needs to be cleaned for the companies in data centers and in AI to work,” Link said. She said she prefers Snowflake to other software names such as Salesforce and Adobe, which “are expensive for the growth that you’re getting.” However, the company has set a high bar for itself. In late October, the company reaffirmed its third-quarter and fiscal 2026 guidance . Link said she suspects Snowflake will need to beat revenue growth estimates and improve margins to drive the stock further given its recent run-up. “I think of you have the top line and you got the margins, you’re gonna get the operating leverage on the bottom line.” Palo Alto Networks Link recommended investors own Palo Alto Networks for a leg up in the cybersecurity industry. She prefers it to CrowdStrike, which she said is bigger but more expensive. “The one I have been buying and I recommend to buy here is Palo Alto, because that stock is only up 3% year to date,” Link said. According to Link, the stock’s performance has been hurt by recent acquisitions it’s made. “I think people are nervous about the integration risk,” she said. “If there’s any management that can get this thing done, it’s this management team.” Palo Alto announced in July that it will take over Israeli identity security provider CyberArk in a deal worth about $25 billion . Then, in mid-November it said it would acquire observability platform Chronosphere for $3.35 billion. These deals followed plans in April to buy Protect AI for between $650 million and $700 million as part of its strategy to push into securing AI and machine learning applications and models. The acquisitions are “positive for the long term,” Link said.
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