The Motley Fool·2025-11-04 02:15Core Insights - Growth stocks with strong fundamentals and pricing power are attractive for long-term investors, especially during inflationary periods [1][2] Microsoft - Microsoft has outperformed the S&P 500, tripling its performance over the last decade, driven by diversified revenue streams and adaptability [3][7] - The Intelligent Cloud segment, particularly Azure, generated nearly 40% of total revenue in fiscal 2025, with Azure showing a 34% year-over-year growth [7] - The Productivity and Business Processes segment, including Microsoft 365 and LinkedIn, accounts for over 20% of revenue, benefiting from high customer integration and switching costs [4][6] - Microsoft reported a fiscal year 2025 revenue increase of 15% to $281.7 billion and net income up 16% to $101.8 billion [7] - The company has a strong balance sheet, allowing for significant investments in AI and cloud infrastructure while maintaining a history of dividend increases [8][9] Mastercard - Mastercard has generated over 500% total return over the last decade, significantly outperforming the S&P 500 [10] - The company earns fees based on transaction volume, benefiting from inflation without needing to raise rates, leading to high operating leverage [11] - Mastercard operates in a global duopoly with Visa, creating a powerful network effect that enhances its competitive advantage [12] - In Q2 2025, Mastercard reported net revenues of $8.1 billion, up 17%, with adjusted EPS of $4.15, reflecting strong growth in value-added services [15]