Gabelli opens 1.2% Microsoft position near 52-week lows

Gabelli's move is a bet against sentiment rather than a bet on perfect conditions. The fund's own letter flags concerns about Microsoft's exposure to OpenAI and to software, yet it describes the shares as very cheap relative to historical measures, with a leading cloud business. That combination explains the position size: at 1.2% of the portfolio, it is a toehold rather than a conviction stake.

The purchase came in a quarter when the fund's defensive positioning worked against it. Semiconductor and industrial shares led a sharp market rebound, and the fund's limited exposure to the biggest AI hardware winners held Class I shares to a 5.35% gain, behind the 9.99% return of the Lipper Large Cap Value Fund Average. The same gap shows in the one-year numbers, 18.68% versus 22.52%. Buying Microsoft near its lows looks like an attempt to add quality exposure where the selloff seemed overdone.

Whether that read pays off hinges on two things the fund itself leaves open: whether Microsoft's software and OpenAI ties prove less damaging than feared, and whether the market keeps rewarding the AI infrastructure names the fund has largely avoided. Its managers expect the earnings picture to help, noting that 2026 S&P 500 earnings growth expectations have risen to 25% from 15%. They also list inflation, interest rates, geopolitics, and the sustainability of elevated AI spending as uncertainties, which suggests the position is sized to be tested before it is celebrated.