MSFT: This tech giant is set to grow even stronger

It's been a brutal year for investors. The S&P 500$S&P 500(.SPX)$ -- an index of the 500 largest companies in the U.S. that's widely viewed as a measure of the overall performance of the stock market -- plunged 20% from the end of 2021 to the end of June. It's the worst downturn since the S&P 500 fell 21% in the first six months of 1970.

Yet amid the carnage lies opportunity -- if you know where to look. Interestingly, the S&P 500 recovered its losses and surged 26.5% in the second half of 1970. In fact, the market hasreboundedfrom every major downswing to eventually rise to new all-time highs. It's highly likely it will do so again.

This is the outstanding businesses that could lead the stock market's recovery. Buying its stock today can position you to profit handsomely from an eventual rally.

Financial fortitude is paramount during difficult economic times. Bountiful cash reserves and strongfree cash flowproduction allow companies to survive recessions and other calamities. The strongest businesses often emerge stronger from these challenges, as they're able to invest straight through market downturns to expand their operations, even as many of their lesser rivals are forced to cut back on their growth-related spending.

Microsoft$Microsoft(MSFT)$ excels in this regard. The software titan generated more than $63 billion in free cash flow over the past year. It also has over $100 billion in cash reserves on its fortress-like balance sheet.

That's allowed Microsoft to invest aggressively in high-growth areas such as cloud computing and artificial intelligence (AI). The tech colossus also made a $68.7 billion bid in January to acquire video game publisherActivision Blizzard$Activision Blizzard(ATVI)$  to expand its leading gaming operations. These investments should help to fuel Microsoft's expansion -- and allow the tech leader to reward its investors with solid, long-term gains.

Moreover, you currently have the opportunity to buy Microsoft's shares at an over 25% discount from their highs in late 2021.