10 Best S&P 500 Stocks to Buy According to Hedge Funds

3) Apple Inc. (NASDAQ:AAPL)

Number of Hedge Fund Holdings: 184

Apple Inc. (NASDAQ:AAPL) is engaged in designing, manufacturing, and marketing smartphones, personal computers, tablets, wearables, and accessories.

Apple Inc. (NASDAQ:AAPL) has been maintaining a strong position in the premium smartphone market, which should continue to drive topline and bottom-line growth.  Its ability to differentiate products with the help of hardware innovations and software ecosystem enhancements should be able to help it maintain market share and pricing power. Wall Street analysts believe that its services segment should continue to achieve strong growth, aided by improved margins.

As this high-margin business expands, it can aid Apple Inc. (NASDAQ:AAPL)’s profitability and justify premium valuation. The strong potential for new service offerings and elevated monetization of the existing user base should offer additional upside to revenue and earnings projections. Moving forward, Apple Inc. (NASDAQ:AAPL)’s growth trajectory is expected to be aided by a strong ecosystem of products and services and a loyal customer base.

During Q3 2024, the company’s business performance was able to generate EPS growth of 11% and ~$29 billion in operating cash flow, enabling it to return more than $32 billion to shareholders. Analysts at Melius Research restated a “Buy” rating on the shares of Apple Inc. (NASDAQ:AAPL), setting a $265.00 target price on 27^th August.

Wedgewood Partners, an investment management company, released a Q3 2024 investor letter. Here is what the fund said:

“Apple Inc. (NASDAQ:AAPL) also contributed to performance as investors continued to favorably discount the recent unveiling of its AI strategy. As we have noted in the past, the Company has been at the forefront of proprietary semiconductor computer processor development for well over a decade. Given the compute-intensive nature of AI applications, Apple is well situated to develop a suite of compelling, consumer-friendly AI services that are also cost-effective. Apple’s AI value proposition should compel consumers to continue growing their engagement in the Apple ecosystem over the next several years.”