In a recent conversation on December 3, Clare Pleydell-Bouverie from Liontrust Asset Management appeared on CNBC and shared insights on the current state of innovation, particularly in Silicon Valley. She emphasized that the pace of innovation is not only continuing but is accelerating. This rapid evolution necessitates frequent visits to the region to discern which companies are successfully navigating this transition and which are not. Pleydell-Bouverie noted that the clarity regarding these companies is improving quarter by quarter. She expressed a firm belief that the beneficiaries of the new technology cycle, which began about 18 months to 2 years ago with the advent of ChatGPT and the AI Revolution, will differ significantly from those in the previous technology cycle. While established names remain relevant, her focus is increasingly on opportunities beyond the MAG7.
The discussion also touched on market trends for 2025, highlighting a significant focus on AI infrastructure. Pleydell-Bouverie indicated that this year has seen a concentrated effort on building out the necessary compute infrastructure before monetization can occur. This infrastructure encompasses not only silicon but also semiconductor equipment and networking components, which are essential for scaling AI capabilities. She pointed out that while model providers are often viewed as commoditized, there is an ongoing arms race to develop large foundation models. Engineering tools that facilitate the integration of AI into businesses and various applications are also critical, although currently, most value resides within the AI infrastructure layer.
Looking ahead, Pleydell-Bouverie anticipates a shift in focus toward application layers where substantial disruption is expected. Numerous AI startups are targeting established players like Salesforce, indicating a competitive landscape. Despite this shift, she believes that the importance of NVIDIA in AI infrastructure remains strong. She described its role as pivotal, suggesting that it is positioning itself to become the operating system for an emerging landscape of AI-infused software set to launch in the coming year. Pleydell-Bouverie cautioned against viewing the company merely as a chip provider; instead, she argued that understanding its strategic positioning within this technological paradigm shift is crucial for investors.
Her insights reflect a broader narrative about Silicon Valley’s ongoing transformation and its implications for investors looking to navigate this rapidly evolving technological landscape effectively. As tech stocks become increasingly popular, we’re here with a list of the 10 best tech stocks for long-term investment.
Methodology
We first sifted through the stock screeners and internet lists to compile a list of the top mega-cap tech stocks. We then selected the 10 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q3 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Tech Stocks For Long Term Investment
10. Salesforce Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 116
Salesforce Inc. (NYSE:CRM) is a leading cloud-based software company that provides a top-tier AI-powered CRM (Customer Relationship Management) platform utilized by 150,000+ businesses globally. Its integrated suite of products connects every team by uniquely combining human expertise with autonomous agents to drive customer success.
Recently, the company’s focus has shifted towards the development of digital labor. It has emerged as a leading provider of digital labor solutions, powered by autonomous AI agents. AgentForce, a key component of this strategy, has shown early success. Since its recent launch, it has secured over 200 deals and has a robust pipeline for future growth. This technology enables businesses to enhance productivity by augmenting human capabilities with AI agents.
Salesforce Inc. (NYSE:CRM) has demonstrated the effectiveness of AgentForce within its own operations. By integrating AgentForce into its customer support platform, help.salesforce.com, the company has improved efficiency and accuracy in handling customer inquiries. AgentForce utilizes Salesforce Inc.’s (NYSE:CRM) extensive data resources, including 200-300 petabytes of customer data, to provide accurate and personalized responses, distinguishing it from competitors like Microsoft Copilot.
The upcoming launch of AgentForce 2.0 on December 17 in San Francisco will showcase significant technological advancements. This event will provide an opportunity to learn more about the future of digital labor and how Salesforce Inc. (NYSE:CRM) is leading the way in this transformative field.
9. Adobe Inc. (NASDAQ:ADBE)
Number of Hedge Fund Holders: 123
Adobe Inc. (NASDAQ:ADBE) is a global software company that provides a comprehensive set of creative, marketing, and document management solutions. Its flagship products, including Photoshop, Illustrator, InDesign, Acrobat, and Premiere Pro, are industry-standard tools used by millions of professionals worldwide.
One of its products, Adobe Experience Platform (AEP) is a suite of customer experience management solutions that allows organizations to centralize and standardize customer data, with the help of data science and machine learning. As December began, Adobe and Amazon Web Services (AWS) expanded their partnership to make AEP available on the AWS cloud. With AEP on AWS, marketers can enhance personalization through Adobe Real-Time CDP by gaining a unified, real-time view of customer interactions across all channels. This enables the creation of highly targeted audiences and the delivery of personalized experiences that resonate deeply with individual preferences.
Furthermore, Adobe Journey Optimizer helps marketers create smooth customer experiences everywhere customers interact with the brand. By leveraging fully managed AWS native services, marketers can streamline data management, reduce operational overhead, and accelerate workflows. This collaboration reinforces Adobe Inc.’s (NASDAQ:ADBE) position as a leader in customer experience management.
8. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 128
Broadcom Inc. (NASDAQ:AVGO) is a semiconductor and infrastructure software company. While it’s known for its ASICs (Application-Specific Integrated Circuits), it provides a range of products like cable modems, networking processors, and storage adapters. It serves key markets including data centers, networking, software, broadband, storage, and wireless.
This year, the company launched cutting-edge AI technologies, including the VeloRAIN, an AI-powered security platform, and a private cloud platform for enhanced AI autonomy and security. Driven by strong demand for ethernet networking and custom AI accelerators, the company expects AI revenue to reach $3.5 billion in Q4 2024, contributing to a projected full-year AI revenue of $12 billion.
The company recently announced an advancement in its custom chip technology. Recognizing the surge in demand for GenAI, it has developed 3.5D XDSiP, a solution designed to enhance the speed and performance of custom AI processors. This technological leap is crucial for Broadcom Inc.’s (NASDAQ:AVGO) growing customer base of hyperscalers, who are increasingly relying on custom chips to diversify their supply chains and reduce dependence on expensive NVIDIA processors.
Its focus on developing groundbreaking technologies serves as a key competitive advantage. Broadcom Inc. (NASDAQ:AVGO) is now achieving greater stability and is well-positioned to become a dominant force in the technology landscape.
ClearBridge Investments’ ClearBridge Large Cap Value Strategy stated the following regarding Broadcom Inc. (NASDAQ:AVGO) in its Q3 2024 investor letter:
“In IT, we bought Broadcom Inc. (NASDAQ:AVGO) as we believe the company has a long runway for growth with its custom silicon business, which should be more durable and less volatile than other components within the AI food chain. We also believe the acquisition of VMware creates another opportunity for steady, subscription-based durable growth that is still in its early innings. We believe the stock has an attractive risk/reward profile given the reasonable visibility toward mid-teens EPS growth at a low-20s P/E multiple. We made room for Broadcom by exiting Lam Research, whose shares we believed priced in a full recovery, while we grew increasingly concerned that China exposure might create an air pocket.”
7. Taiwan Semiconductor (NYSE:TSM)
Number of Hedge Fund Holders: 158
Taiwan Semiconductor (NYSE:TSM) is a leading global chipmaker that produces advanced chips for major tech companies. The strong demand for high-performance computing, AI, and 5G technology is driving its growth. Its cutting-edge technology, particularly in 3nm, 5nm, and 7nm chip production, gives it a strong competitive edge.
The company is expected to dominate the semiconductor industry with its 2nm chip technology as well. This creates a significant barrier to entry for competitors, effectively securing its near-monopoly in high-demand chips. The upcoming 2nm (N2) chips, featuring gate-all-around (GAA) transistor architecture, represent a leap forward. GAA transistors offer superior power efficiency and performance compared to the current FinFET technology, crucial for meeting the demands of high-performance computing. N2 promises a 10-15% performance boost at the same power level and a 25-30% reduction in power consumption compared to the previous generation (N3E). Furthermore, N2 will enable a 15% increase in transistor density, allowing for more powerful chips in smaller packages.
This advancement is expected to drive innovation across various sectors, including AI, mobile devices, and data centers, reshaping the landscape of computing technology. Taiwan Semiconductor (NYSE:TSM) is also expanding its manufacturing capacity through significant investments in new fabrication plants, further solidifying the company’s market position.
Baron Global Advantage Fund stated the following regarding Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its Q3 2024 investor letter:
“We established a small position in Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM). Morris Chang founded TSMC in 1987, as the world’s first dedicated semiconductor foundry. Until then, semiconductor chips were always designed and manufactured by the same company. TSMC introduced a groundbreaking new business model, in which it acted purely as a contract manufacturer, which proved to be highly successful. TSMC maintained a focus on improving its manufacturing process technology and enabled the emergence of innovative fabless design companies, including NVIDIA, Apple, and Qualcomm, who became TSMC’s key customers. Today, TSMC has a more than 60% share of the total semiconductor foundry market and over 90% share in leading-edge manufacturing. TSMC enjoys high barriers to entry given the ever-increasing cost and technological complexity of semiconductor manufacturing while benefiting from economies of scope as once leading-edge manufacturing becomes lagging edge on fully depreciated equipment. TSMC also benefits from scale– higher profits lead to higher R&D and capex investments, allowing for further technological differentiation, resulting in more profits. We believe TSMC will sustain strong double-digit earnings growth for years to come, driven by continued market share gains, strong pricing power, and structural growth in AI demand. According to C.C. Wei, TSMC’s CEO, “almost all the AI innovators are working with TSMC to address the insatiable AI-related demand.”6 Management forecasts that revenue from server AI chips, such as GPUs and other AI accelerators, will grow at a 50% CAGR from 2022 to 2028 and account for more than 20% of TSMC’s revenue by 2028. We except further long-term upside from the eventual proliferation of edge AI devices, including AI smartphones and AI PCs, which will require significantly more computing power and drive even stronger demand for TSMC’s leading-edge technology.”
6. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 158
Apple Inc. (NASDAQ:AAPL) is a leading technology company known for its cutting-edge products. Its most popular products include the iPhone, iPad, Mac computers, Apple Watches, and AirPods. Its dedication to user experience has cultivated a loyal customer base, and its subscription services, including Apple Music and Apple TV+, are experiencing significant growth.
It has made strides in the AI sector with the introduction of Apple Intelligence, a system designed to enhance user experience across its devices. Launched in June, Apple Intelligence aims to deliver personalized AI experiences through generative models that integrate seamlessly into iOS 18, iPadOS 18, and macOS Sequoia.
The company’s collaboration with Amazon Web Services (AWS) marks a pivotal move in its AI strategy. In December, Apple Inc. (NASDAQ:AAPL) reported that it is currently using AWS’ custom AI chips for services like search. By utilizing AWS’ Trainium 2 chips for pre-training its models, Apple Inc. (NASDAQ:AAPL) enhances its AI capabilities while positioning itself competitively against major players like Microsoft Azure and Google Cloud. This partnership underscores the company’s commitment to leveraging external expertise while maintaining its focus on privacy and security.
Mar Vista Strategic Growth Strategy stated the following regarding Apple Inc. (NASDAQ:AAPL) in its Q3 2024 investor letter:
“Apple Inc. (NASDAQ:AAPL) stock was strong in the quarter as investors viewed the company’s generative AI roadmap and iPhone 16 product cycle positively. The market was reminded of the strength of the Apple ecosystem as management demonstrated how generative AI solutions would be integrated into its iOS 18 operating system, which was broadly released in the iPhone 16 late in calendar Q3. We believe Apple’s generative AI-enabled products should spur a meaningful iPhone upgrade cycle and create new avenues of monetization through its app store and advertising offerings. We believe this will support intrinsic value growth that will range between high single digits and low double-digits over our investment horizon.”
5. NVIDIA Corp. (NASDAQ:NVDA)
Number of Hedge Fund Holders: 193
NVIDIA Corp. (NASDAQ:NVDA) is a global leader in GPU technology and is at the forefront of innovation across diverse sectors, including AI, gaming, and autonomous vehicles. It’s particularly known as a driving force in the AI revolution.
Toward the end of October, the company introduced Enterprise Reference Architectures (Enterprise RAs), designed to assist partners in building high-performance, scalable AI factories. These blueprints provide hardware and software recommendations, ensuring that organizations can efficiently deploy AI infrastructure while avoiding common pitfalls associated with such setups. The Enterprise RAs are tailored to streamline the construction of AI-oriented data centers, making it easier for businesses to meet the growing demands of AI workloads.
Following this announcement, NVIDIA Corp. (NASDAQ:NVDA) further demonstrated its commitment to advancing AI research by partnering with Hugging Face in November. This collaboration aims to fuel open-source AI robotics research and development. It also launched AI agents within its RTX AI platform, which are designed to tackle complex problems and enhance accessibility to advanced AI technologies.
A lot of the company’s growth is attributed to the escalating need for AI solutions across various industries. Such demand underscores NVIDIA Corp.’s (NASDAQ:NVDA) influential position in shaping the future of AI technology and infrastructure.
Ithaka Group’s Ithaka US Growth Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q2 2024 investor letter:
“NVIDIA Corporation (NASDAQ:NVDA) is the market leader in visual computing through the production of high-performance graphics processing units (GPUs). The company targets four large and growing markets: Gaming, Professional Visualization, Data Center, and Automotive. NVIDIA’s products have the potential to lead and disrupt some of the most exciting areas of computing, including: data center acceleration, artifi cial intelligence (AI), machine learning, and autonomous driving. The reason for the stock’s appreciation in the quarter was twofold: First, the stock benefi ted from tremendous excitement surrounding the further development of generative AI and the likelihood this would necessitate the purchase of a large number of Nvidia’s products far into the future; Second, Nvidia posted another strong beat[1]and-raise quarter, where the company upped its F2Q25 revenue guidance above Street estimates, showcasing its dominant position in the buildout of today’s accelerated computing infrastructure.”
4. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 202
Alphabet Inc. (NASDAQ:GOOGL) is a leading technology company, encompassing a diverse portfolio of products, including Google Search, Google Maps, YouTube, Google Cloud, and Waymo. In the third quarter of 2024, its performance was driven by the increasing demand for its search and cloud services, driven by advancements in AI.
Recently, it has made notable improvements in its AI capabilities, particularly in enhancing search functionality by expanding the range of questions users can pose. Additionally, the company announced that new Chromebooks would feature built-in AI functionalities, further integrating advanced technology into everyday consumer products. On the shopping front, Alphabet Inc. (NASDAQ:GOOGL) launched a new AI tool designed to assist consumers in selecting products by providing detailed information and recommendations.
The company’s CEO has highlighted that AI solutions are driving deeper product adoption among existing customers while attracting new clients and securing larger contracts. This momentum is indicative of Alphabet Inc.’s (NASDAQ:GOOGL) strategic investments in AI infrastructure and its commitment to leveraging technology to gain a competitive advantage.
GreensKeeper Asset Management stated the following regarding Alphabet Inc. (NASDAQ:GOOGL) in its Q3 2024 investor letter:
“Alphabet Inc. (NASDAQ:GOOGL) was our largest detractor this quarter, declining by -8.8%. Global antitrust pressures have intensified, with the U.S. Department of Justice and the European Commission targeting several dominant technology companies, including Alphabet. Historically, Alphabet has signed agreements with Apple to serve as the exclusive default search engine for the Safari browser—a practice that a US court recently ruled violated antitrust law. Despite the growing possibility that Alphabet will be required to end its exclusive distribution agreements with Apple, we believe that when faced with a choice screen, the vast majority of users will continue to select Google as their preferred search engine due to its quality advantage over competitors. In EU countries where Google was previously compelled to terminate similar agreements, 97% of users opted to retain Google as their default search engine when given a choice. A similar outcome in the United States would likely have an immaterial impact on GOOGL’s earnings power. Alphabet is also facing other regulatory cases, which we monitor closely.”
3. Meta Platforms Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 235
Meta Platforms Inc. (NASDAQ:META) is a technology company known for its popular social media platforms, including Facebook, Instagram, Threads, and WhatsApp. With over 3 billion daily active users across its services, it has established a vast user base. Recently, it leveraged its expertise in AI and AR to enhance its product offerings. In September, the company launched its AR glasses, Orion, alongside the release of its most affordable mixed-reality headset, Meta Quest 36.
Meta Platforms Inc. (NASDAQ:META), in November, also announced that it would make its open-source AI model, Llama, available to US government agencies dedicated to national security applications. This initiative aims to enhance the efficacy of government operations through advanced AI solutions. Llama has already been adopted by several major technology companies, positioning it as a breakthrough for the company and differentiating it in the competitive AI landscape.
The company is pioneering advertising technology using AI, which presents challenges for competitors attempting to replicate its success. As it continues to innovate and expand its technological capabilities, Meta Platforms Inc. (NASDAQ:META) is poised to maintain its leadership role.
Rowan Street Capital stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its Q2 2024 investor letter:
“We are pleased to report that Meta Platforms, Inc. (NASDAQ:META), our largest position in the fund, has delivered a remarkable performance, +450% since our November 2022 note. Our investment in Meta dates back to 2018, with an average cost basis of approximately $172 per share. Today, the stock trades around $535, reflecting a 3x return over the six-year holding period, equating to a 20% annualized return.
We would like to remind you that achieving these types of returns is never a straight path. From time to time, we might experience volatility — that’s simply part of the investment journey. In fact, wealth creation and volatility go hand in hand. There’s no escaping it; it’s the “price of admission” the market demands. If you take a look at the chart below, you’ll notice the drawdowns META stock has faced over the years, with 2022 standing out as a particularly challenging period, where the stock saw a 75% drop….. ” (Click here to read the full text)
2. Microsoft Corp. (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Microsoft Corp. (NASDAQ:MSFT) is a technology giant that is well-known for its impactful technologies and has recently made significant strides in the AI landscape. In November, it launched new and improved AI models designed to cater to various industries, enhancing its offerings through the Azure AI model catalog.
Recent reports indicate that the company’s investments in AI are beginning to yield positive results. In FQ1 2025, which ended on September 30, the company reported $65.6 billion in revenue, reflecting a 16% increase year-over-year. This was driven by a record quarterly revenue of $38.9 billion from its cloud services, a 22% increase year-over-year. The Azure segment alone achieved a remarkable 33% growth in revenue, due to high demand for AI-driven solutions within its cloud offerings.
These developments highlight the effectiveness of its strategy in harnessing AI to boost business outcomes. The company revealed plans to build 3 trusted platforms focused on maximizing the benefits of AI for the business, demonstrating its approach to integrating AI into core business functions.
Microsoft Corp. (NASDAQ:MSFT) is at the forefront of AI innovation, with a clear focus on expanding its capabilities through partnerships and product enhancements. It is positioned to capitalize on the growing demand for AI solutions across various sectors, reinforcing its status as a leader in the technology industry.
Baron Opportunity Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q3 2024 investor letter:
“Microsoft Corporation (NASDAQ:MSFT) is the world’s largest software and cloud computing company. Microsoft was traditionally known for its Windows and Office products, but over the last five years it has built a $147 billion run-rate cloud business, including its Azure cloud infrastructure service and its Office 365 and Dynamics 365 cloud-delivered applications. Shares gave back some gains from strong performance over the first half of this year. For the fourth quarter of fiscal year 2024, Microsoft reported a strong quarter with total revenue growing 16%, in line with the Street; Microsoft Cloud up 22%; Azure up 30%; 43% operating income margins; and 36% free cash flow margins. Core Azure growth came in one point shy of expectations, however, due to a soft European market and continued constraints on AI compute capacity. In the same vein, while Microsoft reiterated its fiscal 2025 targets of double-digit top-line and operating income growth, quarterly guidance called for Azure growth to slow a bit before accelerating in the back half of the fiscal year, as capital expenditures increase, yielding an expansion of AI compute capacity. We believe this investment is a leading indicator for growth, with more than half of the spend related to durable land and data center build outs, which should monetize over the next 15-plus years. We remain confident that Microsoft is one of the best-positioned companies across the overlapping software, cloud computing, and AI landscapes, and we remain investors.”
1. Amazon.com Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 286
Amazon.com Inc. (NASDAQ:AMZN) is an e-commerce giant and an emerging leader in cloud computing services through Amazon Web Services (AWS), and digital media. It is known for its customer-centric approach and continuous innovation, particularly in AI and machine learning.
It successfully conducted its first drone delivery test in Italy on December 5, a significant step towards launching the service in the country next year. This marks a key milestone for its European drone delivery plans, following successful tests in the US. The test utilized the company’s advanced MK-30 drone system, equipped with cutting-edge computer vision technology. This technology enables the drones to navigate safely, avoiding obstacles and ensuring the safety of people and property while maintaining separation from other aircraft.
Amazon.com Inc. (NASDAQ:AMZN) has been actively pursuing drone delivery initiatives, with ongoing tests in the UK and operational services already underway in select locations in Texas and Arizona. The company continues to collaborate with authorities in both Italy and the UK to fulfill all regulatory requirements for the full-scale launch of drone delivery services. This reveals that the company is well-positioned for sustained long-term growth.
Diamond Hill Select Strategy stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q2 2024 investor letter:
“Among our top individual contributors in Q2 were Amazon.com, Inc. (NASDAQ:AMZN), Texas Instruments and Mr. Cooper Group. Internet retail and cloud infrastructure company Amazon is benefiting from strong profitability, particularly in its Amazon Web Services (AWS) business. Shares also received a boost amid growing optimism around the demand for AWS as Amazon customers’ investments in generative AI projects continue growing.”
As we acknowledge the growth potential of Amazon.com Inc. (NASDAQ:AMZN), our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than AMZN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
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