In this article, we will discuss the 10 Good Stocks to Buy According to Hedge Funds.
When seeking investment opportunities, individual investors often look to hedge funds for guidance. Hedge funds are known for their sophisticated investment strategies, high-level expertise, and significant market influence. Hedge funds are massive players in the global investment landscape, managing trillions of dollars in assets. According to Preqin, as of Q3 2024, hedge funds manage approximately $4.87 trillion in assets globally. This significant amount of capital means that hedge funds have substantial market power. When they invest in certain stocks, their actions can impact stock prices, drive market trends, and influence broader economic sentiment. As such, their decisions are followed closely by institutional and retail investors alike.
A key reason hedge fund stock picks are worth paying attention to is their wide diversification across various sectors and strategies. Multi-strategy hedge funds, which allocate capital across various investment strategies, have gained prominence. According to WealthBriefing from 2017 to the third quarter of 2024, the number of multi-strategy fund launches grew at an annual rate of 4%.
Hedge Funds’ Dual Investment Strategy (Long and Short Positions)
Hedge funds are also known for using a dual approach—investing in both long and short positions. This allows them to profit from rising and falling markets, giving them a comprehensive view of market dynamics. According to data from BarclayHedge, hedge funds that employed a long/short strategy in 2024 saw returns of around 9%.
Hedge funds have increasingly focused on artificial intelligence (AI) and technology sectors, adjusting their portfolios to capitalize on emerging opportunities. According to a Goldman Sachs report analyzing 695 hedge funds with $3.1 trillion in gross equity positions at the start of Q1 2025, there has been a notable shift in investment strategies. The report indicates that hedge funds have become more selective within popular sectors and themes. Notably, they have incrementally added positions to AI Phase 3 companies with AI-enabled revenues. Companies like Salesforce are ranked among the “Rising Stars,” reflecting a significant increase in hedge fund popularity during the last quarter. Given this, we will take a look at some good stocks to buy according to hedge funds.
A financial analyst studying the fundamentals of a co-managed portfolio of mid-cap companies.
Our Methodology
We used a consensus-based approach by using opinions from financial websites like Forbes Advisor, Motley Fool, and Morningstar to first compile a list of good stocks to invest in right now. We then shortlisted and ranked these stocks by using Insider Monkey’s hedge fund data for the fourth quarter of 2024. The stocks are ranked based on the number of hedge funds holding stakes in them, from the lowest to the highest number.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10. Salesforce Inc. (NYSE:CRM)
No of Hedge Fund Holders: 162
Salesforce Inc. (NYSE:CRM) is a leading provider of customer relationship management (CRM) technology, offering a comprehensive Customer 360 platform that integrates sales, service, marketing, commerce, AI, and automation.
Salesforce Inc. (NYSE:CRM) took strategic steps in February 2025 by laying off over 1,000 employees, including 153 in San Francisco. Despite these workforce adjustments, the company remains focused on AI-driven expansion. It had previously announced plans to hire 2,000 sales personnel to support its growing Agentforce AI platform. The company was ranked as the No. 1 software company in G2’s 2025 Best Software Companies list, surpassing Google and Microsoft. This recognition highlights Salesforce Inc. (NYSE:CRM)’s strong market presence.
For the full-year 2024, the company reported revenue rising 11% YoY to $34.86 billion, driven by a 12% increase in subscription and support revenues. GAAP diluted EPS came in at $4.20, while non-GAAP EPS reached $8.22, both reflecting solid earnings growth. Operating cash flow surged 44% YoY to $10.23 billion, with free cash flow up 50% to $9.50 billion, demonstrating strong financial health.
On February 27, 2025, Brad Sills, an analyst at BofA Securities, maintained a “Strong Buy” rating on Salesforce Inc. (NYSE:CRM) but adjusted his price target from $440 to $400.
9. Uber Technologies Inc. (NYSE:UBER)
No of Hedge Fund Holders: 166
Uber Technologies Inc. (NYSE:UBER) is a global technology company that powers seamless movement through its innovative platform. Operating across three key segments—Mobility, Delivery, and Freight—the company connects consumers with drivers for rides, enables food and goods delivery, and facilitates freight logistics.
In a strategic move to enhance its ride-hailing operations, Uber Technologies Inc. (NYSE:UBER) partnered with NVIDIA to accelerate AI-driven autonomous mobility using Cosmos™ and DGX™ Cloud. This collaboration leverages Uber Technologies Inc. (NYSE:UBER)’s vast ride data with NVIDIA’s cutting-edge AI infrastructure to enhance AV model training and deployment. Additionally, in February 2025, the company launched a robot food delivery service in Jersey City, New Jersey, marking its first autonomous delivery deployment on the East Coast. These developments align with the company’s long-term strategy to integrate automation across its mobility and delivery segments, enhancing efficiency and customer experience.
Uber Technologies Inc. (NYSE:UBER) reported strong Q4 2024 financial results, driven by robust growth in Mobility and Delivery segments. Revenue increased 20% YoY to $12 billion, while gross bookings rose 18% YoY to $44.2 billion. Net income surged to $6.9 billion, largely benefiting from a $6.4 billion tax valuation release. Operating income improved to $770 million, up $118 million YoY, and adjusted EBITDA climbed 44% YoY to $1.8 billion.