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.
8. Apple Inc. (NASDAQ:AAPL)
No of Hedge Fund Holders: 166
Apple Inc. (NASDAQ:AAPL) is a global technology leader that designs, manufactures, and markets a wide range of consumer electronics, software, and services. Its product lineup includes the iPhone, Mac, iPad, and Wearables, complemented by software platforms like iOS, macOS, and visionOS.
In February 2025, Apple Inc. (NASDAQ:AAPL) unveiled a substantial investment strategy, committing over $500 billion to its U.S. operations over the next four years. This plan includes the creation of approximately 20,000 new jobs, with a focus on research and development, silicon engineering, software development, and advancements in artificial intelligence. A key component of this initiative is the establishment of a major manufacturing facility in Texas dedicated to producing AI servers, underscoring Apple Inc. (NASDAQ:AAPL)’s commitment to enhancing its technological infrastructure within the United States.
Apple Inc. (NASDAQ:AAPL) delivered strong Q1 FY2025 results, with revenue rising 4% YoY to $124.3 billion. Earnings per share came in at $2.41, surpassing estimates of $2.35 and up from $2.19 in Q1 2024. Services revenue hit $26.34 billion, up from $23.1 billion YoY, reinforcing the company’s shift toward subscription-based income. The company returned over $30 billion to shareholders in the quarter, signaling financial strength.
On March 3, 2025, Daniel Ives of Wedbush reiterated his “Buy” rating on the stock, maintaining a $325 price target.
7. Visa Inc. (NYSE:V)
No of Hedge Fund Holders: 181
Visa Inc. (NYSE:V) is a leading global payments technology company that enables seamless money movement across 200+ countries and territories.
Visa Inc. (NYSE:V) has strengthened its fraud prevention and risk management capabilities with the completion of its acquisition of Featurespace, a leader in AI-driven payments protection technology. This strategic move enhances the company’s ability to provide real-time fraud detection and risk-scoring solutions, reinforcing security for its global client base without adding friction to transactions.
For Q1 2025, Visa Inc. (NYSE:V) had a net revenue rising 10% YoY to $9.5 billion, driven by growth in payments volume up 9%, cross-border transactions up 16%, and processed transactions up 11%. GAAP net income increased 5% to $5.1 billion. EPS grew 8% to $2.58, reflecting Visa’s continued expansion in digital payments. Non-GAAP net income rose 11% to $5.5 billion, with EPS up 14% to $2.75, showcasing solid underlying performance. Operating expenses climbed 22% YoY to $3.3 billion, primarily due to higher personnel and administrative costs. Visa Inc. (NYSE:V) ended the quarter with $16.1 billion in cash and investments, maintaining a strong financial position as it continues to scale its payments infrastructure globally.
6. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
No of Hedge Fund Holders: 186
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is a leading Taiwan-based semiconductor company specializing in integrated circuit manufacturing services. The company offers advanced process technologies, including 5nm mass production, and is actively developing 3nm and 2nm process nodes.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) faced operational challenges in January 2025 after a 6.4-magnitude earthquake in southern Taiwan led to wafer losses, though facilities remained structurally intact. Meanwhile, speculation around a potential investment in Intel surfaced, though Taiwan’s Economy Ministry denied receiving official information. It reaffirmed that any major overseas joint ventures would require government approval. These developments highlight the company’s resilience in managing disruptions.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) delivered strong Q4 2024 results, with net revenue rising 14.3% YoY to $26.88 billion, driven by solid demand for advanced chip technologies. Net income surged 15.2% YoY to $11.39 billion, while EPS climbed 57% to $0.44, reflecting strong profitability. Operating expenses increased 20.6% YoY to $2.63 billion, in line with business expansion.
On February 18, 2025, Charles Shi of Needham reiterated his “Strong Buy” rating on the stock, maintaining a $225 price target.
5. NVIDIA Corporation (NASDAQ:NVDA)
No of Hedge Fund Holders: 223
NVIDIA Corporation (NASDAQ:NVDA) is a leading computing infrastructure company specializing in accelerated computing to tackle complex computational challenges. NVIDIA Corporation (NASDAQ:NVDA)’s AI-driven platforms and cutting-edge GPUs are widely used in gaming, enterprise computing, and emerging technologies like robotics and the metaverse.
NVIDIA Corporation (NASDAQ:NVDA) continues to drive technological innovation with the launch of its GeForce RTX 50 series GPUs at CES 2025, featuring Blackwell architecture for enhanced AI capabilities and gaming performance. The flagship RTX 5090, priced at $2,000, showcases significant improvements over previous generations, reinforcing the company’s leadership in the GPU market. However, competitive pressures are emerging, with Chinese AI startup DeepSeek unveiling a lower-power AI model, potentially challenging NVIDIA Corporation (NASDAQ:NVDA)’s dominance in AI hardware. Meanwhile, policy risks loom, as President Trump’s proposed 25% tariff on semiconductor imports. This could increase production costs and disrupt the company’s global supply chain.
NVIDIA Corporation (NASDAQ:NVDA) delivered exceptional Q4 FY2025 results, with revenue surging 78% YoY to $39.3 billion, driven by strong demand for its Blackwell AI supercomputers. GAAP net income jumped 80% YoY to $22.1 billion, while GAAP EPS rose 82% to $0.89, reflecting robust profitability. Operating income increased 77% YoY to $24 billion, despite operating expenses rising 48% to $4.7 billion due to expansion efforts.
4. Alphabet Inc. (NASDAQ:GOOGL)
No of Hedge Fund Holders: 234
Alphabet Inc. (NASDAQ:GOOGL) is a global technology company that provides a wide range of products and services across the United States, Europe, the Middle East, Africa, the Asia-Pacific, Canada, and Latin America. Operating through three main segments—Google Services, Google Cloud, and Other Bets—the company offers popular platforms such as Search, YouTube, Android, Google Maps, and Google Play.
Alphabet Inc. (NASDAQ:GOOGL) is doubling down on its AI-driven growth strategy with a $75 billion capital expenditure plan for 2025, prioritizing investments in technical infrastructure, including servers and data centers. This aggressive spending underscores the company’s commitment to scaling AI capabilities and meeting surging demand for AI-powered services. In tandem with these investments, the company is also restructuring its Cloud division, cutting fewer than 100 positions in sales operations. This was done to streamline resources toward AI and other high-priority growth areas.
Alphabet Inc. (NASDAQ:GOOGL) delivered a strong Q4 2024 performance, with revenues rising 12% YoY to $96.5 billion, driven by double-digit growth in Google Services up 10% and Google Cloud up 30%. Operating income surged 31% YoY, expanding the operating margin to 32% (up 5 percentage points), highlighting improved efficiency and AI-driven cost optimizations. Net income climbed 28%, while EPS jumped 31% to $2.15, reflecting strong profitability. CEO Sundar Pichai emphasized AI innovation as a key growth driver, citing Google Cloud’s AI infrastructure and YouTube’s dominance in streaming.
3. Meta Platforms Inc. (NASDAQ:META)
No of Hedge Fund Holders: 262
Meta Platforms Inc. (NASDAQ:META) is focused on connecting people and enabling digital communities through social media, virtual reality (VR), and mixed reality (MR) experiences. It operates through two main segments: Family of Apps (FoA), which includes Facebook, Instagram, Messenger, Threads, and WhatsApp, and Reality Labs (RL), which develops VR and MR hardware, software, and content.
Meta Platforms Inc. (NASDAQ:META) is doubling down on AI infrastructure. The company aims to secure $35 billion in financing, led by Apollo Global Management, to expand U.S. data centers and meet the rising computational demands of artificial intelligence. In a strategic push toward AI monetization, the company also announced plans to launch a paid subscription service for its AI chatbot in Q2 2025, positioning itself to compete with advanced AI offerings in the market.
Meta Platforms Inc. (NASDAQ:META) posted strong full-year 2024 results, with revenue rising 22% YoY to $164.5 billion. This was driven by a 10% increase in the average ad price and 11% growth in ad impressions across its platforms. Total expenses grew 8% YoY to $95.1 billion, while free cash flow surged to $52.1 billion, reinforcing the company’s financial strength. Capital expenditures reached $39.2 billion, reflecting continued investments in AI and data infrastructure.
On February 11, 2025, Ivan Feinseth of Tigress Financial maintained his “Strong Buy” rating on the stock while raising the price target from $645 to $935.
2. Microsoft Corporation (NASDAQ:MSFT)
No of Hedge Fund Holders: 317
Microsoft Corporation (NASDAQ:MSFT) is a leading global technology company that develops and supports software, services, devices, and cloud solutions. With its cloud-first and AI-driven approach, the company continues to drive digital transformation across businesses and consumers worldwide.
Microsoft Corporation (NASDAQ:MSFT) has announced a strategic shift in its communications portfolio, with the planned shutdown of Skype on May 5, 2025. The decision, disclosed on February 28, 2025, aligns with the company’s broader focus on Microsoft Teams, reflecting its continued investment in enterprise collaboration solutions. The company has assured that the transition will not result in job cuts, emphasizing a seamless migration for users.
Microsoft Corporation (NASDAQ:MSFT) reported strong Q2 FY25 results, driven by continued growth in cloud and AI services. Revenue came in at $69.6 billion, up 12% YoY, while operating income rose 17% to $31.7 billion. Net income increased 10% to $24.1 billion, with diluted EPS reaching $3.23, also up 10% YoY. The company’s Cloud revenue surged 21% YoY to $40.9 billion, reflecting the company’s deep investment in AI and enterprise solutions. CEO Satya Nadella highlighted that Microsoft Corporation (NASDAQ:MSFT)’s AI business has surpassed an annual run rate of $13 billion, growing 175% YoY.
1. Amazon.com Inc. (NASDAQ:AMZN)
No of Hedge Fund Holders: 339
Amazon.com Inc. (NASDAQ:AMZN) is a global e-commerce and technology company offering diverse products and services across its online and physical stores. Operating through three key segments—North America, International, and Amazon Web Services (AWS)—the company focuses on selection, price, and convenience to serve consumers worldwide.
Amazon.com Inc. (NASDAQ:AMZN) continues expanding its AI and entertainment footprint with two major developments in February 2025. The company announced a significant generative AI upgrade to Alexa, enhancing its ability to handle multiple sequential prompts and execute complex tasks. This move is aimed at improving user engagement and driving paid subscriptions. Additionally, it secured full creative control of the James Bond franchise, taking over from long-time custodians Michael G Wilson and Barbara Broccoli. This acquisition positions Amazon Prime for exclusive Bond-related content, including potential new films and TV spin-offs.
Amazon.com Inc. (NASDAQ:AMZN) delivered strong full-year 2024 results, with net sales rising 11% YoY to $638 billion. This was driven by solid growth across its North America (+10%), International (+9%), and AWS (+19%) segments. Operating income nearly doubled to $68.6 billion, up from $36.9 billion in 2023, reflecting improved profitability across all segments. Net income surged to $59.2 billion, compared to $30.4 billion in the prior year. Operating cash flow grew 36% to $115.9 billion, while free cash flow improved to $38.2 billion.
On February 7, 2025, Ronald Josey of Citigroup maintained his “Strong Buy” rating on Amazon.com Inc. (NASDAQ:AMZN) while slightly lowering the price target from $275 to $273.
Overall, Amazon.com Inc. (NASDAQ:AMZN) ranks first on our list of the 10 Good Stocks to Buy According to Hedge Funds. While we acknowledge the potential for AMZN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. 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.
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