In this article, we will take a look at the 12 Best Nanotechnology Stocks to Buy According to Hedge Funds.
Nanotechnology, a groundbreaking concept introduced by Nobel Prize-winning physicist Richard Feynman in 1959 during a speech at Caltech, focuses on working with materials at an incredibly small scale—between one and 100 nanometers. At the nanoscale, things get interesting—surface area and quantum effects start playing a big role in how materials behave. Nanotechnology thus focuses on understanding and harnessing these unique properties, covering all kinds of research and technologies that take advantage of them.
Small Science VS Big Impact
One of the most exciting applications of nanotechnology is in the semiconductor industry. Today’s cutting-edge chips, like those powering iPhones and AI processors, rely on transistors that are just a few nanometers wide. Nanotechnology also plays a crucial role in improving semiconductor manufacturing, with specialized coatings and treatments that enhance equipment durability and efficiency, cutting downtime and boosting output.
Healthcare is another sector transformed by nanotechnology, becoming a cornerstone of modern biomedicine. From improving cancer diagnosis to enabling targeted drug delivery and advancing pharmaceutical manufacturing, it’s transforming the quality of treatments and boosting patient outcomes. This progress has led to the rise of nanomedicine, a field focused on innovative diagnostics, disease prevention, and streamlined drug development. In drug delivery, nanoscale technologies enhance how medications work by improving their stability and effectiveness. Perhaps the most exciting breakthrough is nanorobots—tiny machines that can travel through the bloodstream to deliver drugs precisely where they’re needed. This approach not only boosts precision but also reduces side effects, paving the way for more personalized and efficient treatments.
In the U.S., the National Nanotechnology Initiative (NNI) drives much of the research and development in this field. With participation from 30 federal agencies, the program underscores nanotechnology’s growing importance. The NNI’s 2024 budget request of $2.16 billion—the largest yet—focuses on both fundamental research and real-world applications. Given the trade tensions with China, which leads the world in nanotech startups, this investment is likely to grow, highlighting the strategic value of staying at the forefront of nanotechnology innovation.
The potential of nanotechnology is enormous. The global market is projected to soar to $33.63 billion by 2030, growing at an impressive 36.4% annually, according to Allied Market Research. Some sub-segments are expanding even faster—like the graphene market, expected to grow at 46.6% annually, and lipid nanoparticles, projected to rise at a 13.6% CAGR through 2029. With that, let’s take a look at the best nanotechnology stocks to invest in.
Our Methodology
To create our list of the Best Nanotechnology Stocks to Buy, we began by identifying companies with a strong presence in nanotechnology and its related industries. We explored ETFs and online resources to compile an initial pool of candidates. From there, we narrowed the list by analyzing hedge fund interest, using data from Insider Monkey’s Q3 2024 database, which tracks the activity of 900 hedge funds.
Why do we care about what hedge funds do? 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).
12. Bruker Corporation (NASDAQ:BRKR)
Number of Hedge Fund Holders: 31
Bruker Corporation (NASDAQ:BRKR), a leading American manufacturer of high-performance scientific instruments, specializes in tools for molecular and materials research as well as industrial analysis. Its advanced analytical and diagnostic solutions support life sciences, pharmaceuticals, and industrial applications, enabling exploration at molecular, cellular, and microscopic levels. Bruker’s diverse product portfolio, including BIOSPIN instruments and elemental analyzers, has made it a cornerstone of the biochemical nanotechnology sector, with its equipment playing a critical role across the industry.
On December 19, Guggenheim initiated coverage of Bruker Corporation (NASDAQ:BRKR) with a Buy rating and a price target of $72. The firm praised Bruker’s leadership in its field, particularly highlighting the scientific rigor of its proteomics tools. Guggenheim expressed optimism about Bruker’s future, citing its strengthened market position and potential for revenue growth that outpaces peers, alongside significant margin expansion.
Bruker’s recent acquisitions of Chemspeed, NanoString, and ELITech reflect its strategic focus on growth areas such as spatial biology, molecular diagnostics, and laboratory automation. These moves align with its broader aim of enhancing innovation and expanding its capabilities.
In Q3 2024, Bruker Corporation (NASDAQ:BRKR) reported a 16.4% year-over-year revenue increase, reaching $864.4 million, driven by organic growth and contributions from recent acquisitions. However, the company revised its full-year guidance downward, citing slower-than-expected recoveries in the biopharma sector and weaker demand in the Chinese market.
11. PPG Industries Inc. (NYSE:PPG)
Number of Hedge Fund Holders: 32
PPG Industries Inc. (NYSE:PPG), a leader in the coatings industry, has long leveraged nanotechnology in its product development. The company integrates nanoparticles developed in-house into its advanced coatings, including those for the aerospace sector. These coatings offer features such as erosion resistance, ultraviolet light blocking, electromagnetic shielding, and compatibility with night vision systems, showcasing PPG’s innovation in vacuum and polymer coating technology.
Citi reaffirmed its Buy rating on PPG Industries Inc. (NYSE:PPG) on December 3, maintaining a price target of $150. PPG’s management remains optimistic about its outlook heading into 2025, highlighting strong performance in key areas like Comex, Aerospace, Packaging, and Protective & Marine coatings. While the automotive sector poses uncertainties, PPG is well-positioned to benefit from its robust partnerships with Chinese original equipment manufacturers (OEMs). General industrial activity shows mixed signals, but the company anticipates stable to modest growth across segments in 2025.
In Q3 2024, PPG Industries Inc. (NYSE:PPG) posted a profit of $468 million, or $2 per share, up from $426 million, or $1.79 per share, in the same period last year. Adjusted earnings per share rose to $2.13, compared to $2.07 in the previous year. However, revenue dipped 1.5% year-over-year to $4.57 billion, driven by weaker global industrial production that impacted demand in the Industrial Coatings segment.
10. DuPont de Nemours Inc. (NYSE:DD)
Number of Hedge Fund Holders: 47
DuPont de Nemours, Inc. (NYSE:DD), based in Delaware, is a leading provider of technology-driven materials and solutions, operating through three primary segments: Electronics & Industrial, Water & Protection, and Corporate & Other. Known for groundbreaking innovations like Teflon, DuPont has been a key player in the nanotechnology space for decades, leveraging its chemical expertise to develop industrial nanoparticles that often outpace competitors in performance and reliability.
Earlier this August, DuPont de Nemours, Inc. (NYSE:DD) acquired assets from C3Nano Inc., a California-based materials company specializing in silver nanowire technology and formulations. This acquisition strengthens DuPont’s electronic materials portfolio, enabling the company to offer advanced solutions for transparent and flexible films and inks. These new capabilities now fall under DuPont’s Interconnect Solutions (ICS) business within its Electronics & Industrial segment.
DuPont de Nemours, Inc. (NYSE:DD) posted strong Q3 2024 results, with its Electronics & Industrial segment delivering an operating EBITDA of $467 million, a 22% increase year-over-year. Growth drivers included higher production rates, increased volumes, restructuring savings, and contributions from recent acquisitions.
9. Synopsys, Inc. (NASDAQ:SNPS)
Number of Hedge Fund Holders: 53
Synopsys, Inc. (NASDAQ:SNPS) is a leader in electronic design automation software, helping chipmakers overcome challenges in the nanotechnology era. Its innovative tools include the QuantumATK Atomistic Simulator, which allows companies to simulate material performance at the nanometer scale, and Composite Current Source (CCS) modeling technology, enabling detailed timing, noise, and power analysis with a unified library model for nanometer designs.
On December 6, Piper Sandler revised its outlook on Synopsys, Inc. (NASDAQ:SNPS), lowering the price target from $670 to $655 while maintaining an Overweight rating. The adjustment came after the company provided fiscal year 2025 revenue guidance that fell short of expectations, including Piper Sandler’s estimates, even after accounting for the 53rd week and the divestiture of the Optical Solutions Group (OSG). Synopsys’ FY25 guidance midpoint was $6.775 billion, slightly below the analyst’s $6.830 billion projection. Notably, this guidance still appears to include OSG revenue. The company has adopted a cautious stance on FY25, particularly regarding growth prospects in China. Piper Sandler noted that even with weaker growth in China, Synopsys, Inc. (NASDAQ:SNPS) could still achieve low-teens growth, excluding the effects of the 53rd week and the China market.
On December 11, Reuters reported that Synopsys, Inc. (NASDAQ:SNPS) has proposed selling one of its own units, along with a unit from Ansys, to secure European Union approval for its $35 billion acquisition of Ansys’ chip design software business. Ansys is known for its software solutions for autonomous vehicle sensor simulations. The European Commission is currently seeking feedback from competitors and customers on Synopsys’ proposal.
Parnassus Core Equity Fund stated the following regarding Synopsys, Inc. (NASDAQ:SNPS) in its Q3 2024 investor letter:
“Synopsys, Inc. (NASDAQ:SNPS) plays a crucial role in optimizing semiconductor processing power beyond physical design limits. It benefits from companies like Google and Amazon designing their own chips and the proliferation of AI accelerator development. Its proprietary EDA technology and rising demand for custom chips and AI accelerators should drive durable revenue and earnings growth.”
8. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 56
International Business Machines Corporation (NYSE:IBM) is a key player in Infrastructure as a Service (IaaS), offering solutions for cloud infrastructure, AI systems, storage, and networking. IBM’s impact on nanotechnology has been groundbreaking, starting with its invention of the scanning tunneling microscope, which allowed scientists to visualize atomic structures. More recently, the company made headlines by developing a 2-nanometer semiconductor chip using nanosheet technology, poised to drive advancements in technologies like autonomous vehicles and IoT.
In Q3 2024, International Business Machines Corporation (NYSE:IBM) reported $15 billion in revenue, marking a 1.46% year-over-year growth. This was driven by strong performance in its Software segment, including a recovery in Red Hat. The company’s generative AI business also showed remarkable progress, surpassing $3 billion in revenue—an increase of more than $1 billion compared to the previous quarter. For Q4 2024, IBM projects consistent revenue growth, supported by continued strength in its Software segment.
7. Analog Devices, Inc. (NASDAQ:ADI)
Number of Hedge Fund Holders: 63
Analog Devices, Inc. (NASDAQ:ADI) is a leading semiconductor manufacturer specializing in integrated circuits and systems. Just last year, the company invested over $1 billion to expand its Beaverton wafer fabrication facility, significantly increasing its capacity for nanoscale product manufacturing. This expansion tripled internal production capabilities, leveraging advanced fabrication technology for 180-nanometer and smaller processes. Analog Devices, Inc. (NASDAQ:ADI) also collaborates with MIT.nano, a premier research center for nanoscience and nanotechnology, supporting innovations like nanoDAC digital-to-analog converters, amplifiers, and data converters.
In fiscal year 2024, Analog Devices, Inc. (NASDAQ:ADI) demonstrated strong financial performance, generating $9.4 billion in revenue and an earnings per share of $6.38. The company achieved a robust operating margin of 41% and a free cash flow margin of 33%, returning $2.4 billion to shareholders. Soon after the company’s earnings report, Truist Securities revised its outlook, lowering the price target from $233 to $227 while maintaining a Hold rating due to cautious forecasts for 2025. Conversely, Goldman Sachs reaffirmed its Buy rating, raising the price target to $261, signaling a 19% potential upside.
6. ASML Holding N.V. (NASDAQ:ASML)
Number of Hedge Fund Holders: 64
ASML Holding N.V. (NASDAQ:ASML), a key player in the semiconductor industry, is deeply involved in nanotechnology advancements. The company specializes in lithographic systems that use light to etch complicated patterns on silicon wafers, a critical step in chip manufacturing. ASML’s groundbreaking contribution lies in its development of extreme ultraviolet (EUV) lithography, a state-of-the-art technology that enables the creation of nanometer-scale features on silicon.
The demand for lithography is anticipated to peak in 2025 but stay robust through 2030, driven by the industry’s shift to Gate-All-Around (GAA) transistor architecture and the gradual rollout of high numerical aperture (high-NA) EUV technology. These advancements are expected to fuel continued demand for ASML’s cutting-edge tools in the years ahead.
On December 3, BNP Paribas Exane resumed coverage of ASML Holding N.V. (NASDAQ:ASML) with an Outperform rating and a price target of €817. The firm highlighted ASML’s dominant position in the semiconductor market and its strong potential for revenue growth through 2030. BNP Paribas Exane expressed confidence that ASML could reach the upper end of its 2030 guidance, projecting a potential 6% upside to consensus revenue estimates for that year. The firm emphasized ASML’s unique position as a cornerstone of the semiconductor ecosystem, describing it as having the “widest moat in semiconductors” and calling it the “brains behind the brains of AI.”
Polen Capital mentioned ASML Holding N.V. (NASDAQ:ASML) in its Q3 2024 investor letter. Here is what the fund said:
“During the period, we added to our ASML Holding N.V. (NASDAQ:ASML) position in the face of recent volatility across the semiconductor sector broadly. As readers may recall, we trimmed the position in 4Q 2023 as we expected stagnating business trends to set in during 2024. Stagnation did occur, as did Al hysteria. We now foresee robust growth and believe ASML will see a significant ramp in business trends in 2025 and beyond. ASML’s business backlog and its customers’ persistent development of leading-edge chip sizes drive our expectation of rapid growth for the company in the coming years. In our view, shares trade at a very reasonable valuation for one of the world’s most competitively advantaged growth companies, particularly considering the accelerated growth we expect.”
5. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 68
Intel Corporation (NASDAQ:INTC), a global leader in semiconductor manufacturing, is best known for creating the x86 microprocessor series, the foundation of most personal computers. At its core, the company thrives on nanotechnology, producing transistors as small as 7 nanometers and leading innovations like FinFET designs.
In a strategic move to strengthen its position in the foundry market, Intel Corporation (NASDAQ:INTC) partnered with Arm last year to develop low-power compute system-on-chips (SoCs) using Intel’s 18A process through its Intel Foundry Services (IFS). On top of that, Intel’s purchase of cutting-edge extreme ultraviolet lithography tools from ASML signals its ambitious plans to produce 1.8nm chips by 2025.
On December 3, Evercore ISI reaffirmed its In Line rating for Intel Corporation (NASDAQ:INTC) with a price target of $26, following the announcement of CEO Pat Gelsinger’s retirement. While recognizing the progress made under Gelsinger’s leadership in closing the technology gap with competitors like TSMC, Evercore ISI flagged ongoing challenges, including competition from AMD, NVIDIA, and Intel’s customers developing custom CPUs and AI processors.
Intel’s Q3 2024 financial results showcased resilience, with revenue reaching $13.3 billion, a 4% sequential increase. The company also highlighted its Mobileye division, forecasting $485 million in full-year revenue, and its programmable chips division, Altera, which achieved a 14% sequential growth, generating $412 million in revenue for the quarter ending September.
4. Applied Materials, Inc. (NASDAQ:AMAT)
Number of Hedge Fund Holders: 74
Applied Materials, Inc. (NASDAQ:AMAT), a leader in nanomanufacturing technology, has carved out a strong niche by engineering advanced equipment and software essential for semiconductor production, LCDs, and solar power solutions. The company’s innovative selective tungsten deposition process, akin to atomic-scale 3D printing, significantly enhances transistor efficiency and performance. With expertise in molecular nanotechnology—manipulating atoms to create precise materials—Applied Materials, Inc. (NASDAQ:AMAT) has successfully met soaring demand for its products, even during global chip shortages.
In fiscal 2024, Applied Materials, Inc. (NASDAQ:AMAT) achieved record-breaking results for the fifth consecutive year, with net sales reaching $27.2 billion, up 2.5% from the prior year. Non-GAAP earnings per share climbed 7.5% to $8.65. For Q1 2025, the company projects revenue of $7.15 billion and non-GAAP EPS of $2.29. Over the past fiscal year, Applied Materials returned more than $5 billion to shareholders through dividends and share buybacks.
In November, TD Cowen adjusted its price target for Applied Materials, Inc. (NASDAQ:AMAT) from $250 to $230 while maintaining a Buy rating. The firm acknowledged the company’s solid gross margin, supported by operational improvements and value-based pricing, but flagged concerns about slower quarter-over-quarter revenue growth compared to peers and potential volatility in end-market demand. Despite these challenges, the company remains well-positioned, bolstered by market share gains in Gate-All-Around (GAA) technology and a leading 25% share in the DRAM and High Bandwidth Memory (HBM) segments.
Parnassus Investments mentioned Applied Materials, Inc. (NASDAQ:AMAT) in its Q3 2024 investor letter. Here is what the fund said:
“Applied Materials, Inc. (NASDAQ:AMAT), the world’s largest supplier of wafer fabrication equipment for semiconductors, saw its shares pressured by negative sentiment around a potentially broad-based trend of capital expenditure cuts in memory spending.”
3. 3M Company (NYSE:MMM)
Number of Hedge Fund Holders: 82
3M Company (NYSE:MMM), a renowned American multinational conglomerate, operates across diverse industries, including adhesives, abrasives, ceramics, and nanotechnology. Among its notable innovations is a lightweight carbon monoxide filtration system, leveraging nanotechnology to improve air quality through advanced respiratory systems.
On December 26, CFRA upgraded the MMM stock from Buy to Strong Buy, setting a price target of $165. Analyst Jonathan Sakraida highlighted the company’s strategic portfolio review, which aims to divest non-core assets and focus on high-growth sectors. He also noted that ongoing restructuring efforts are expected to enhance 3M’s margins and strengthen its financial position, providing a positive outlook for the company.
In Q3 2024, 3M Company (NYSE:MMM) reported solid financial results, with $6.07 billion in revenue, a 1% year-over-year increase that surpassed analyst expectations by $10.66 million. The company demonstrated strong operational performance, achieving double-digit growth in adjusted earnings and robust free cash flow generation, further reinforcing its financial resilience.
2. Thermo Fisher Scientific Inc. (NYSE:TMO)
Number of Hedge Fund Holders: 98
Thermo Fisher Scientific Inc. (NYSE:TMO) delivers a wide array of products and services across life sciences solutions, analytical instruments, specialty diagnostics, and laboratory products, serving markets worldwide. Earlier this year, the company unveiled advancements in nanotechnology and related tools, including new versions of its Orbitrap Ascend Tribrid Mass Spectrometer, designed for biopharma, structural biology, and multiomics research. Additionally, its Vanquish Neo UHPLC device enhances mass spectrometer efficiency by improving data collection and sample throughput.
On October 24, Thermo Fisher Scientific Inc. (NYSE:TMO) reported mixed Q3 earnings. The company posted an EPS of $5.28, slightly beating estimates, while revenue of $10.6 billion fell $30 million short of expectations. Despite this, Thermo Fisher raised its full-year EPS guidance to $21.35–$22.07, up from the prior range of $21.29–$22.07, while maintaining its revenue guidance between $42.4 billion and $43.3 billion.
On December 20, RBC Capital Markets adjusted its outlook on Thermo Fisher Scientific Inc. (NYSE:TMO), lowering the price target from $711 to $692 but maintaining an Outperform rating. RBC praised the company’s strong management and a 20+ year track record of successful consolidations and share price growth, highlighting its growth potential in the life sciences and diagnostics sector. While acknowledging potential revenue headwinds in 2025, RBC noted that buy-side expectations for organic growth are at 4%, slightly below the street average of 4.7%, which has been trending downward.
1. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 158
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), the world’s largest dedicated semiconductor foundry, supplies chips to top technology giants like Apple, NVIDIA, and Qualcomm. With its advanced 2nm chip technology, leadership in cutting-edge nodes (3nm, 5nm, and 7nm), and strategic global expansion, TSMC is set to maintain its dominance in the semiconductor industry, particularly in AI and high-performance computing (HPC) chips.
Recently, TSMC announced plans to build two additional fabrication plants (P4 and P5) in Kaohsiung, Taiwan, bringing the region’s total to five fabs. These developments, initially revealed by the city’s mayor and detailed by Data Center Dynamics, are in the planning stages, with environmental assessments expected soon. This follows the company’s earlier initiative to construct a third 2nm fab at Kaohsiung’s Nanzih Technology Industrial Park, a 238-hectare site where work on the first fab (P1) is already underway, with mass production slated to begin next year.
TSMC delivered exceptional results in Q3, with revenue surging 39% year-over-year to approximately $23.6 billion and net income climbing 54% to around $10.1 billion. Both figures exceeded analyst expectations. The company credited this growth to rising demand for AI-related hardware and anticipates this momentum to carry through year-end.
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.”
While we acknowledge the potential of TSM to grow, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than TSM 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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