On April 1, Chris Verrone, chief market strategist at Strategas Research Partners, appeared on CNBC’s ‘Closing Bell’ to talk about his outlook on the tech sector. Verrone believes that most of the current market’s negative sentiment has already been factored into recent stock prices. He highlighted that even after the market’s decline, the VIX, and the currency and bond volatility are lower than they were during the mid-March stress period. Plus, fewer stocks are hitting new lows. He thinks that market lows are formed during periods of bad news, and the market will rally from its current level with an anticipated range of 5,900 to 5,950.
Verrone believes that the current downturn is more than a typical 10% correction so it will take some time to figure out the market’s true direction. He emphasized the importance of monitoring market breadth, new highs, and credit conditions in the upcoming weeks and months. He also acknowledged the shift in investor sentiment, with more bears than bulls. As the conversation touched on the impact of the Fed and politics in a market, Verrone stated that he pays more attention to what the 2-year Treasury yield tells him instead of listening to what Fed officials have to say. He noted that the 2-year yield’s decline from 3.83% to 3.85% suggests a shift in the market expectations for the Fed’s actions. He highlighted the resilience of financials during the correction and contrasted it with the weakness of tech. He thinks that, unlike financials that entered the correction as leaders, the tech sector might not be able to regain the leadership role.
While Verrone’s stance acknowledges the current weakness in tech, it’s important to note that the tech sector remains one of the more innovative markets in the long run. For instance, MAG7 continues to be a driving force for this market. That being said, we’re here with a list of the 12 best tech stocks to buy for long-term investment.
A technician installing a complex of microcontrollers and internet of things devices inside a server rack.
Our Methodology
We first sifted through financial media reports to compile a list of the top tech stocks that are being touted as long term investment plays. We then selected the 12 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 Q4 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
12 Best Tech Stocks to Buy For Long-Term Investment
12. Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Holders: 64
Palantir Technologies Inc. (NASDAQ:PLTR) builds and deploys software platforms for the intelligence community to assist in counterterrorism investigations and operations globally. One of its offerings includes the Artificial Intelligence Platform (AIP) which provides unified access to open-source, self-hosted, and commercial LLMs that transform structured and unstructured data into LLM-understandable objects.
In 2024, the company’s US commercial sector grew by 54% year-over-year due to AIP and generated $702 million in revenue. In Q4 alone, the sector grew by 64%. It booked $803 million in Total Contract Value in Q4, which indicated a 134% year-over-year improvement. The customer base for this segment also jumped by 73%. Palantir Technologies Inc. (NASDAQ:PLTR) now projects US Commercial revenue to surpass $1.079 billion in 2025 at a 54% growth rate.
To drive this, the company has been investing in technical talent and product development to remain at the forefront of the AI revolution. One of its initiatives, called Warp Speed, is modernizing American manufacturing and will expand the company’s pipeline. On March 18, Jefferies reiterated an Underperform rating on the company with a $60 price target.
Alger Mid Cap Focus Fund is positive on the company due to its strong financials and stated the following regarding Palantir Technologies Inc. (NASDAQ:PLTR) in its Q4 2024 investor letter:
“Palantir Technologies Inc. (NASDAQ:PLTR) builds advanced platforms for data integration, management, and security, enabling interactive, AI-assisted analysis for its users. Its core offerings include Palantir Gotham, designed for government clients, and Palantir Foundry, tailored for commercial customers. Originally focused on U.S. intelligence agencies, Palantir has expanded into defense contracts with western governments and entered the commercial market in 2016. During the quarter, shares contributed to performance after the company reported better-than-expected fiscal third quarter operating results, along with management raising its full year 2024 revenue guidance. Management noted that the recent launch of its AI platform (AIP), which leverages generative AI to optimize business operations, has driven significant growth and investor interest. Additionally, we believe Palantir could be a key partner for the U.S. government’s new Department of Government Efficiency (DOGE), as its AI-driven platforms are ideally suited to help identify inefficiencies, allocate resources effectively, and achieve cost reductions.”
11. Mastercard Inc. (NYSE:MA)
Number of Hedge Fund Holders: 151
Mastercard Inc. (NYSE:MA) is a technology company that provides international transaction processing and other payment-related products and services. It offers integrated products and value-added services for account holders, merchants, financial institutions, businesses, and other organizations. It offers payment solutions and services under the MasterCard, Maestro, and Cirrus.
The company’s Value-Added Services and Solutions segment made about $11 billion in 2024 revenue. Currently, this segment has captured only ~7% of its potential $165 billion SAM. Despite this, the company saw a 17% increase in its net revenue during Q4 alone which was fueled by acquisitions and differentiated products. For instance, the company recently acquired Recorded Future, which is the world’s largest threat intelligence company. Recorded Future’s client base includes over 50% of the Fortune 100 and government agencies in 45 countries, which positions Mastercard Inc. (NYSE:MA) for significant growth.
For the full year 2025, the company projects net revenue growth in the low teens range, which excludes the impact of acquisitions. Acquisitions are alone expected to add 1% to 1.5% to this growth. Value-Added Services and Solutions segment creates a powerful virtuous cycle with the company’s core payments business. Through this segment, the company generates substantial revenue and strengthens the security and efficiency of its entire ecosystem.
Conventum – Alluvium Global Fund favors Mastercard Inc. (NYSE:MA) due to its high growth potential. The fund stated the following regarding the company in its Q4 2024 investor letter:
“Last quarter we wrote about the credit card companies and the Fund’s latest investment, Visa (up 15.2%). With its strong share price performance, that position had grown to be greater than 5%. As we had discussed here, we consider there to be negligible differences in investment merits when compared to Mastercard Incorporated (NYSE:MA) (up 6.8%). Whilst Visa appears a little cheaper on traditional price metrics, our view is that Mastercard has marginally higher growth prospects. Irrespective, both are deserving positions in the portfolio, and given their similarities, and the 5/10/40 rule, in order for us to maintain maximum portfolio flexibility it made sense to sell a little Visa and buy a little Mastercard, and their combined position is 6.2%.”
10. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 161
Broadcom Inc. (NASDAQ:AVGO) is a tech company that designs, develops, and supplies various semiconductor devices. It focuses on complex digital and mixed signal complementary metal oxide semiconductor-based devices and analog III-V-based products. It operates in two segments: Semiconductor Solutions and Infrastructure Software.
The company’s Semiconductor Solutions improved its revenue by 11% year-over-year in FQ1 2025 to generate an amount of $8.2 billion. A lot of this was the segment’s AI revenue, which reached $4.1 billion alone, and marked a surge of 77%. In FQ2, the company expects AI revenue to increase by 44%. This growth comes from hyperscale customers who heavily invest in next-gen AI models. Three of these major hyperscale clients are expected to create a SAM of $60-$90 billion by FY27.
Additionally, Broadcom Inc. (NASDAQ:AVGO) is working with such clients to develop systems that will support massive AI clusters, ranging from 500,000 to 1,000,000 AI accelerators. The company is also developing cutting-edge technologies like two-nanometer AI XPUs with 3.5D packaging, which targets a performance of 10,000 teraflops. It’s working on the next-generation 100 terabit Tomahawk 6 switch to support the scaling of large AI clusters. On March 7, Piper Sandler reiterated its Overweight rating on the company with a $250 price target due to its strong performance driven by AI growth.
Renaissance Large Cap Growth Strategy stated the following regarding Broadcom Inc. (NASDAQ:AVGO) in its Q4 2024 investor letter:
“Broadcom Inc. (NASDAQ:AVGO) was another large contributor in the quarter after reporting solid operating results. The company presented an optimistic outlook, driven by its dominant position in artificial intelligence application-specific chipsets. In addition, the company should continue to benefit from its leading position in several end markets including data centers and cloud infrastructure, which have favorable secular growth trends. Broadcom is also seeing margin expansion and improved visibility, as the mix of software revenues increases, following the acquisition of VMWare.”
9. Salesforce Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 162
Salesforce Inc. (NYSE:CRM) provides CRM technology that connects companies and customers. One of its offerings includes Agentforce which is an agentic layer of the salesforce platform. It also offers Slack, which is a workplace communication and productivity platform; and Tableau, which is an end-to-end analytics solution for enterprise use cases and intelligent analytics.
On March 26, Kirk Materne from Evercore ISI reiterated a Buy rating on the company with a $420 price target. This sentiment comes from Salesforce Inc.’s (NYSE:CRM) strong growth, which is fueled by its unified platform. This includes the Customer 360 platform, Data Cloud, and Agentforce AI product line, which together integrate CRM applications, data management, and AI-powered automation. Agentforce was able to acquire 3,000 paying customers in just 90 days.
Agentforce essentially integrates AI agents into core applications and automates customer service inquiries, sales processes, and other workflows. Data Cloud acts as the foundation for Agentforce and provides the data needed for AI-powered automation. It exceeded 50 trillion records and doubled year-over-year in FQ4 2025. The company’s FQ4 revenue increased by 8% year-over-year. Data Cloud and AI ARR surged by 120%. The company now projects FY26 revenue to increase by 7% to 8% growth.
Parnassus Growth Equity Fund stated the following regarding Salesforce, Inc. (NYSE:CRM) in its Q4 2024 investor letter:
“Salesforce, Inc. (NYSE:CRM) reported third-quarter results that exceeded analysts’ expectations, as the integration of AI technology across the customer relationship management software company’s product offerings has driven robust growth in new deals.”
8. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 166
Apple Inc. (NASDAQ:AAPL) designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories. Its popular products include the iPhone, Mac, and iPad lines. It’s also known for its AirPods, Apple TV, Apple Watch, Beats products, and HomePod. The company provides AppleCare support and cloud services; and operates platforms like the App Store.
In the December quarter, the company’s Services segment made record revenue of $26.3 billion, which marked a 14% year-over-year increase. The company generated around $100 billion in services revenue in the past year. This growth was driven by an installed base of active devices which reached a record of more than 2.35 billion. The company has also seen all-time highs in transacting and paid accounts because of improved customer engagement. Notably, paid subscriptions have exceeded 1 billion.
The offerings in this segment include a range of categories, such as entertainment, productivity, and financial services. Apple TV+ is one instance, which attracts viewers through its original content. Another example includes the Find My services, which can help track luggage among other things. On March 25, UBS affirmed a Neutral rating on the company with a $236 price target.
The stock has been facing pressure due to the lack of an AI-driven iPhone upgrade cycle. However, Columbia Seligman Global Technology Fund is optimistic about the company due to iPhone 17’s AI potential. It stated the following regarding Apple Inc. (NASDAQ:AAPL) in its Q4 2024 investor letter:
“The fund maintained a position in Apple Inc. (NASDAQ:AAPL) throughout the quarter through the release of the company’s new iPhone 16 in September. Company leaders were excited about the release of the new model, as this is the first model that will feature enhanced AI capabilities through the Apple Intelligence features. Sales for the first few weeks in October and November trailed behind year over year sales from the iPhone 15, as availability of Apple Intelligence was not compatible with all iPhone models. Apple announced a partnership with OpenAI that has allowed the integration of ChatGPT into the Apple ecosystem, separate from the core Apple Intelligence features. This partnership highlights continued progress from Apple to introduce AI capabilities into its products and we expect the iPhone 17 to have even more expansive AI capabilities, increasing potential demand for the new model that is on track to be released in 2025.”
7. Visa Inc. (NYSE:V)
Number of Hedge Fund Holders: 181
Visa Inc. (NYSE:V) is an international payment technology company. It operates VisaNet, which is a transaction processing network for authorizing, clearing, and settling payment transactions. It also offers credit, debit, and prepaid card products, along with Visa Direct, Visa B2B Connect, Visa Cross-Border Solution, and Visa DPS. It serves merchants, financial institutions, and government entities.
The company also increased its volume by 6% year-over-year in the commercial payments sector. Visa Inc. (NYSE:V) works by targeting specific verticals, such as food and grocery delivery, and travel and entertainment. This has resulted in partnerships with DoorDash, iFood Pago, mySofie, and Airwallex. By developing innovative solutions and forming partnerships, the company drives growth in this evolving market.
Its New Flows segment includes Visa Direct and commercial payment solutions and had its revenue surge by 19% year-over-year in FQ1 2025. Visa Direct processed more than 10 billion transactions in the past 12 months. 3 billion of these transactions occurred in FQ1 alone. The company is growing Visa Direct by pursuing partnerships with issuers and fintechs. Some instances of such collaborations include the ones with X Money, OnePay, Banco Pichincha in Ecuador, Libra Internet Bank, and OCBC.
Meridian Hedged Equity Fund stated the following regarding Visa Inc. (NYSE:V) in its Q4 2024 investor letter:
“Visa Inc. (NYSE:V) is the world’s largest retail electronic payments network. We hold Visa in the portfolio because of its formidable competitive moat, built on network effects spanning billions of cards and millions of merchants globally. The company continues to benefit from the secular shift toward electronic payments while expanding its portfolio to include high-growth adjacent offerings. While U.S. market penetration is mature, international markets—particularly in emerging economies, where cash usage remains prevalent— offer significant growth opportunities. Visa’s operating model demonstrates strong leverage, with incremental revenue efficiently flowing to the bottom line. This quarter, Visa outperformed expectations across key metrics, with payment volumes and transaction growth proving resilient despite macro uncertainties. Looking ahead, we anticipate continued momentum into fiscal 2025, driven by the ongoing transition to digital payments, international expansion, and the scaling of newer business lines.”
6. Taiwan Semiconductor Manufacturing Company Ltd. (NYSE:TSM)
Number of Hedge Fund Holders: 186
Taiwan Semiconductor Manufacturing Company Ltd. (NYSE:TSM) is a tech company that manufactures, packages, tests, and sells integrated circuits and other semiconductor devices globally. It provides various wafer fabrication processes. It also offers customer & engineering support services, invests in tech start-up companies, and provides investment services. Its products are used in HPC, smartphones, IoT, automotive, and digital consumer electronics.
The company’s HPC segment made up 51% of its total revenue in 2024 after showcasing a 58% year-over-year revenue increase which was driven by AI-related applications. Revenue from AI accelerators contributed mid-teens percentage to this total revenue for the year. These accelerators include AI GPUs, AI ASICs, and HBM controllers. The company is investing in advanced process technologies, such as 3-nanometer and 2-nanometer, which are needed to develop high-performance AI chips. It’s also developing A16 technology with Super Power Rail (SPR) for specialized HPC products.
Taiwan Semiconductor Manufacturing Company Ltd. (NYSE:TSM) forecasts that revenue growth from AI accelerators will reach a mid-40% CAGR for five years starting from 2024. The company’s capital expenditures for 2025 are expected to be between $38 and $42 billion. On March 4, TD Cowen’s Krish Sankar reiterated a Hold rating on the company with a $215 target. Sankar views the company’s recent $100 billion US investment as low-risk but at the same time acknowledges the timeline uncertainty.
Seeing the potential in its AI chip demand, Sands Capital Technology Innovators Fund stated the following regarding Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its Q4 2024 investor letter:
“Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) third-quarter 2024 results and guidance showcased strong continued demand for artificial intelligence (AI) chips. Revenue increased by 29 percent, and earnings saw a 54 percent rise year-over-year. Gross margins were at their highest since 2022, bolstered by price hikes and record utilization at both the 3 nanometer (nm) and 5nm nodes. TSMC’s full-year revenue outlook was revised upward from 25 percent to 30 percent growth. The company also anticipates higher capital expenditure in 2025, a leading indicator for revenue.
Meanwhile, TSMC’s competitive position within the leading-edge chip fabrication industry has improved. The company noted that demand for its next-generation 2nm (N2) node is considerably higher than for its predecessor, N3. Additionally, TSMC has more capacity for N2 than N3. This situation contrasts with Intel and Samsung, which both recently disclosed struggles in ramping up their leading-edge nodes. Together, Intel and Samsung account for approximately $25 billion of foundry revenue, which could potentially migrate to TSMC over time…” (Click here to read the full text)
5. NVIDIA Corp. (NASDAQ:NVDA)
Number of Hedge Fund Holders: 223
NVIDIA Corp. (NASDAQ:NVDA) is a computing infrastructure company. Its Compute & Networking segment comprises Data Center computing platforms and end-to-end networking platforms. The Graphics segment offers various GPUs for gaming, PCs, enterprise workstation graphics, cloud-based visual & virtual computing, infotainment systems, and others.
The company’s Data Center segment generated a record $35.6 billion in FQ4 2025 revenue which marked a 93% year-over-year rise. For the entire FY25, the revenue doubled as compared to the year-ago period due to the surging demand for AI infrastructure. The adoption of the company’s Blackwell architecture drove this growth. In FQ4 alone, Blackwell’s sales reached $11 billion and marked the fastest product ramp in the company’s history. It delivers up to 25x higher token throughput and 20x lower cost than the Hopper 100 for reasoning AI.
On March 28, Bank of America reiterated a Buy rating with a $200 price target for the company due to its optimism about NVIDIA Corp. (NASDAQ:NVDA) despite the new US AI Diffusion Rules that impact AI chip distribution. Large cloud service providers (CSPs) like Azure, GCP, AWS, and OCI are deploying Blackwell systems to meet the growing demand for AI infrastructure. Consumer internet companies such as Meta are using its GPUs for GenAI and deep learning applications.
Guinness Global Innovators is highly bullish on NVIDIA Corp. (NASDAQ:NVDA) due to its dominant AI chip market position. It stated the following in its Q4 2024 investor letter:
“For a second year running, NVIDIA Corporation (NASDAQ:NVDA) was the Fund’s top performing stock, delivering a stellar return of +177.7% over the year. Since the beginning of last year, Nvidia’s ‘Hopper’ GPUs have been at the centre of exploding demand for chips powerful and efficient enough to facilitate the energy intensive requirements of AI processes within datacentres. Initially possessing over 95% of market share in these types of chips, Nvidia have been quick to entrench their position as the technological leader in the space, launching the successor to the current ‘Hopper’ GPU in March, Blackwell, inhibiting the likes of AMD and Intel making meaningful inroads in taking share of the fast-growing market. Compared to the previous iteration (Hopper) which is continuing to fuel Nvidia’s extreme revenue growth, the Blackwell chip is twice as powerful for training AI models and has 5 times the capability when it comes to “inference” (the speed at which AI models respond to queries). Throughout the year, Nvidia’s financial performance has remained resilient. Quarterly revenues hit $35.1 billion in their most recent quarter, beating consensus expectations by 6% and representing a +94% year-over-year increase. Additionally, Nvidia’s data centre segment, driven by the Hopper (H100) chip, grew fivefold over the past year, underscoring the sustained demand for advanced AI infrastructure. The H100 chip, priced at around $40,000, continues to see significant adoption due to its ability to enhance AI model training efficiency while lowering overall costs. This growth is expected to continue as companies invest in upgrading existing data centres and building new ones, with Nvidia well-positioned to capture a significant share of the estimated $2 trillion market opportunity over the next five years. There have been some concerns over Blackwell production delays causing share price volatility however, Nvidia has recovered swiftly, driven by positive earnings results through the year and assurances from management regarding future supply. Additionally, the release of the H200 chip promises to extend Nvidia’s technological leadership, ensuring continued momentum into 2025. While Nvidia’s valuation remains a topic of debate, the stock is not at a significant premium to history, and it still appears reasonable given its dominant market position, innovative prowess, and exposure to long-term secular growth trends in AI, cloud computing, and data infrastructure. As a result, Nvidia remains well-positioned to deliver sustained outperformance over the long term, making it a cornerstone of growth-oriented portfolios.”
4. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 234
Alphabet Inc. (NASDAQ:GOOGL) operates through Google Services, Google Cloud, and Other Bets segments. The Google Services segment provides products and services like Chrome, Gmail, and YouTube. The Google Cloud segment offers AI infrastructure, Vertex AI platform, cybersecurity, data and analytics, and other services. The Other Bets segment sells healthcare-related and internet services.
The adoption of Google Cloud Platform (GCP) products, together with the increasing demand for AI infrastructure and GenAI solutions, drove the company’s Cloud segment to improve its revenue by 30% year-over-year in Q4 2024. GCP was recently able to outpace the entire cloud market. The company’s 6th-gen TPU called Trillium improves performance in AI workloads significantly. Vertex AI, which is the company’s AI developer platform, increased its customers by 5x year-over-year. The AI Hypercomputer is also contributing through leading performance and cost efficiency for both GPUs and TPUs.
On March 19, Roth MKM reiterated a Buy rating on the company with a $220 price target. This sentiment was a result of the company’s recent $32 billion Wiz acquisition, which is the largest one in Alphabet Inc.’s (NASDAQ:GOOGL) history. Through this acquisition, the company will be able to offer enhanced cloud security and threat detection data across cloud environments.
Oakmark Equity and Income Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOGL) in its Q4 2024 investor letter:
“Alphabet Inc. (NASDAQ:GOOGL) was the top contributor during the quarter. Despite ongoing litigation with the Department of Justice in its antitrust case, the U.S.-headquartered interactive media and services company’s stock price rose after posting solid third-quarter earnings. In the Search division, the company generated low-teens year-over-year revenue growth and management highlighted that they’re seeing strong user engagement with their new AI Overviews feature. The biggest upside surprise came from the Cloud division, where revenue growth accelerated to 35% and margins reached a record of 17%. This performance was driven by client demand for AI Infrastructure and Generative AI Solutions as well as core Google Cloud Platform (GCP) products. We continue to believe Alphabet is a collection of great businesses that can unlock further value over the long term through its world-class AI capabilities.”
3. Meta Platforms Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 262
Meta Platforms Inc. (NASDAQ:META) develops products that enable people to connect and share with friends and family. It operates through two segments: Family of Apps (FoA), which includes Facebook and Instagram among other apps; and Reality Labs (RL) which provides virtual, augmented, and mixed reality-related products through consumer hardware and software.
In Q4 2024, the company’s FoA generated $47.3 billion in revenue which was up 21% year-over-year due to advertising. Advertising alone made $46.8 billion and increased by 21% year-over-year. Over 3.3 billion people use at least one of the company’s apps daily. The online commerce vertical majorly contributed to the year-over-year ad revenue growth. The company is integrating its AI assistant called Meta AI across FoA, which now reaches more than 700 million monthly active users.
Meta Platforms Inc. (NASDAQ:META) also uses AI to enhance ad ranking and targeting through Advantage+ to improve monetization efficiency. The company’s investments in these areas are expected to contribute to continued revenue growth in 2025 and beyond. On March 28, Evercore ISI maintained a Buy rating on Meta Platforms Inc. (NASDAQ:META).
Nightview Capital highlighted the company’s strong growth potential, due to its AI leadership with Llama model, advertising ecosystem, and AR capabilities. It stated the following regarding Meta Platforms Inc. (NASDAQ:META) in its Q4 2024 investor letter:
“Core Opportunity: Meta Platforms, Inc.’s (NASDAQ:META) platforms—Instagram, Facebook, WhatsApp, and Messenger—reach nearly half the world’s population daily, making it one of the most powerful advertising ecosystems globally. With investments in AI and augmented reality (AR), we believe Meta is also creating significant optionality for long-term growth.
Competitive Advantage: Thriving Core Platforms: In Q3, we saw Meta achieve a 23% YoY revenue growth,—a testament to strong user engagement across its ecosystem. The advertising landscape as a whole continues to evolve and we believe Meta’s existing platforms offer a defined advantage in this new world. Existing platforms in the age of AI continue to be the most powerful indicator of future success in our opinion.
AI Leadership: Meta’s AI capabilities and the Llama AI model are driving efficiency and product innovation. In our view, these assets have been under-appreciated by the market while enhancing Meta’s ability to further scale and innovate its leading advertising business…” (Click here to read the full text)
2. Microsoft Corp. (NASDAQ:MSFT)
Number of Hedge Fund Holders: 317
Microsoft Corp. (NASDAQ:MSFT) develops and supports global software, services, devices, and solutions. One of its business segments includes Productivity and Business Processes which offers Microsoft Teams, office 365 Security and Compliance, Microsoft 365 Copilot, and others. It also provides LinkedIn, on-premises ERP, and CRM applications.
The company’s Intelligent Cloud segment offers server products and cloud services. It’s primarily driven by Azure and achieved $25.5 billion in FQ2 2o25 revenue, which was up 19% year-over-year. This was fueled by the expanding AI services, which saw a 157% revenue increase. The AI business recorded an annual revenue run rate of $13 billion, which was up 175%. The company has more than doubled its data center capacity in the last 3 years, with the highest expansions made last year to ensure supporting the current cloud workloads and next-gen AI applications.
Azure AI Foundry, which is Microsoft Corp.’s (NASDAQ:MSFT) AI platform has 200,000+ monthly active users within just 2 months of its launch. It provides tools for AI development which includes support for OpenAI’s leading models and open-source models like DeepSeek’s R1. Similarly, Copilot Studio creates custom AI agents and has seen 160,000 organizations create 400,000 agents in just 3 months. Piper Sandler maintained an Overweight rating with a $520 price target on the company because they believe in its AI-driven cloud, productivity, and business offerings.
Columbia Seligman Global Technology Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q4 2024 investor letter, believing that Oracle is positioned to capitalize on the AI-driven cloud demand:
“Within software, the fund maintained an underweight position to Microsoft Corporation (NASDAQ:MSFT), which proved beneficial as share price for the company fell during the fourth quarter. Microsoft’s outlook for its Azure business came down slightly, which hampered the stock price at times during the quarter and, combined with losses on the Open AI business, led to a disappointing end to 2024. The company has guided its capital expenditure spending up slightly and investors continue to wait for additional monetization from the company’s large commitment to AI infrastructure spending. The fund continued to hold an overweight allocation to Oracle as we believe Oracle is positioned to be a major beneficiary of the AI rollout and has the potential to compete with other large cloud providers, such as Amazon, Alphabet and Microsoft. Oracle shares moved lower during the quarter and the stock suffered its worst day of the year in December, as the company narrowly underperformed analysts’ average estimates. Oracle’s business model remains strong as demand for computer power that can handle AI is increasing and the company’s revenues from its cloud infrastructure unit moved higher year over year.”
1. Amazon.com Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 339
Amazon.com Inc. (NASDAQ:AMZN) is a tech company that engages in the retail sale of consumer products, advertising, and subscription services through global online and physical stores. It operates through the North American, International, and Amazon Web Services (AWS) segments. AWS is a cloud computing platform. It also offers electronic devices like Kindle and produces media content.
JMP Securities analyst Nicholas Jones reiterated a Market Outperform rating with a $285 price target on the company. This sentiment was driven by its advertising strategies. Jones thinks that the company’s move into retail media advertising will attract more advertisers and increase the allocated budget for ads in retail media. The Q4 2024 revenue for the advertising business improved by 18% year-over-year.
A lot of this came from sponsored products. The company also expanded its full-funnel advertising capabilities. Advertisers can now engage customers at various stages of the buying process, from brand awareness to point-of-purchase. Amazon.com Inc. (NASDAQ:AMZN) is also using its vast data resources to offer differentiated audience features through Marketing Cloud to optimize campaigns.
Nightview Capital is bullish on the company and stated the following regarding Amazon.com Inc. (NASDAQ:AMZN) in its Q4 2024 investor letter:
“Artificial intelligence is no longer just a promise—it’s becoming the defining force of the modern economy. From self-driving vehicles to humanoid robotics, intelligent systems are not only enhancing efficiency but unlocking entirely new markets. These systems process and learn from vast amounts of real-world data, iterating and improving at a scale no human could achieve.
In our view, this isn’t just innovation; it’s exponential evolution. Companies leading the AI revolution are building formidable data moats, making it nearly impossible for latecomers to compete. Every mile driven by an autonomous vehicle, every task completed by an industrial robot—these actions feed a cycle of continuous improvement.
Amazon.com, Inc. (NASDAQ:AMZN): Core Opportunity: Amazon’s growth is anchored by three high-potential areas: retail margin expansion, a rapidly growing advertising business, and the continued growth and need for Amazon Web Services (AWS). Together, these pillars position Amazon for the next leg of growth and profitability.
Competitive Advantage: Retail Margin Expansion: With e-commerce still accounting for only 16% of retail sales in the United States (per the U.S. Census Bureau)—and even less globally—Amazon has significant room for growth. CEO Andy Jassy’s emphasis on AI-driven efficiencies, such as a possible 25% reduction in cost-to-serve, underscores the company’s ability to unlock new profitability in their now three-decade-old core business. More than a decade after the Kiva robotics acquisition, we see the potential for the next wave of automation to reduce variable cost per unit (VCPU) on the “pick and pack” and transportation side of the business as the decade progresses. Overall, we see EBIT margins expanding steadily throughout the next several years…” (Click here to read the full text)
While 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 time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. 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: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
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