On December 12, President-elect Donald Trump rang the opening bell at the New York Stock Exchange, an event rich with symbolism for his pro-business economic agenda and his commitment to revitalize the US economy. During the event, Trump reiterated his promises to lower the corporate tax rate from 21% to 15% for companies that manufacture in the US. He also mentioned plans to reduce taxes on capital gains and dividends, a move designed to attract investor support and drive market growth. Addressing the crowd at the NYSE, Trump emphasized the importance of his economic policies in creating jobs and strengthening the economy. He said that the stock market’s performance is the barometer of his economic success and promised that the country’s economy would be very strong under his administration. Investors have responded positively to Trump’s election, with the S&P 500 experiencing gains since his victory. His plans for tax cuts and deregulation have been welcomed by Wall Street and business leaders.
In an interview with Bloomberg on December 13, Mike Wilson, Chief US Equity Strategist at Morgan Stanley, discussed his outlook for the stock market and the economy. Wilson noted that the market has traded well over the past few months due to favorable developments, including a definitive election outcome, the Federal Reserve’s monetary policy adjustments, and steady economic growth without a hard landing. He mentioned that Morgan Stanley’s target for the S&P 500 to reach 6,100 by the end of 2024 has been met and revealed the updated projection for the S&P 500, forecasting it to reach 6,500 by the end of 2025. This outlook is based on the base assumption of stable economic growth, softening inflation, and the Fed gradually cutting interest rates.
However, Wilson cautioned that there is a potential for inflation to reaccelerate, which could limit the Fed’s ability to cut rates. He acknowledged that financial conditions have loosened significantly, driven by improved market sentiment following the election. Wilson described 2025 as likely to be another volatile year for markets, similar to 2024. He anticipates heightened uncertainty in the first half of the year, with clarity potentially emerging in the second half.
Wilson’s overall view is that the economy is still late-cycle and his team is narrow and focusing on large-cap quality stocks rather than small-caps or low-quality stocks. This approach is based on the belief that in a late-cycle economy with high rates, smaller and lower-quality companies are more vulnerable and less likely to outperform.
Favorable developments have brought a sense of optimism to the financial markets. While there are still some risks, like potential inflation, investors are optimistic about the future, especially about large-cap companies. With that in context, let’s take a look at the 12 stocks most held by hedge funds.
An investor in a suit representing the company, seated in front of a long table of global leaders discussing the company’s investments.
Our Methodology
To compile our list of the 12 most promising gold stocks according to hedge funds. We scanned Insider Monkey’s Hedge Fund database to rank 12 stocks according to the largest number of hedge fund holders, as of Q3 2024. The list is sorted in ascending order of hedge fund sentiment.
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 Stocks Most Held by Hedge Funds
12. Adobe Inc. (NASDAQ:ADBE)
Number of Hedge Fund Investors: 123
Adobe Inc. (NASDAQ:ADBE) is a leading global software company that specializes in digital media and digital marketing solutions. With a rich history of innovation, Adobe Inc. (NASDAQ:ADBE) has become synonymous with creative tools, document management, and customer experience management. The company’s flagship products, including Creative Cloud, Document Cloud, and Experience Cloud, serve millions of users and businesses worldwide.
Adobe Inc. (NASDAQ:ADBE) is heavily investing in artificial intelligence (AI) to drive innovation and enhance its product offerings. The company has introduced a comprehensive suite of generative AI models under the Adobe Firefly family and has integrated Firefly across its flagship applications, such as Photoshop, Premiere Pro, and Lightroom. Additionally, the company has launched Firefly Video Model in Premiere Pro which has generated substantial interest with a 70% increase in beta users since its introduction. Adobe Inc. (NASDAQ:ADBE) is also introducing a new higher-priced Firefly offering that includes video models.
Adobe Inc. (NASDAQ:ADBE) is revolutionizing the content supply chain for enterprises through its innovative platform, Adobe GenStudio, a generative AI-powered application for creating and delivering high-performing, cross-channel content. This platform seamlessly integrates multiple Adobe applications and enables agencies and enterprises to achieve new heights of creativity and efficiency in content creation. Adobe Inc. (NASDAQ:ADBE) is expanding its GenStudio portfolio with the introduction of GenStudio for Performance Marketing. This addition provides a comprehensive solution for creating paid social ads, display ads, banners, and marketing emails using pre-approved, on-brand content. Adobe Inc. (NASDAQ:ADBE) is also focusing on expanding its freemium offerings, including Express, Lightroom, and Acrobat on web and mobile, to attract new users and convert them into paying customers.
11. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Investors: 128
Broadcom Inc. (NASDAQ:AVGO) is a leading global technology company that designs, develops, and supplies a broad range of semiconductor and infrastructure software solutions. The company’s portfolio spans a wide array of products, including networking, server storage, wireless, and broadband semiconductors, as well as infrastructure software solutions for data center virtualization and enterprise security.
Broadcom Inc. (NASDAQ:AVGO) has been at the forefront of the artificial intelligence (AI) revolution, leveraging its expertise in custom AI accelerators (XPUs) and networking to capture significant market opportunities. In 2024, which ended on September 30, the company’s AI revenue grew by 220% to $12.2 billion. This growth has been driven by increased shipments to hyperscale customers and the development of next-generation XPUs in 3-nanometer technology. This strong momentum is expected to continue, with management projecting a Serviceable Addressable Market for AI XPUs and networking to be in the range of $60 billion to $90 billion in fiscal year 2027 alone.
This projection is based on the company’s major AI application-specific integrated circuit (ASIC) customers including Google, Meta Platforms, and Amazon. Analysts from leading firms such as Jefferies, Morgan Stanley, and Evercore ISI have all expressed strong bullish sentiment on Broadcom Inc. (NASDAQ:AVGO) and have raised their price targets. On December 13, Evercore ISI analyst Mark Lipacis reiterated their bullish stance on Broadcom Inc.’s (NASDAQ:AVGO) stock, giving a Buy rating with a new price target of $250.
