In this article, we will be taking a look at the 13 best big tech stocks to buy now.
The State of Big Tech Right Now
Big tech has long been an immensely popular area to invest in when it comes to US stocks, and for good reason. Tech stocks, particularly those investing in AI and offering AI products, have been generating immense returns in 2024, with the second week of September bearing witness to their immense potential. This week, the S&P 500 and the Nasdaq Composite posted their best returns for the entire year, and many tech stocks were part of the faction that made this possible. As a result, there’s a huge rise in the popularity of AI and tech stocks. This is in stark contrast to market opinions on AI stocks, particularly during the first week of September, when many were very concerned that we are in an AI hypecycle that is bound to wind down soon.
Altimeter Capital’s CEO, Brad Gerstner, recently joined CNBC’s “Closing Bell” to discuss trends shaping big tech right now. He noted that the pace of AI at present is faster than any other tech development seen before. He also added that many investors are starting to lean back into big tech ahead of the election. This development may be coming about because of the historical trend that suggests that stocks perform better in the months directly following a US election – in which case, it makes sense for investors to be piling into big tech and AI right now since that’s a sure shot way to profit in the next few months.
How Is Big Tech Impacting Other Sectors?
A recent notable trend that people have begun to see because of the rise of big tech companies and the growing use of AI is a greater demand for power. Many major tech companies are beginning to require more energy, with the AWS-owner going as far as buying a nuclear-powered data center for $650 million recently.
The primary driving force for this rising demand is the need to develop AI. Many energy-conscious investors may see this new trend as a red flag for big tech. However, Jensen Huang has noted that while AI takes a ton of energy to train, once developed and trained, it will also help save energy. He particularly noted that AI is going to become so advanced through this development that it will eventually end up offering solutions that can change the way we use energy, making our operations endlessly more energy efficient.
With this in mind, big tech seems to be quite an interesting space to follow right now, especially in the days leading up to the US Presidential Elections. As such, we’ve compiled a list of the best big tech stocks to buy right now.
A wide view of an Apple store, showing the range of products the company offers.
Our Methodology
For our list below, we selected big-tech stocks with the highest numbers of hedge funds holding stakes in them during the second quarter and then ranked them based on this metric in ascending order.
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 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
Best Big Tech Stocks To Buy Now
13. Netflix, Inc. (NASDAQ:NFLX)
Number of Hedge Fund Holders: 103
Netflix, Inc. (NASDAQ:NFLX) is the company that owns and operates the popular streaming platform by the same name. It is based in Los Gatos, California.
This stock has been among the best-performing stocks in the past two decades, primarily because it has revolutionized the entertainment industry by spearheading the development and growth of online streaming. Netflix, Inc. (NASDAQ:NFLX) has an immense subscriber base that is rapidly growing every day, allowing the company to rake in higher revenue every quarter. In the first six months of 2024 alone, Netflix, Inc. (NASDAQ:NFLX) managed to add 17.4 million net new customers, bringing its total subscriber count to 277.7 million across 190 countries.
Considering these staggering figures, the company’s 12-month revenue of $36.3 billion as of this July is not surprising. This cash flow is what allows Netflix, Inc. (NASDAQ:NFLX) to continue spending on content for its customers, in which area it is outperforming its competitors in the streaming space. Netflix, Inc. (NASDAQ:NFLX) is also expected to generate about $6 billion in free cash flow this year, which will only enable the company to retain its position in the market as a leader in streaming services.
We saw 103 hedge funds long Netflix, Inc. (NASDAQ:NFLX) in the second quarter, with a total stake value of $11.9 billion. Fisher Asset Management was the largest shareholder, holding 4,357,952 shares.
12. Adobe Inc. (NASDAQ:ADBE)
Number of Hedge Fund Holders: 107
Adobe Inc. (NASDAQ:ADBE) is an application software company based in San Jose, California. It offers content-creation products and services, such as Document Cloud, a document services platform, Adobe Photoshop, and Creative Cloud, a service that allows members to access its creativity products.
In the third quarter, Adobe Inc. (NASDAQ:ADBE) saw revenue of $5.41 billion, up 11% year-over-year, and generated $2 billion in cash flows from operations. Revenue growth is a metric that the company has been impressing investors on, since over the past four years, revenue has grown at a CAGR of 15.26%. A huge part of Adobe Inc.’s (NASDAQ:ADBE) growth comes from AI integration across its products since AI-driven enhancements in products like Adobe Firefly have increased customer engagement and retention across Creative Cloud, Document Cloud, and Experience Cloud.
Looking at Document Cloud’s sales of $807 million for the third quarter alone is enough to see the impact of AI on Adobe Inc. (NASDAQ:ADBE) operations since this sales figure has risen by 18% year-over-year. Despite these stellar results, Adobe Inc. (NASDAQ:ADBE) did not perform all that well after the announcement of its results. The primary reason for this is that the company’s near-term outlook disappointed investors. For the fiscal fourth quarter, Adobe Inc. (NASDAQ:ADBE) expects sales of $5.5-$5.55 billion and non-GAAP EPS of $4.36-$4.68, while analyst estimates were for $5.61 billion in sales and $4.67 in EPS respectively.
Considering this disparity, many are wondering whether Adobe Inc. (NASDAQ:ADBE) is really gaining as much traction as they hoped it would from its AI-power software. However, this alone is not enough to write off the stock as a bad investment. Adobe Inc. (NASDAQ:ADBE) continues to be a strong business software player, and generative AI is only cementing this position. Also, despite the somewhat disappointing guidance, the company’s top line is still expected to grow by 20% in fiscal 2024, making this stock one of the best big tech players out there.
There were 107 hedge funds long Adobe Inc. (NASDAQ:ADBE) in the second quarter, with a total stake value of $11.8 billion. Fisher Asset Management was the most prominent shareholder, holding 4,766,441 shares.
11. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 108
Advanced Micro Devices, Inc. (NASDAQ:AMD) is a semiconductor company that offers x86 microprocessors and GPUs. It is based in Santa Clara, California.
Advanced Micro Devices, Inc. (NASDAQ:AMD) is among the top semiconductor picks because it has been working to establish itself as a reasonable alternative to the pricy Nvidia. With the release of its AI GPU, the MI300, in 2023, Advanced Micro Devices, Inc. (NASDAQ:AMD) did manage to gain this reputation. The company has also been primarily benefiting from its AI business, which many investors take to mean that it has immense potential to keep growing.
However, those following Advanced Micro Devices, Inc. (NASDAQ:AMD) would be wise to keep in mind some of the challenges the company is facing. In the second quarter, its gaming and embedded segments struggled a bit since the gaming segment is cyclical and sees downturns between gaming console generations. The embedded segment has been working to high inventory levels, which have led to sales falling.
Because of these difficulties, Advanced Micro Devices, Inc. (NASDAQ:AMD) saw its second-quarter year-over-year revenue growth come in at only 9% – a small figure compared to market leader Nvidia with its triple-digit revenue growth. Despite this, Advanced Micro Devices, Inc.’s (NASDAQ:AMD) position as a robust runner-up in the AI chips space is enough to attract many investors who believe in the company’s potential to expand by taking market share from Nvidia.
In the second quarter, 108 hedge funds were long Advanced Micro Devices, Inc. (NASDAQ:AMD), with a total stake value of $10.3 billion. Fisher Asset Management was the largest shareholder, holding 23,151,197 shares.
Fred Alger Management mentioned Advanced Micro Devices, Inc. (NASDAQ:AMD) in its second-quarter 2024 investor letter:
“Advanced Micro Devices, Inc. (NASDAQ:AMD) is a major global supplier of PC microprocessors and graphics processors to computing original equipment manufacturers (OEMs). The company’s product range spans desktops, notebooks, servers, graphics, and embedded/semi-custom chips. AMD operates in a large addressable market, covering areas such as PCs, servers, high-end gaming, and deep learning. Additionally, AMD has introduced competitive AI technologies, including powerful accelerators poised to capture a share in a market worth several hundred billion dollars. During the quarter, the company reported fiscal first-quarter operating results that met analyst estimates, with strengths in data center GPUs and server CPUs offsetting weaknesses in their gaming and embedded businesses. Moreover, management raised their fiscal second-quarter revenue guidance, albeit slightly below consensus estimates, where they expected double digit growth in data center revenues, while projecting a decline in their gaming segment, driven by weaknesses in both desktop GPUs and Semi-Custom Systems-on-a-Chip (SoC). While weaker-than-expected near-term results weighed on shares during the quarter, we believe the company is positioning itself to potentially benefit from long-term growth in AI infrastructure spending. Specifically, the company continues to gain server CPU market share, which could potentially accelerate as traditional compute deployments begin to recover.”
10. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 117
Salesforce, Inc. (NYSE:CRM) is an information technology company based in San Francisco, California. It offers Customer Relationship Management technology.
Propelled by healthy growth, Salesforce, Inc. (NYSE:CRM) announced its revenue of $9.33 billion in the second quarter, up 8% year-over-year and exceeding analysts’ estimates by $100 million. Since the company is the leading provider of CRM services, it has an immense presence in this market and has been expanding its reach through big acquisitions for years. Despite this, Salesforce, Inc. (NYSE:CRM) is also ensuring that organic expansion is not put on the back burner for too long, so it has been authorizing share buybacks to boost EPS while also initiating a dividend.
The company does not expect generative AI to meaningfully boost its sales just yet since, for fiscal 2025, it forecasts revenue growth of only 8-9%. However, Salesforce, Inc. (NYSE:CRM) is still seeing expanding profit margins since in fiscal 2024, its operating margins have expanded to 30.5%, well above the 22.5% figure reported in fiscal 2023.
At the end of the second quarter, 117 hedge funds were long Salesforce, Inc. (NYSE:CRM), with a total stake value of $11.4 billion.
Mar Vista Investment Partners, LLC mentioned Salesforce, Inc. (NYSE:CRM) in its second-quarter 2024 investor letter:
“Salesforce, Inc.’s (NYSE:CRM) stock came under pressure in Q2 as the company modestly missed Street expectations for software bookings and reduced its FY2025 subscription revenue guidance to “around 10%” year-to-year growth from “greater than 10%.” We believe Salesforce is experiencing cyclical pressures as software demand across the industry is pressured at the margin. This has led to longer sales cycles; smaller deal sizes and budgets being allocated away from enterprise software to emerging areas like generative AI. We continue to believe that Salesforce will see a tailwind to demand from its generative AI offerings as many AI use cases are found in front office software like customer relationship management. This, coupled with Salesforce’s treasure trove of customer data, positions it well to exploit the evolution of next-generation AI offerings.”
9. Micron Technology, Inc. (NASDAQ:MU)
Number of Hedge Fund Holders: 120
Micron Technology, Inc. (NASDAQ:MU) is another semiconductor company on our list. It offers memory and storage tech, such as DRAM semiconductor devices, among others.
While Micron Technology, Inc. (NASDAQ:MU) has performed well in the fiscal third quarter of 2024 by generating revenue of $6.8 billion and operating cash flow of $2.5 billion, the stock is facing some challenges. Recently, it was hit by two price-target cuts from Raymond James and Exane BNP Paribas, both of which resulted in the stock decline during the second week of September.
Despite this, Micron Technology, Inc. (NASDAQ:MU) is still expected to benefit from industry tailwinds in smartphone, PC, and data center growth. The company has huge potential for growth, particularly because of robust AI demand that has propelled its sequential revenue growth to 17% and has allowed Micron Technology, Inc. (NASDAQ:MU) to gain market share in high-margin products such as High Bandwidth Memory.
Micron Technology, Inc. (NASDAQ:MU) was spotted in the 13F holdings of 120 hedge funds in the second quarter, with a total stake value of $5.2 billion.
8. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 130
Broadcom Inc. (NASDAQ:AVGO) is a semiconductor company based in Palo Alto, California. It provides digital and mixed-signal complementary metal oxide semiconductor-based devices.
Broadcom Inc. (NASDAQ:AVGO) has an incredibly diverse revenue stream, which sets it apart from competitors in the semiconductor space. The company offers AI networking solutions alongside wireless chips and accessories that are used in 5G-capable smartphones. It also offers optical components and solutions to companies operating in the industrial and automotive spaces. Through this diverse revenue stream, Broadcom Inc. (NASDAQ:AVGO) ensures high revenues every quarter.
For instance, in the fiscal third quarter of 2024, Broadcom Inc. (NASDAQ:AVGO) generated revenues of $13.1 billion, up 47% year-over-year and above the $12.9 billion consensus estimate. The company has also recently acquired VMware, which is expected to further aid in revenue growth in future quarters.
Since Broadcom Inc. (NASDAQ:AVGO) is an essential player in the custom AI processors space, many have gone as far as calling it the second-most important AI chip company after Nvidia. Because of this, analysts like those at JPMorgan estimate that the company could generate $150 billion in revenue for AI customers alone over the next four to five years. This figure is quite believable, seeing as many of Broadcom Inc.’s (NASDAQ:AVGO) customers are famous tech players like Alphabet, Meta, and OpenAI.
A total of 130 hedge funds were long Broadcom Inc. (NASDAQ:AVGO) in the second quarter, with a total stake value of $20.04 billion.
7. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 156
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is a semiconductor company based in Taiwan. It offers integrated circuits and other semiconductor devices.
The reason why Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is such a popular semiconductor stock pick is its position as a contract manufacturer of chips. Because of this position, the company is a partner to several notable semiconductor players, like Nvidia and Advanced Micro Devices. As a result, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is benefitting from the AI market boom that is propelling these companies to provide more chips in the US and internationally.
A customer for Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is Apple. This tech giant makes up about a quarter of Taiwan Semiconductor Manufacturing Company Limited’s (NYSE:TSM) sales in a year. With Apple investing in artificial intelligence now with the release of Apple Intelligence, TSMC may also begin to see its smartphone business pick up – this is a major tailwind for the stock.
Another tailwind propelling Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) to greater heights is its expected launch of a new chip design in 2025. This is the nanometer chip, which is a next-generation technology that is expected to overtake the market upon its release – particularly because of the energy efficiency the new design is introducing.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) was seen in the portfolios of 156 hedge funds in the second quarter, with a total stake value of $21.3 billion.
Ave Maria mentioned Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its second-quarter 2024 investor letter:
“Top contributors to performance included SharkNinja, Inc. and Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM). Taiwan Semiconductor Manufacturing Company Limited is the global leader in semiconductor foundry services, with a dominant market share position in advanced semiconductors. The company has significant pricing power and stands to benefit from secular “megatrends” (5G, high performance computing, AI, rising silicon content per device, etc.) due to its technological leadership.”
6. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 179
NVIDIA Corporation (NASDAQ:NVDA) is perhaps the most famous semiconductor company in the market right now. It is based in Santa Clara, California.
While the semiconductor sector has historically been highly cyclical, meaning that stocks like NVIDIA Corporation (NASDAQ:NVDA) tend to go through boom and bust cycles in line with the economy, this chip maker’s recent performance has been such that investors are confident in its ability to weather any storm. Over the past four quarters, NVIDIA Corporation (NASDAQ:NVDA) has posted record results, with profit margins expanding to over 60%.
The driving force behind these results is the fact that NVIDIA Corporation (NASDAQ:NVDA) products are seeing high demand from almost every cloud infrastructure company and AI start-up. Because of this demand, investors believe that NVIDIA Corporation (NASDAQ:NVDA) could continue to do well even in a recession. In fact, NVIDIA Corporation (NASDAQ:NVDA) is seeing so much demand that it’s struggling to meet the needs of those vying for its components – this then has become one of the biggest challenges for the company, with CEO Jensen Huang beginning to feel the pressure to deliver more Nvidia products to a growing number of customers.
In total, 179 hedge funds were long NVIDIA Corporation (NASDAQ:NVDA) in the second quarter, with a total stake value of $53.7 billion.
5. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 184
Apple Inc. (NASDAQ:AAPL) is an information technology company and the famed manufacturer of the iPhone. It is based in Cupertino, California.
This tech giant is by far the largest company in the world and has a reputation that transcends borders. The third quarter of fiscal 2024 was Apple Inc.’s (NASDAQ:AAPL) best quarter in quite some time, with revenue growth year-over-year from products like the iPad coming in at 24%. However, many are disillusioned by this company because, despite its reputation, its growth is lagging behind many competitors in the tech space, particularly in terms of sales.
The hefty price tags that accompany any Apple Inc. (NASDAQ:AAPL) product on the market may be the biggest reason why sales seem to be lagging. However, analysts expect the iPhone 16 to bring about a massive change because this new model actually gives users a reason to upgrade. With Apple Intelligence only being available on the latest iPhone models – the 15 and 16 series – now may be the time for Apple enthusiasts to trade up from older models.
Apple Intelligence introduces generative AI on the iOS user interface and marks the first major step Apple Inc. (NASDAQ:AAPL) has taken in the field of AI. This signals to investors that the iPhone maker may finally be catching up with other big tech stocks, a development that is expected to increase growth and profitability in the coming years.
Apple Inc. (NASDAQ:AAPL) had 184 hedge funds long its stock in the second quarter, with a total stake value of $124.2 billion.
4. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 216
Alphabet Inc. (NASDAQ:GOOGL) is another reputable big tech player on the market, more familiarly known as Google. It is based in Mountain View, California.
Google Search and Google Cloud are some of the top-performing segments operated by Alphabet Inc. (NASDAQ:GOOGL), with the former representing about 57% of the company’s revenue in the second quarter and the latter garnering analyst attention recently for becoming more profitable. However, many investors are more interested in Alphabet Inc. (NASDAQ:GOOGL) because it owns YouTube, a highly successful video platform.
In the second quarter, YouTube generated $8.7 billion in ad revenue alone, up 13% year-over-year. Google Cloud has also seen revenues soar by 29% to over $10 billion in the second quarter – showing the business’ fast pace of growth. In light of all this, the biggest challenge Alphabet Inc. (NASDAQ:GOOGL) seems to be facing is the recent antitrust case it lost against the US government, where the company was called a monopoly.
Many are concerned that Alphabet Inc. (NASDAQ:GOOGL) will be broken up as a result of this ruling. But realistically speaking, this doesn’t seem all that easy to accomplish when you’re dealing with a tech giant. Regardless of what happens in the aftermath, the individual successes of all of Alphabet Inc.’s (NASDAQ:GOOGL) business segments are enough to assure investors of the company’s success and further growth in the future.
We saw 216 hedge funds long Alphabet Inc. (NASDAQ:GOOGL) in the second quarter, with a total stake value of $35.3 billion.
Baron Funds mentioned Alphabet Inc. (NASDAQ:GOOGL) in its second-quarter 2024 investor letter:
“We also added to Alphabet Inc. (NASDAQ:GOOG). The company reported solid financial results with first quarter revenue growth of 15% year-over-year, driven by 14% growth in search, 21% growth in YouTube, and 28% growth in cloud (which accelerated from 26% growth in the fourth quarter). The company has also increased its cost discipline efforts, which drove operating margins to 31.6% (compared to 25% in the first quarter of 2023). With regards to GenAI, while we are cognizant of the potential risks to the dominance of search, we believe that on the range of outcomes, Alphabet remains well positioned through its massive user distribution (9 products with over 1 billion users each), long-standing AI research labs (DeepMind and Google Brain), top AI talent, a solid cloud computing division in Google Cloud, and deep pockets for investing in AI. During the quarter, Alphabet also held its annual I/O conference, where it provided an update on its efforts in AI including: Gemini is now used by 1.5 million developers; model quality is expanding rapidly (e.g., context window is now 2 million tokens of length); the new genomics model, Alphafold 3 can predict structures of molecules and potentially accelerate drug discovery; new TPU6 AI chips has shown a 4.7 times improvement in compute performance compared to the prior generation; and Gemini for workspace is showing early data on a 30% increase in user productivity. Alphabet also has real value in assets such as Waymo, which are not factored into valuation today (and are potentially included at a negative valuation as they currently generate losses, hurting EPS). We continue to believe that the current valuation of Alphabet presents an attractive risk/reward for long-term owners of the business and have therefore increased our position.”
3. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 219
Meta Platforms, Inc. (NASDAQ:META) is Mark Zuckerberg’s social media company that has gained immense fame over the past few decades. It is based in Menlo Park, California.
Since Meta Platforms, Inc. (NASDAQ:META) is a global leader in the internet economy, many investors are awed by the position it holds and the number of popular social media platforms it owns. Because of this, the company also has about 18% of the global market for digital advertising sales since its social media platforms enable it to generate huge amounts of ad revenue.
Another reason why Meta Platforms, Inc. (NASDAQ:META) is gaining investors is its focused approach to AI integration. This is one of the most aggressive companies when it comes to building a network infrastructure and computing power, and it has about $37-40 billion set aside to spend on AI just this year. Through AI spending, Meta Platforms, Inc. (NASDAQ:META) aims to enhance user experience on its platforms by adding greater functionality and boosting advertisers’ ability to target their audience.
With all this, some may be wary about Meta Platforms, Inc.’s (NASDAQ:META) intense spending habits. However, in the second quarter, the company announced a 38% operating margin and generated $10.9 billion in free cash flow. Meta Platforms, Inc. (NASDAQ:META) ended the quarter with a net cash position of $40 billion – so many investors’ concerns have been alleviated.
Meta Platforms, Inc. (NASDAQ:META) was spotted in the portfolios of 219 hedge funds in the second quarter, with a total stake value of $42.5 billion.
Rowan Street Capital mentioned Meta Platforms, Inc. (NASDAQ:META) in its second-quarter 2024 investor letter:
“We are pleased to report that Meta Platforms, Inc. (NASDAQ:META), our largest position in the fund, has delivered a remarkable performance, +450% since our November 2022 note. Our investment in Meta dates back to 2018, with an average cost basis of approximately $172 per share. Today, the stock trades around $535, reflecting a 3x return over the six-year holding period, equating to a 20% annualized return.
We would like to remind you that achieving these types of returns is never a straight path. From time to time, we might experience volatility — that’s simply part of the investment journey. In fact, wealth creation and volatility go hand in hand. There’s no escaping it; it’s the “price of admission” the market demands. If you take a look at the chart below, you’ll notice the drawdowns META stock has faced over the years, with 2022 standing out as a particularly challenging period, where the stock saw a 75% drop…” (Click here to read the full text)
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ:MSFT) is a systems software big tech giant. It is based in Redmond, Washington.
Over the past three years, Microsoft Corporation (NASDAQ:MSFT) has managed to almost triple its valuation – a feat that has landed the company in the $3 trillion club with Apple. The company also showed immense growth to investors in the fourth quarter of fiscal 2024, with revenue and operating income both rising by 15% year-over-year.
A big reason why Microsoft Corporation (NASDAQ:MSFT) is on investors’ radars right now is its plans to increase capital expenditures in cloud and AI infrastructure. In fiscal 2024, the company has spent $55.7 billion, with $19 billion being spent in the fourth quarter alone. Through this increased spending, investors believe Microsoft Corporation’s (NASDAQ:MSFT) Azure business will be able to stay on par with competitor Amazon Web Services. Azure currently holds 25% of the cloud computing market share, and AI is expected to increase this even further.
There were 279 hedge funds long Microsoft Corporation (NASDAQ:MSFT) in the second quarter, with a total stake value of $89.1 billion.
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 308
Amazon.com, Inc. (NASDAQ:AMZN) is a reputable big tech company operating in the e-commerce space. It is based in Seattle, Washington.
Amazon.com, Inc. (NASDAQ:AMZN) has been entering the generative AI space, which has created a lot of hype around the stock over the past two years. This hype also seems to have some substance since more and more customers are now using the company’s AI tools and finding value in them. The primary indicator of Amazon.com, Inc.’s (NASDAQ:AMZN) AI-driven growth can be seen in its Amazon Web Services business.
In the second quarter, AWS saw sales growth rise to 18.8% year-over-year. This business is also currently the leading cloud platform, with a 31% market share in cloud computing, well ahead of Microsoft’s Azure with its 25% share and Google Cloud with its 11% share. Additionally, Amazon.com, Inc. (NASDAQ:AMZN) has a lot more to look forward to outside of AI since it has been focusing on advertising for quite some time now, and ad revenues saw a 20% rise year-over-year in the second quarter.
In total, 308 hedge funds were long Amazon.com, Inc. (NASDAQ:AMZN), with a total stake value of $65.8 billion.
Hayden Capital mentioned Amazon.com, Inc. (NASDAQ:AMZN) in its second-quarter 2024 investor letter:
“Our portfolio is still recovering from the 2022 downturn, although we’ve made meaningful progress in the last two years. While that experience has taught us many lessons, that dislocation also provided a rich vein of opportunities that we continue to mine today
Some of our biggest winners in the last two years, have been “re-acceleration” stories. These are cases where once rapidly growing companies suddenly put the brakes on during a weak economy. There could be several reasons for this – customers pulling back during a recession, the company proactively curtailing growth spend as a precaution, needing to cut costs & right-size the business to become profitable quickly, or many other reasons.
But the commonality seems to be that as soon as growth stops, the market narrative turns suddenly from positive, to “this company is finished”. They go from being valued for many years of rapid growth, to being priced like a mature company that will never realize significant growth again. But often neither scenario is true, with the ultimate future path somewhere in between.
I find the fact this type of opportunity even exists, fascinating. Especially since it seems to happen every bear-market – perhaps indicating it’s embedded in human nature (and thus persistent & likely minable throughout one’s investing career). For example, I gave the examples of Amazon.com, Inc.’s (NASDAQ:AMZN) stock performance in our Q1 2022 letter (please re-read this piece for more context; LINK)…” (Click here to read the full text)
While AMZN is an exceptional investment, we believe that AI stocks hold promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than the ones mentioned in our list but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
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