5 Best FAANG Stocks To Invest In

In this article, we will be taking a look at the 5 best FAANG stocks to invest in. To read our detailed analysis of the tech industry, you can go directly to see the 11 Best FAANG Stocks To Invest In.

5. NVIDIA Corporation (NASDAQ:NVDA)

Number of Hedge Fund Holders: 180

NVIDIA Corporation (NASDAQ:NVDA) is a semiconductor company. It is based in Santa Clara, California.

An Overweight rating was maintained on NVIDIA Corporation (NASDAQ:NVDA) on February 7, alongside a $750 price target.

In total, 180 hedge funds were long NVIDIA Corporation (NASDAQ:NVDA) in the third quarter, with a total stake value of $29.6 billion.

Polen Capital mentioned NVIDIA Corporation (NASDAQ:NVDA) in its fourth-quarter 2023 investor letter:

“Apple and NVIDIA Corporation (NASDAQ:NVDA) alone drove over 1,100 basis points of the Russell 1000 Growth Index’s 42% return, so not owning them was a meaningful headwind to our relative return in 2023. NVIDIA shares rocketed higher by well over 200% in 2023 although they slightly underperformed our Portfolio and the Russell 1000 Growth in the fourth quarter. Generative AI has been a huge boon for NVIDIA as the use of LLMs like ChatGPT and others requires tremendous processing power that, today, is mostly provided by NVIDIA’s GPUs. All large cloud service providers, AI factories, and many large consumer internet companies are laying the foundation for generative AI by deploying NVIDIA GPUs and other parallel processing chips to be able to do large scale generative AI either for internal use (i.e., Meta) or as a service for others (i.e., AI factories) or both (cloud service providers such as Amazon, Microsoft, and Google).

Given many of NVIDIA’s customers or its end customers are still very much in the experimentation phase with generative AI, it is unclear how sustainable the current demand for GPUs truly is. At the same time, it is known that NVIDIA has historically been highly cyclical. By the end of 2024, we believe NVIDIA will already account for roughly half the market for datacenter chips, servers, and networking equipment, which is unprecedented. Even though the valuation at 25x forward earnings doesn’t look very demanding at first glance, it assumes NVIDIA will own virtually the entire datacenter chip market in just the next few years and will sustain year-on-year growth despite being a cyclical business that is currently experiencing much higher new peaks.

We believe NVIDIA is a highly advantaged business, but we also believe the long-term growth outcomes are currently too variable, and the expectations built into the company’s $1.2 trillion valuation as of this writing assume the most optimistic of those scenarios.”

4. Alphabet Inc. (NASDAQ:GOOGL)

Number of Hedge Fund Holders: 221

Alphabet Inc. (NASDAQ:GOOGL) is a big tech company operating the Google search engine, Google Cloud, Chrome, and Android, among more. It is based in Mountain View, California.

Wedbush analyst Scott Devitt holds an Outperform rating and a $160 price target on Alphabet Inc. (NASDAQ:GOOGL) as of January 31.

Alphabet Inc. (NASDAQ:GOOGL) had 221 hedge funds long its stock in the third quarter, with a total stake value of $26.2 billion.

Here’s what  First Pacific Advisors said about Alphabet Inc. (NASDAQ:GOOGL) in its fourth-quarter 2023 investor letter:

“Alphabet Inc. (NASDAQ:GOOG) continued going from strength to strength during 2023 despite concerns that competition may infringe on the company’s dominant position in Search. Thus far, Alphabet has continued to hold its own, and we look forward to seeing how the company incorporates further AI developments across the Alphabet ecosystem. Lastly, we are hopeful that the impending arrival of a new CFO will bring a renewed focus on efficiency – an area where we believe Alphabet has ample room for improvement.”

3. Meta Platforms, Inc. (NASDAQ:META)

Number of Hedge Fund Holders: 234

On February 5, Eric Sheridan at Goldman Sachs maintained a Buy rating and a $500 price target on Meta Platforms, Inc. (NASDAQ:META).

Meta Platforms, Inc. (NASDAQ:META), formerly known as Facebook, is another big tech name on our list and is among the original FAANG stocks. It is based in Menlo Park, California.

A total of 234 hedge funds held stakes in Meta Platforms, Inc. (NASDAQ:META) in the third quarter. Their total stake value was $35.2 billion.

 First Pacific Advisors said the following about Meta Platforms, Inc. (NASDAQ:META) in its fourth-quarter 2023 investor letter:

“Meta Platforms, Inc. (NASDAQ:META) saw a welcome recovery in engagement and revenue year-to-date following a tough 2022. The company has continued to offer new solutions that allow advertisers to target customers effectively and efficiently via one of the world’s leading digital platforms. Moreover, operating profits are rising due to an organization-wide focus on improving productivity and accelerating the time to market for new products. However, overall profitability continues to be weighed down by losses in the Reality Labs segment. But, there is positive optionality that Meta will emerge from the AI arms race as one of the leading players in the industry.”

2. Amazon.com, Inc. (NASDAQ:AMZN)

Number of Hedge Fund Holders: 286

We saw 286 hedge funds long Amazon.com, Inc. (NASDAQ:AMZN) in the third quarter, with a total stake value of $38.9 billion.

Amazon.com, Inc. (NASDAQ:AMZN) is a broad-line retail company based in Seattle, Washington. It owns and operates a cloud computing business by the name of Amazon Web Services as well.

Mark Mahaney at Evercore ISI Group holds an Outperform rating and a $220 price target on Amazon.com, Inc. (NASDAQ:AMZN) as of February 2.

1. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 306

Rishi Jaluria at RBC Capital holds an Outperform rating and a $450 price target on Microsoft Corporation (NASDAQ:MSFT) as of January 31.

There were 306 hedge funds long Microsoft Corporation (NASDAQ:MSFT) in the third quarter, with a total stake value of $72.2 billion.

Microsoft Corporation (NASDAQ:MSFT) is a systems software company. It is based in Redmond, Washington.

Madison Investments mentioned Microsoft Corporation (NASDAQ:MSFT) in its fourth-quarter 2023 investor letter:

“Microsoft Corporation’s (NASDAQ:MSFT) sustainable scorecard was updated with an unchanged rating of Above Average. The company’s board has an official Environmental, Social, and Public Policy Committee in addition to the traditional Audit, Compensation, and Governance committees. For ten years, Microsoft has publicly released data measuring the diversity of its workforce. With the prominence of Artificial Intelligence (AI), the company has launched a 5-point blueprint for governing AI to address public policy and regulation. Environmentally, Microsoft has multiple programs to be carbon negative by 2030. The company has signed Purchase Power Agreements for carbon-free energy totaling 13.5 Gigawatts.”

See also 10 Best Long-Term Tech Stocks To Buy and 12 Best Tech Stocks To Buy According to Billionaire Ken Griffin.