5 Most Promising QQQ Stocks According to Hedge Funds

In this article, we will look at the 5 most promising QQQ stocks according to hedge funds. If you want to explore similar stocks, you can go to 15 Most Promising QQQ Stocks According to Hedge Funds.

5. Apple Inc. (NASDAQ:AAPL)

Number of Hedge Fund Holders: 135

On February 2, Apple Inc. (NASDAQ:AAPL) reported earnings for the first quarter of fiscal 2023. The company reported an EPS of $1.88 and generated a revenue of $117.15 billion. On February 14, KeyBanc analyst Brandon Nispel maintained his $177 price target and an Overweight rating on Apple Inc. (NASDAQ:AAPL).

At the end of Q4 2022, 135 hedge funds were eager on Apple Inc. (NASDAQ:AAPL) and disclosed positions worth $136.3 billion in the company. Of those, Berkshire Hathaway was the top shareholder in the company and held a position worth $116 billion. Apple Inc. (NASDAQ:AAPL) is one of the most promising QQQ stocks according to hedge funds.

Here is what Distillate Capital had to say about Apple Inc. (NASDAQ:AAPL) in its third-quarter 2022 investor letter:

“The largest new purchase was Apple Inc. (NASDAQ:AAPL), which after underperforming saw its valuation improve significantly. Over the course of the last year, Apple’s consensus estimated forward free cash flows rose modestly, while its enterprise value fell by around 30%. Apple ranks below the 25th most attractive name in the portfolio and so its weight is capped at 4% vs. 6% for names in the top quartile.”

4. Alphabet Inc. (NASDAQ:GOOG)

Number of Hedge Fund Holders: 152

Alphabet Inc. (NASDAQ:GOOG) is ranked fourth on our list of the most promising QQQ stocks according to hedge funds. Hedge funds have hefty stakes in both Alphabet Inc. (NASDAQ:GOOG) and Alphabet Inc. (NASDAQ:GOOGL). At the end of Q4 2022, 152 hedge funds were long Alphabet Inc. (NASDAQ:GOOG) and disclosed positions worth $17.6 billion.

On February 9, Morgan Stanley analyst Brian Nowak reiterated an Overweight rating and his $135 price target on Alphabet Inc. (NASDAQ:GOOG).

As of December 31, TCI Fund Management is the largest investor in Alphabet Inc. (NASDAQ:GOOG) and has disclosed a position worth $4.8 billion in the company.

Here is what Diamond Hill Capital had to say about Alphabet Inc. (NASDAQ:GOOG) in its Q4 2022 investor letter:

“Other bottom contributors included media and technology giant Alphabet Inc. (NASDAQ:GOOG), apparel and footwear company V.F. Corporation and utility operator Dominion Energy. We believe Alphabet’s shares underperformed on concerns of a weakening macroeconomic environment. The company also reported weaker-than-expected earnings and revenue for Q3 2022. Longer-term, we expect Alphabet’s search engine advertising, YouTube advertising and other initiatives to continue driving revenue growth. As such, we used the share price weakness this quarter to add to our position.”

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

Number of Hedge Fund Holders: 194

Wall Street is positive on Meta Platforms, Inc. (NASDAQ:META). On February 21, BofA reiterated its $220 price target and a Buy rating on Meta Platforms, Inc. (NASDAQ:META).

Meta Platforms, Inc. (NASDAQ:META) was held by 194 hedge funds at the end of Q4 2022. The total stakes of these hedge funds amounted to $15.5 billion, up from $14.15 billion in the previous quarter with 177 positions. The hedge fund sentiment for the stock is positive and Meta Platforms, Inc. (NASDAQ:META) is one of the most promising QQQ stocks according to hedge funds.

As of December 31, Eagle Capital Management is the top investor in Meta Platforms, Inc. (NASDAQ:META) and has a position worth $1 billion in the company.

Here is what Vulcan Value Partners  had to say about Meta Platforms, Inc. (NASDAQ:META) in its fourth-quarter 2022 investor letter:

“During the quarter we sold Meta Platforms, Inc. (NASDAQ:META) after owning the business for over four years. The fundamentals of our investment case were based on the tremendous number of users that spent time on its various properties and the advertising dollars that flowed to the company as a result. We believed its competitive advantage was that the platform was, more or less, a monopoly on people’s time and attention. The rise of TikTok and other emerging platforms has given us pause on the company’s ability to maximize that advantage. From our perspective, the idea of “one platform to rule them all” may now be a thing of the past as social offerings have become more fragmented.

In addition, though our research has indicated that much of the initial damage done from Apple’s iOS 14.5 privacy changes has been repaired, we remain concerned with Apple’s influence over the digital advertising ecosystem. Apple is one of the largest gatekeepers to Meta’s mobile services, and it has become more difficult for us to gauge the pace of change emerging from Apple relating to privacy, as well as evaluating Apple’s ambitions in advertising…” (Click here to read the full text)

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

Number of Hedge Fund Holders: 240

On February 2, Amazon.com, Inc. (NASDAQ:AMZN) posted earnings for the fourth quarter of fiscal 2022. The company reported an EPS of $0.03 and generated a revenue of $149.20 billion, up 8.58% year over year and ahead of Wall Street consensus by $3.43 billion. As of February 21, Amazon.com, Inc. (NASDAQ:AMZN) has gained 11.57% year to date.

On February 14, Loop Capital analyst Rob Sanderson reiterated his $140 price target and a Buy rating on Amazon.com, Inc. (NASDAQ:AMZN).

At the end of the fourth quarter of 2022, Amazon.com, Inc. (NASDAQ:AMZN) was held by 240 hedge funds. The total stakes of these hedge funds amounted to $27.5 billion. As of December 31, Harris Associates is the leading shareholder in the company and has a position worth $1.62 billion. Amazon.com, Inc. (NASDAQ:AMZN) is ranked second on our list of the most promising QQQ stocks according to hedge funds.

Here is what Diamond Hill Capital had to say about Amazon.com, Inc. (NASDAQ:AMZN) in its fourth-quarter 2022 investor letter:

“At Amazon.com, Inc. (NASDAQ:AMZN), recessionary and inflationary headwinds drove weaker demand and higher costs for its AWS (Amazon Web Services) and retail businesses. While overinvestment in the retail business during the pandemic and continued growth of investments in AWS could lead to near-term pressure on profitability, we believe Amazon’s competitive advantages will continue to grow and that the business has the potential to grow much faster than the overall economy in the coming years.”

1. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 259

Morgan Stanley is bullish on Microsoft Corporation (NASDAQ:MSFT). On February 13, Morgan Stanley analyst Keith Weiss maintained his $307 price target and an Overweight rating on Microsoft Corporation (NASDAQ:MSFT).

On January 24, Microsoft Corporation (NASDAQ:MSFT) posted earnings for the second quarter of fiscal 2023. The company’s revenue for the quarter was $52.75 billion, and the company reported an EPS of $2.32, outperforming EPS expectations by $0.01.

At the close of the fourth quarter of 2022, 259 hedge funds were long Microsoft Corporation (NASDAQ:MSFT) and held collective stakes worth $58.65 billion in the company. As of December 31, Bill & Melinda Gates Foundation Trust is the most prominent investor in the company and has a stake worth $9.41 billion. Microsoft Corporation (NASDAQ:MSFT) is the most promising QQQ stock according to hedge funds.

Here is what Polen Capital had to say about Microsoft Corporation (NASDAQ:MSFT) in its fourth-quarter 2022 investor letter:

“In the case of Microsoft Corporation (NASDAQ:MSFT), the company is performing very well. Azure now represents nearly 25% of the total business and continues to compound at a higher rate. Although growth is moderating a bit recently (as it is for AWS and Google Cloud Platform as well), these three platforms collectively generated more than $140 billion in revenue during the last 12 months and are still growing at a healthy rate. Further, Microsoft Cloud, or commercial cloud (which includes Azure and other cloud services, Office 365 Commercial, the commercial portion of LinkedIn, Dynamics 365, and other cloud properties) continues to grow roughly 30% and is now about half the business. Mathematically, commercial cloud could decelerate to 20% growth with all other segments decelerating to zero growth and total company revenue growth would still be at least double digits. We believe Microsoft is positioned to compound underlying earnings per share at a midteens rate over the next five years. At 22x earnings, we felt the valuation was attractive and that it should be a large position.”

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