In this article, we will take a look at the 5 most promising QQQ stocks according to hedge funds. To read our analysis of the recent trends, and market activity, you can go to the 16 Most Promising QQQ Stocks According to Hedge Funds.
5. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 180
NVIDIA Corporation (NASDAQ:NVDA) is a leading technology company focused on the design and manufacturing of accelerated computing hardware and software products. Its core businesses comprise of Gaming, Data Center, Professional Visualization, and Automotive, with Gaming and Data Center making up for more than 80% of its revenues.
Several analysts raised their firm’s respective price targets for NVIDIA Corp (NASDAQ:NVDA) shares following another strong quarterly performance with revenue surpassing consensus estimates by $2.0 billion (11%) in Q3 2023. Among the prominent firms covering the stock, Wells Fargo analyst Aaron Rakers holds the highest price target for the chipmaker at $675 with an ‘Overweight’ rating. The target price represents a potential upside of 37.40% based on the share price on December 18.
Hedge funds are bullish about NVIDIA Corporation (NASDAQ:NVDA) shares as the number of hedge funds that own its shares has increased from 106 in Q1 to 180 in Q3 2023. These hedge funds together held shares worth $29.6 billion according to Insider Monkey data.
4. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 221
Alphabet Inc. (NASDAQ:GOOGL), based in Mountain View, California, is the parent company of several companies including Google, Verily Life Sciences, GV (formerly Google Ventures), Calico, and X-the moonshot factory. Majority of its revenue is generated by Google Services which comprises of ads, Android, Chrome, hardware, Gmail, Google Drive, Google Maps, Google Photos, Google Play, Search, and YouTube.
On December 7, Roth MKM analyst Rohit Kulkarni raised the price target for Alphabet Inc. (NASDAQ:GOOGL) shares to $166 from $152 and maintained a ‘Buy’ rating. The target price represents a potential upside of 21.50% based on the share price on December 18.
This is what Wedgewood Partners, an investment management company, had to say about Alphabet Inc. (NASDAQ:GOOGL) in its Q3 2023 investor letter:
“Alphabet was a top contributor to performance as search revenues accelerated during their second quarter. This improved performance flies in the face of fears that demand for the Company’s advertising inventory and core search functionality would be diluted by the Company’s own generative-AI offerings and outside substitutes. Alphabet subsidiaries have been at the vanguard of artificial intelligence for more than a decade. The Company has spent almost $150 billion on research and development over just the past five years, and today over 80% of the Company’s advertising customers use an AI-enabled tool when they run their Google Search and YouTube campaigns. Thus, Alphabet is certainly not “behind the curve” in any way, shape, or form when it comes to AI. Quite the contrary, the Company has ample room to rationalize spending to drive better returns on investments and increase capital returns to shareholders at these relatively attractive forward earnings multiples.”
3. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 234
Menlo Park, California-based Meta Platforms, Inc. (NASDAQ:META) is a technology conglomerate formerly known as Facebook, Inc. Its businesses are reported under two segments: Family of Apps – comprising social media web and smartphone apps Facebook, Instagram, Messenger, and WhatsApp; and Reality Labs – comprising augmented and virtual reality products including hardware, software, and content.
Meta Platforms, Inc. (NASDAQ:META) has posted massive share price recovery and growth this year. Its shares were up nearly 191% year-to-date, as of December 18, the second best year-to-date performance on our list.
Following strong earnings in Q3 2023 headlined by normalized EPS of $4.39 surpassing consensus estimates by a whopping $0.79, Truist Securities analyst Robert Zeller raised the price target for Meta Platforms, Inc. (NASDAQ:META) shares to $405 from $390 and maintained a ‘Buy’ rating.
Meta Platforms, Inc. (NASDAQ:META) ranks #3 on our list of 16 most promising QQQ stocks according to hedge funds based on the number of hedge funds holding its shares as of September 30, 2023. The shares of the social media giant were owned by 234 hedge funds with a total value of $35.2 billion. Prominent hedge funds, such as Arrowstreet Capital, Tiger Global Management LLC, and GQG Partners, held the highest number of its shares among hedge funds.
2. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 286
Amazon.com, Inc. (NASDAQ:AMZN), is a multinational technology company operating online and physical stores where it sells its own products as well as allows third-party sellers to sell their products to consumers. It manufactures and sells electronic devices, including Kindle, Fire tablet, Fire TV, Echo, and Ring, and develops and produces media content; and provides cloud computing services through Amazon Web Services platform.
Hedge funds really like the shares of Amazon.com, Inc. (NASDAQ:AMZN) as 286 out of the 910 hedge funds tracked by Insider Monkey held its shares with a total value of $38.9 billion, as of Q3 2023. Even though the company generates most of its revenue from ecommerce, the cloud platform of the company, which has been growing at a remarkable pace, is touted to be a potential “gold mine” in the recent future.
In its Polen Global Growth Q3 investor letter, Polen Capital, an investment management firm, made the following comments about Amazon.com, Inc. (NASDAQ:AMZN):
“Amazon continues to showcase its place as one of the most competitively advantaged companies in the world. The company has made significant progress in managing costs and better leveraging existing capacity, driving a strong recovery in its profitability. We think there’s additional room for improvement. AWS growth seems to be stabilizing even while management continues to work with clients to optimize their infrastructure spend. Roughly 90% of global IT spending remains on premise. We believe this will eventually flip, with most IT spending ultimately moving to the cloud over time. We think AWS will be a significant beneficiary of this transition. [. . .] At Amazon’s current price, we believe the company is well positioned to deliver a mid-teens or higher total shareholder return for our clients over the next five plus years without a Herculean effort from the business. It simply needs to continue executing on current businesses and growing into the capacity it built during and immediately after the pandemic.”
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 306
Redmond, Washington-based Microsoft Corporation (NASDAQ:MSFT) is a leading technology company with products include operating systems, cross-device productivity applications, server applications, business solution applications, desktop and server management tools, software development tools, and video games.
Microsoft Corporation (NASDAQ:MSFT) is among the leaders in the AI race following its partnership with OpenAI, the creator of Chat GPT – an artificial intelligence powered chatbot. The company is using its AI capabilities to improve its existing products and services including Bing Search, Cloud, as well as its Office Suite.
In its Baron Technology Fund Q3 2023 investor letter, Baron Funds, an investment management company, made the following comments about Microsoft Corporation (NASDAQ:MSFT):
“Looking at the big picture, Microsoft continues to execute at a high level, navigating a challenging macro backdrop while aggressively investing in long-term growth, and we remain confident that Microsoft is well positioned to leverage AI over the medium to long term as it infuses Open AI and other generative AI technologies across its entire product portfolio.”
As of Q3 2023, Microsoft Corporation (NASDAQ:MSFT) ranks highest on our list of 16 most promising QQQ stocks according to hedge funds in terms of hedge fund sentiment. It was the most sought-after stock among the 910 hedge funds tracked by Insider Monkey as 306 of these hedge funds held its shares valued at $72 billion.
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