In this article, we will take a detailed look at Arrowstreet Capital Stock Portfolio: Top 10 Stocks to Buy.
Arrowstreet Capital is a Boston-based independent investment management firm known for its quantitative investment strategies and discreet market presence despite overseeing substantial assets. Founded in 1999 by Bruce Clarke, former CEO of PanAgora Asset Management, along with John Y. Campbell and Peter Rathjens, the firm was created to manage institutional investments, focusing on international and emerging market equities. Its client base includes major institutions such as the Oregon Public Employees Retirement System, CalPERS, and Macquarie Group.
In terms of investment philosophy, Arrowstreet Capital operates as a unified team to manage client portfolios through a global, quantitative approach, leveraging data-driven insights to identify market inefficiencies and generate sustainable, risk-adjusted returns. Its strategy is based on research and technology, using quantitative models to uncover investment opportunities that may not be immediately apparent to the broader market. With a focus on global equities across both developed and emerging markets, the fund constructs diversified portfolios aimed at delivering long-term value.
Moreover, Arrowstreet Capital prioritizes continuous improvement in response to shifting market conditions, integrating new data sources and employing advanced data science tools to refine its investment insights and enhance portfolio performance. While Arrowstreet does not assume that ESG-focused stocks will consistently outperform, it acknowledges the impact of environmental, social, and corporate governance factors on profitability and risk, incorporating them into its models. The firm’s collaborative team structure ensures active portfolio management, with a strong emphasis on long-term investment strategies and talent development.
Peter Rathjens is the Chief Investment Officer at Arrowstreet Capital in Boston, Massachusetts. He holds a BA from Oberlin College and an MA from Princeton University. Bruce Clarke, Co-Founder and Chairman of Arrowstreet Capital, leads an institutional asset management firm overseeing a portfolio exceeding $140 billion. Previously, he served as CEO of PanAgora Asset Management and gained international experience working in Canada, the UK, Italy, and the US. Clarke earned an MBA from London Business School and a Bachelor’s degree from the University of British Columbia. John Young Campbell, a Partner and Co-Head of Research at Arrowstreet, has an extensive background in finance, having served as President of the American Finance Association, Director of Research at PanAgora Asset Management, a professor at Princeton University, and President of the International Atlantic Economic Society. He holds a doctorate from Yale University and an undergraduate degree from the University of Oxford.
Arrowstreet Capital’s latest 13F filing for Q4 2024 reported $124.94 billion in managed 13F securities, with a top 10 holdings concentration of 28.9%. This reflects the firm’s strategic focus on high-value investments while maintaining a diversified portfolio.
Peter Rathjens of Arrowstreet Capital
Our Methodology
The stocks discussed below were picked from Arrowstreet Capital’s Q4 2024 13F filings. They are compiled in the ascending order of the hedge fund’s stake in them as of December 31, 2024. To assist readers with more context, we have included the hedge fund sentiment regarding each stock using data from over 1,000 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Arrowstreet Capital Stock Portfolio: Top 10 Stocks to Buy
10. Altria Group, Inc. (NYSE:MO)
Number of Hedge Fund Holders as of Q4: 47
Arrowstreet Capital’s Equity Stake: $1.16 Billion
One of the world’s largest producers of tobacco, Altria Group, Inc. (NYSE:MO) released its financial results for the fourth quarter and full year of 2024, along with its earnings guidance for 2025, on January 30, 2025. CEO Billy Gifford highlighted the company’s progress, emphasizing strong financial performance, strategic investments, and substantial cash returns to shareholders. The company projects its 2025 full-year adjusted diluted earnings per share (EPS) to range between $5.22 and $5.37, reflecting a 2% to 5% increase from the 2024 base of $5.12.
Altria’s core tobacco business delivered solid income growth and improved profit margins, supported by its strong brands and dedicated workforce. The company achieved $5.11 billion in net revenue after excise taxes for Q4 2024, reflecting a nearly 1.6% increase from the previous year. Earnings per share also saw a rise, reaching $1.29, which was 9% up from fourth quarter 2023, and slightly surpassed analyst estimates of $1.28. Altria Group, Inc. (NYSE:MO) announced that its Board of Directors has declared a regular quarterly dividend of $1.02 per share. The dividend will be payable on April 30, 2025, to shareholders who are recorded as of March 25, 2025. The ex-dividend date for this distribution is also set for March 25, 2025.
Altria’s 2025 earnings guidance takes into account several factors, including the impact of one fewer shipping day in the first quarter, potential effects of enforcement efforts on the illicit e-vapor market, and cost savings reinvestment from its previously announced Optimize & Accelerate initiative. The projection also factors in lower expected net periodic benefit income. While the company remains confident in its growth outlook, it acknowledges the evolving external landscape, including economic conditions, consumer purchasing trends, regulatory developments, and illicit product enforcement. Additionally, Altria Group, Inc. (NYSE:MO) plans to invest in initiatives supporting its long-term vision, such as market activities for smoke-free products and continued research and regulatory efforts.
Ashva Capital stated the following regarding Altria Group, Inc. (NYSE:MO) in its Q3 2024 investor letter:
“At Ashva Capital, our focus on intrinsic value–rather than market sentiment or temporary price metrics– sets our portfolio apart from peers. For example, we hold Altria Group, Inc. (NYSE:MO), which has demonstrated resilience and strong performance within our portfolio, particularly following a robust Q3 earnings report. Altria’s results highlighted increased demand for smokeless products, underscoring both the adaptability of its business model and its long-term growth potential—a key factor in our investment decision.
This approach to intrinsic value echoes insights from renowned value investor Bill Miller, whose strategy emphasized fundamental value over market-driven factors. Key principles from Miller’s approach that inform our strategy include:..” (Click here to read the full text)
9. The Walt Disney Company (NYSE:DIS)
Number of Hedge Fund Holders as of Q4: 108
Arrowstreet Capital’s Equity Stake: $1.21 Billion
The Walt Disney Company (NYSE:DIS) surpassed market expectations in its fiscal Q1 2025 earnings report released on February 5, 2025. The company reported earnings per share of $1.76, outperforming analysts’ projections of $1.43. Additionally, revenue exceeded forecasts, reaching $24.69 billion compared to the expected $24.55 billion. A standout achievement was the continued success of its entertainment streaming division, which includes Disney+ and Hulu, as it recorded its second consecutive quarter of profitability. This segment generated $293 million in operating income on $6.07 billion in revenue, reflecting a 9% year-over-year increase. Although Disney+ experienced a global net loss of 700,000 subscribers, Hulu outperformed expectations by gaining 1.6 million new subscribers, largely attributed to price increases implemented in October.
The Walt Disney Company (NYSE:DIS)’s stock has declined 13.5% in the two weeks of March 2025, dropping from $113.80 to $98.44, marking its steepest drop since November 2021. Economist Alice Kassens attributed this decline to weakening consumer confidence, as concerns over rising prices are reducing consumer sentiment and spending. Since discretionary expenses like vacations and travel are often the first to be cut, industries such as airlines, hospitality, and entertainment—including Disney—are feeling the impact. Despite these challenges, analysts cited the stock’s strong long-term growth potential for its theme parks, resorts, and cruise lines. On its latest earnings call, The Walt Disney Company (NYSE:DIS) reported a 5% decline in U.S. theme park income, largely due to hurricanes Milton and Helene, which disrupted operations in the southeastern U.S. last summer.
As of Q4 2024, Arrowstreet Capital significantly increased its holdings in The Walt Disney Company (NYSE:DIS) to approximately 10.9 million shares, marking a 76% rise from 6.2 million shares in Q3. The fund’s stake in the company is now valued at over $1.2 billion. Insider Monkey’s database indicated that 108 hedge funds held stakes in the company at the end of Q4 2024, with a value of nearly $6.61 billion, as opposed to 76 funds in Q3.
8. AT&T Inc. (NYSE:T)
Number of Hedge Fund Holders as of Q4: 80
Arrowstreet Capital’s Equity Stake: $1.33 Billion
Analysts revised their Q1 2025 earnings per share (EPS) estimate for AT&T Inc. (NYSE:T), increasing the forecast from $0.51 to $0.52 per share. The consensus estimate for the multinational telecommunications company’s full-year 2025 earnings remains at $2.14 per share. Additionally, analysts projected its fiscal year 2025 earnings at $2.07 per share and estimated Q1 2026 earnings at $0.55 per share.
AT&T Inc. (NYSE:T) last released its quarterly earnings results on January 27. The company reported a substantial year-over-year increase in net income, rising to $4.4 billion from $2.6 billion in the previous quarter. However, full-year net income declined to $12.3 billion from $15.6 billion year-over-year, reflecting broader industry challenges and heightened investment in network upgrades. Earnings per share for the quarter remained at $0.54, surpassing analyst expectations of $0.51. These results reinforce AT&T’s strong financial standing as it continues to invest in next-generation technology and infrastructure. With strategic plans for network expansion and share repurchases in the latter half of 2025, AT&T Inc. (NYSE:T) remains committed to delivering long-term value to both customers and shareholders, earning recognition as a top stock to buy according to Arrowstreet Capital.
CEO John Stankey emphasized the company’s increasing use of AI and cloud technology to enhance customer interactions, improve products, and streamline operations. He noted that AI-driven advancements have already led to improved efficiency, particularly in software development, resulting in cost reductions. Addressing concerns about emerging AI competition, Stankey acknowledged that while AI technology is still evolving, AT&T Inc. (NYSE:T) is well-positioned to leverage its vast data resources to refine pricing strategies, better target customers, and strengthen its market presence. Looking ahead, he expressed confidence that by 2025, the company will showcase strong business momentum driven by the successful integration and execution of AI initiatives.
TCW Relative Value Large Cap Fund stated the following regarding AT&T Inc. (NYSE:T) in its Q3 2024 investor letter:
“AT&T Inc. (NYSE:T), based in Dallas, TX, is a nationwide provider of voice, video, and data communications services to businesses and consumers in the wired, wireless, and broadband. At initiation, the stock had a $141 billion market capitalization and met all five valuation factors with an above market dividend yield of 5.6%. From a sustainability prism, the company completed its commitment to invest $2 billion by the end of 2023 to help bridge the digital divide. AT&T is working on enabling low-income households to access to low-cost broadband services through its Access service plan as well as reaching out to more rural communities and Tribal lands where internet access remains a challenge. It is nearly 85% the way to providing one million people in need with digital resources through AT&T Connected Learning® with the goal to be reached by the end of 2025. In 2020, the company announced that it is committed to be carbon neutral by 2035 with zero carbon emission across all operations. It is deploying Smart Climate Solutions – through efforts like its Connected Climate Initiative – that will help enable its business customers to reduce their emissions as well. The company’s goal is to help collectively reduce its emissions by one billion metric tons – a gigaton – by 2035, compared to 2018 levels. The primary catalysts are new/strong management and restructuring. John Stankey was appointed CEO in July 2020 and he is committed to refocusing the company and improving its financial performance. The company combined its WarnerMedia operation with Discovery during 1Q:22 which eliminated AT&T’s exposure to the rapidly evolving media industry and refocused its core telecommunication business thus eliminating a major drag on profitability and the company’s balance sheet by reducing long-term debt from a peak $176 billion during 2020 to $142 billion at the end of June 2024 quarter. AT&T is moving aggressively to reduce cost and sell non-core assets such as its advertising platform Xander to Microsoft† which was accomplished during 2022. The company has redesigned its network to be software driven structure reducing the capital investment cycle in its national network – resulting in a network that is flexible with unrivaled speed and reliability – thus enhancing its nationwide position. By the end of 2023, it expanded its 5G network to reach more than 302 million people in nearly 24,500 cities and towns in the U.S. The company’s mid-band 5G+ network alone grew to cover more than 210 million people. AT&T is one of the largest investors in digital infrastructure in the U.S. Over the five years ending 2023, the company invested nearly $150 billion primarily in its wireless, fiber optics, and wireline networks. The extensive restructuring and refocusing of AT&T on its core business should result in improved earnings and cash flow while at the same time reducing uncertainty for shareholders.”
7. Booking Holdings Inc. (NASDAQ:BKNG)
Number of Hedge Fund Holders as of Q4: 99
Arrowstreet Capital’s Equity Stake: $1.39 Billion
Booking Holdings Inc. (NASDAQ:BKNG) is an American travel technology company. On February 20, 2025, the company reported revenue of $5.47 billion for the final quarter of 2024, reflecting a 14% increase from the previous year and exceeding analysts’ expectations of $5.19 billion. The company also posted adjusted earnings of $41.55 per share, surpassing the consensus estimate of $36.70 compiled by analysts. Gross bookings for the quarter reached $37.2 billion, outperforming analysts’ projections of $34.5 billion. Both revenue and adjusted earnings per share showed significant year-over-year growth, highlighting the company’s strong performance in the travel and dining sector.
In addition to its earnings results, Booking Holdings Inc. (NASDAQ:BKNG) announced that its board had approved a new $20 billion stock buyback program, complementing the $7.7 billion remaining from the previous program at the end of 2024. Looking ahead, Booking expects revenue to grow between 2% and 4% year-over-year in the first quarter, with gross bookings projected to rise by 5% to 7%. For the full year, revenue and gross bookings are expected to increase in the mid-single-digit percentage range, while adjusted earnings per share are expected to see low double-digit growth. Following these results, analysts at Jefferies and JPMorgan raised their price targets for Booking stock to $5,400 and $5,750, respectively, citing strong travel demand and the company’s plans to increase social media advertising.
Booking Holdings Inc. (NASDAQ:BKNG)’s Board of Directors has approved a cash dividend of $9.60 per share, representing a 10% increase from the previous year’s quarterly dividend of $8.75. The dividend is scheduled for payment on March 31, 2025, to stockholders who are recorded as of the close of business on March 7, 2025.
Insider Monkey’s database revealed that 99 hedge funds had stakes in Booking Holdings at the end of Q4, with a combined value of nearly $10.14 billion, compared to 93 funds in the previous quarter. The growing hedge fund interest underscores strong institutional confidence in the stock, positioning Booking Holdings Inc. (NASDAQ:BKNG) as a top stock to buy.
6. Shopify Inc. (NYSE:SHOP)
Number of Hedge Fund Holders as of Q4: 64
Arrowstreet Capital’s Equity Stake: $1.75 Billion
Shopify Inc. (NYSE:SHOP), a multinational e-commerce company, reported impressive revenue growth for the fourth quarter, surpassing expectations, though it fell short on earnings. The company posted adjusted earnings per share (EPS) of $0.39, missing the projected $0.43. However, revenue came in stronger than anticipated at $2.81 billion, exceeding the forecasted $2.73 billion. This represented a significant 31% increase from the $2.14 billion recorded in the same quarter of the previous year, demonstrating Shopify’s continued expansion and the increasing activity of its merchants. The company’s solid revenue performance highlights its ability to attract and retain businesses on its platform, even in a competitive e-commerce landscape.
Despite the earnings miss, Shopify Inc. (NYSE:SHOP) remains confident about its long-term growth prospects. The company expects the momentum seen in Q4 to extend into the first quarter, although it acknowledged that Q1 is historically its weakest in terms of gross merchandise volume. This positive outlook reflects Shopify’s strengthening ecosystem and the increasing adoption of its commerce solutions. The earnings report also comes at a time of broader shifts in the e-commerce sector, following former President Donald Trump’s recent tariffs on major trading partners and his decision to end the de minimis trade loophole, a policy often leveraged by Chinese online retailers. During an investor call, Shopify President Harley Finkelstein underscored the importance of the de minimis exemption for small businesses, emphasizing how it helps lower shipping costs and enables merchants to remain competitive. He also called for further reforms to support global commerce while ensuring fair trade practices.
As of Q4 2024, Arrowstreet Capital significantly boosted its holdings in Shopify Inc. (NYSE:SHOP), increasing its stake by 80% to over 16 million shares, up from 9 million shares in Q3. This move elevated the fund’s total investment in the company to nearly $1.8 billion. The strong hedge fund interest underscores growing confidence in Shopify’s long-term potential, making it a top stock to buy.
5. Netflix, Inc. (NASDAQ:NFLX)
Number of Hedge Fund Holders as of Q4: 144
Arrowstreet Capital’s Equity Stake: $2.05 Billion
Netflix, Inc. (NASDAQ:NFLX) is a leading global streaming service that provides a diverse array of movies, TV shows, and original productions to millions of subscribers worldwide. The company achieved record highs after delivering a strong fourth-quarter earnings report, surpassing expectations for subscriber growth, revenue, and profitability. In Q4 2024, Netflix reported earnings of $4.27 per share, marking a 102% increase from the previous year, while revenue climbed 16% to reach $10.25 billion. The platform gained 18.91 million new subscribers during the quarter, exceeding Wall Street estimates and bringing its total subscriber count to 301.63 million. For 2025, Netflix projects a 13% revenue increase, reaching $44 billion.
Immediately following the outstanding Q4 results, Netflix, Inc. (NASDAQ:NFLX)’s stock surged 18%, as analysts voiced confidence in the company’s 2025 growth potential, upcoming content slate, and continued dominance in the streaming industry. The company expects revenue growth to be driven by increased user engagement, organic subscriber expansion, and higher average revenue per user due to recent price adjustments.
However, Netflix, Inc. (NASDAQ:NFLX) shares experienced a sharp decline on March 7, falling 4.5% after an 8% drop the previous day, reducing the company’s market capitalization by approximately $40 billion to $375 billion. The downturn followed a report from MoffettNathanson analyst Robert Fishman, who warned that while Netflix may continue to see subscriber growth in the near term due to its content lineup and ad-supported tier, the impact of its password-sharing crackdown is expected to diminish. Despite this decline, the stock remains up 46% since March 2024 and has risen 1% year-to-date, even after an 11% drop in the past 30 days. The company saw a surge in shares following its January earnings report, which revealed nearly 19 million new subscribers in Q4 2024. In response to these strong results, Guggenheim Partners’ Michael Morris raised Netflix, Inc. (NASDAQ:NFLX)’s 12-month price target from $950 to $1,100, citing the anticipated return of hit series like Stranger Things and Squid Game in 2025, as well as the continued growth of Netflix’s ad-supported business.
RiverPark Large Growth Fund stated the following regarding Netflix, Inc. (NASDAQ:NFLX) in its Q4 2024 investor letter:
“Netflix, Inc. (NASDAQ:NFLX): NFLX was a top contributor in the fourth quarter powered by a 3Q earnings report that included stronger-than-expected revenue and operating income, solid subscriber additions, and positive forward commentary. Anti-password sharing and ad tier initiatives continue to drive subscriber growth while improving revenue per user trends, from recent price increases, drive margin expansion. The company was optimistic about future revenue growth, margin expansion, free cash flow generation and future return of capital programs.
The recent re-acceleration of subscriber growth, plus price increases on premium memberships and a stabilization of content investments, should position the company for low double digit annual revenue growth over the next few years while driving the operating margin to more than 25%. We also believe that the stabilization of content spend should allow the company to continue to scale its free cash flow.”
4. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders as of Q4: 262
Arrowstreet Capital’s Equity Stake: $5.21 Billion
Meta Platforms, Inc. (NASDAQ:META) has solidified its leadership in digital advertising through rapid advancements in artificial intelligence (AI), driving substantial financial growth despite shifting industry policies. In its Q4 2024 earnings report, Meta reported exceptional performance, with revenue rising 21% year-over-year to $48.4 billion, surpassing analysts’ expectations of $47 billion and reinforcing its competitive edge. Earnings per share (EPS) surged 50% to $8.02, exceeding projections of $6.76 and contributing to a nearly 9% increase in Meta’s stock price. The company’s digital advertising segment remains its primary revenue source, leveraging AI to enhance ad targeting and content recommendations, which has strengthened its market dominance and attracted higher ad spending.
Meta Platforms, Inc. (NASDAQ:META) has seen a 22% increase over the past year, though its stock remains 15% below its 52-week high. Despite this, investors have reason for optimism as the company prepares to launch its Llama 4 artificial intelligence (AI) model in April 2025, which is expected to introduce major technological advancements. At the Morgan Stanley Technology, Media, and Telecom Conference, Meta’s Chief Product Officer Chris Cox highlighted Llama 4’s capability to enhance AI agents, enabling them to perform complex, multi-step tasks autonomously. Additionally, Meta Platforms, Inc. (NASDAQ:META) is set to host its first LlamaCon AI Conference on April 29, further emphasizing its commitment to AI innovation. Industry experts suggest that Meta’s expanding AI initiatives, including a rumored standalone Meta AI app expected in Q2 2025, could strengthen its position in the competitive generative AI market.
Investor confidence in Meta Platforms, Inc. (NASDAQ:META) continues to grow, with institutional support increasing significantly. Hedge fund interest also saw a notable rise, with 262 funds holding stakes valued at nearly $59.4 billion by the end of Q4 2024, compared to 235 funds in the previous quarter, according to Insider Monkey’s database. With its strong financial position, AI-driven expansion, and dominance in digital advertising, Meta Platforms, Inc. (NASDAQ:META) remains a top stock choice for investors.
3. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders as of Q4: 317
Arrowstreet Capital’s Equity Stake: $6.54 Billion
Microsoft Corporation (NASDAQ:MSFT) posted $69.63 billion in Q4 revenue, surpassing expectations and reflecting a 12.27% year-over-year increase. Its earnings per share (EPS) of $3.23 also exceeded analyst forecasts of $3.12, reinforcing the company’s solid market position and ongoing profitability. Beyond financial performance, the company continues to lead in technological innovation. In February 2025, it made a major advancement in quantum computing by developing a topological qubit, a breakthrough with potential applications in artificial intelligence, medicine, and cryptography. This achievement strengthens Microsoft’s role as a global leader in quantum research and enhances its long-term growth potential.
Microsoft Corporation (NASDAQ:MSFT) shares declined on Monday, March 10, as investor concerns over a potential recession grew amid ongoing trade policy uncertainty and tariff changes. In February, President Donald Trump announced a 25% tariff on Canadian and Mexican goods and a 10% tariff on Chinese imports. While tariffs on Canada and Mexico were temporarily postponed for a month, those on Chinese goods took effect as scheduled. By March 4, Trump proceeded with the Canadian and Mexican tariffs and introduced an additional 10% tariff on Chinese imports. The fluctuating trade policies have created uncertainty around pricing stability and supply chains, prompting some investors to offload stocks, particularly in the technology sector, where companies like Microsoft Corporation (NASDAQ:MSFT) rely on global markets for production and distribution. As a result, growth stocks may face increased caution from investors. Trump has acknowledged the possibility of a recession, framing it as a “period of transition” due to his administration’s economic policies.
The company remains a strong investment choice due to its consistent revenue growth, exceeding expectations with a 12.27% year-over-year increase, and its leadership in cutting-edge technologies like quantum computing and artificial intelligence. Despite short-term market volatility caused by trade uncertainties, Microsoft Corporation (NASDAQ:MSFT)’s solid financials, innovation-driven expansion, and dominant market position make it a resilient stock with long-term growth potential.
Mairs & Power Growth Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q4 2024 investor letter:
“Unlike the dot-com companies that operated at the turn-of-the-century, many of today’s technology companies are established businesses with significant cash flows. We have argued, and continue to argue, that many of these investments are perfectly aligned with our investments process in that they embody durable competitive advantages, above-average growth prospects, and excellent management teams.
A perfect example is Microsoft Corporation (NASDAQ:MSFT), which has grown to become the largest holding in the Growth Fund. Microsoft has a near monopoly on the office software productivity market with its Microsoft Office Suite. The company’s Azure platform is a leader in cloud computing and has been steadily gaining share. Thanks to its Office and Azure products, the company is deeply embedded within many enterprise IT ecosystems. Therefore, it should be well-positioned to expand its presence within its customer base, as it rolls out premium-price AI solutions. The company is not resting on its laurels and plans on spending an astounding $80 billion in 2025 to build out AI data centers.”
2. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders as of Q4: 166
Arrowstreet Capital’s Equity Stake: $6.67 Billion
Apple Inc. (NASDAQ:AAPL), ranked second among Arrowstreet Capital’s top stock picks, remains a dominant force in the global technology sector. Founded in 1976, the Cupertino-based company offers a diverse product lineup, including the iPhone, iPad, Mac, Apple Watch, and Apple TV, along with software like iOS and macOS. Its ecosystem extends to services such as Apple Pay, iCloud, and Apple Music, reinforcing its status as one of the most valuable tech firms.
In Q4 2024, Apple Inc. (NASDAQ:AAPL) reported $124.3 billion in revenue, marking a 3.95% year-over-year increase and surpassing analyst expectations. Earnings per share rose to $2.40, up $0.22 from the previous year. Additionally, on January 30, 2025, Apple’s Board of Directors announced a quarterly dividend of $0.25 per share, payable on February 13, 2025. Hedge fund interest in Apple Inc. (NASDAQ:AAPL) also increased, with 166 out of 1,009 funds tracked by Insider Monkey holding positions worth nearly $118.56 billion by the end of Q4 2024, up from 158 funds in Q3.
The company announced a $500 billion investment in the U.S. over the next four years, which includes building a new manufacturing facility, doubling its Advanced Manufacturing Fund to $10 billion, and hiring 20,000 employees primarily in R&D, silicon engineering, software development, and AI. Apple Inc. (NASDAQ:AAPL) will also produce servers in Houston starting this year, with a 250,000-square-foot manufacturing facility set to open in Texas by 2026, playing a crucial role in Apple’s AI initiatives. The company’s investment aligns with President Trump’s push for increased domestic manufacturing, with CEO Tim Cook emphasizing its commitment to American innovation. However, trade tensions with China pose potential risks, as new tariffs could impact Apple’s supply chain. In addition to expanding U.S. manufacturing, Apple is making a multibillion-dollar commitment to produce advanced silicon at TSMC’s Arizona facility and launching a manufacturing academy in Detroit to support AI-driven smart manufacturing.
Tsai Capital mentioned Apple Inc. (NASDAQ:AAPL) in its Q4 2024 investor letter. It stated:
“We initiated our investment in Apple Inc. (NASDAQ:AAPL) in 2016 and elevated it to a core holding in 2018, the same year the company introduced its redesigned 13-inch and 15-inch MacBook Pro models. Under Tim Cook’s visionary leadership, Apple has consistently redefined innovation in hardware and software.
The September 2024 launch of the iPhone 16, with its groundbreaking AI capabilities, including enhanced image generation tools, marks another inflection point. We believe this transformative device is the foundation for an AI-driven supercycle and could entice approximately 100 million consumers to upgrade, reinforcing Apple’s leadership in the industry.
Today, Apple’s ecosystem spans over two billion active devices, supported by a rapidly-growing base of subscription services. This strategy has helped to turbocharge customer engagement and spending. In the most recent fiscal year, which ended in September 2024, Apple’s high-margin services division accounted for 39.3% of total gross profits, up from 32.8% just two years ago.
Apple’s financial footing remains exceptional, with approximately $50 billion in net cash and marketable securities. Looking ahead, we expect earnings-per-share growth to outpace revenue growth, driven by margin expansion and continued share buybacks.”
1. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders as of Q4: 223
Arrowstreet Capital’s Equity Stake: $8.84 Billion
On March 10, 2025, Melius Research analyst Ben Reitzes maintained a Buy rating on NVIDIA Corporation (NASDAQ:NVDA) but lowered his two-year price target from $195 to $170, citing various challenges impacting the stock in the short term. He pointed to factors such as potential tariffs, regulatory restrictions, and advancements in computing that reduce costs as key pressures on Nvidia and other AI-related stocks. In a client note, Reitzes remarked that uncertainty in the sector has led to erratic trading behavior, with even NVIDIA Corporation (NASDAQ:NVDA) shares reflecting market confusion. The upcoming GTC conference in San Jose, where CEO Jensen Huang will deliver a keynote address on March 18, is seen as a potential turning point for the stock.
Despite the recent downturn, analysts believe Nvidia’s fundamentals remain strong, with impressive Q4 earnings reinforcing its leadership in AI technology. NVIDIA Corporation (NASDAQ:NVDA) delivered impressive financial results for the quarter ending January 2025, surpassing both its own guidance and analyst expectations. The company reported revenue of $39.3 billion, reflecting a 12% sequential increase and a remarkable 78% year-over-year growth. A key driver of this success was Nvidia’s data center segment, which saw a 93% increase year-over-year, cementing its role as a once-in-a-generation growth catalyst. Additionally, revenue from the newly launched Blackwell products reached $11 billion, exceeding management’s forecasts. Despite a 150-basis-point sequential decline, NVIDIA Corporation (NASDAQ:NVDA) maintained an adjusted gross margin of 73.5%, aligning with guidance as the company navigated higher costs associated with Blackwell’s introduction.
Looking ahead, Nvidia remains optimistic about its continued growth trajectory. The company has projected revenue of $43 billion for the April quarter, which would mark a 9% sequential increase and a 65% rise year-over-year. This forecast also surpasses consensus estimates of $42.1 billion, reinforcing NVIDIA Corporation (NASDAQ:NVDA)’s strong market position and its ability to drive demand for cutting-edge AI and data center solutions.
Overall, NVIDIA Corporation (NASDAQ:NVDA) ranks first on our list of Arrowstreet Capital’s top 10 stocks to buy. While we acknowledge the potential for NVDA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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