In this article, we will take a detailed look at the top 10 stocks to buy according to Sustainable Insight Capital Management.
Sustainable Insight Capital Management (SICM) focuses on institutional investments, offering both long-only and long-short strategies in public equities. Established by an experienced leadership team with deep institutional knowledge, the hedge fund is committed to providing investment solutions that emphasize sustainability. As of the fourth quarter of 2024, SICM reported managing nearly $228.52 million in 13F securities, with its top 10 holdings making up 56.36% of its portfolio.
Kevin Edward Parker is the founder and Chief Executive Officer of Sustainable Insight Capital Management LLC, which he established in 2013. He also founded Sustainable Insight Capital Management (UK) Ltd. that same year and serves as its CEO as well. Parker earned his undergraduate degree from New York University in 1981. With over 30 years of experience on Wall Street, he has built a distinguished career in investment management and financial leadership. Before launching SICM, Kevin Parker played a key role at Deutsche Bank, where he was a member of the Group Executive Committee from 2001 to 2004 and led its asset management division as Global Head from 2004 to 2012. His extensive expertise in sustainable investing and institutional asset management has positioned SICM as a leader in responsible investment strategies.
Beyond his work at SICM, Parker holds several leadership positions in various organizations. Since 2004, he has also served as Vice Chairman of the New York Police & Fire Widow’s & Children’s Benefit Fund. Additionally, he has been an Independent Director at The Westaim Corporation since 2020, an Independent Non-Executive Director at United Co. RUSAL International PJSC since 2019, and a Director at both Next Jump, Inc. and Westaim Arena Holdings II LLC since 2016. His previous roles include Chairman of the Management Board at DWS International GmbH from 2011 to 2012 and a Director at the Sustainability Accounting Standards Board from 2014 to 2018. He has also held leadership positions at Agri. Capital Group SA, DB Climate Change Advisors, and Green Partners Technology Holdings GmbH. With this, let’s take a look at the top stocks in SICM’s portfolio.
Image by Sergei Tokmakov Terms.Law from Pixabay
Our Methodology
The stocks discussed below were picked from Sustainable Insight Capital Management’s Q4 2024 13F filings. They are compiled in the ascending order of Sustainable Insight Capital Management’s stake in them as of the fourth quarter of 2024. In order to assist readers with more context, we have included the hedge fund sentiment regarding each stock using data from 1008 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 363.5% since May 2014, beating its benchmark by 208 percentage points (see more details here).
Top 10 Stocks to Buy According to Sustainable Insight Capital Management
10. Eli Lilly and Company (NYSE:LLY)
Number of Hedge Fund Holders as of Q4: 115
SICM’s Equity Stake: $6.54 Million
Eli Lilly and Company (NYSE:LLY) has been at the forefront of scientific innovation for nearly 150 years, utilizing biotechnology, chemistry, and genetic medicine to address some of the world’s most pressing health challenges. Headquartered in Indianapolis, Indiana, Eli Lilly and Company (NYSE:LLY) operates in 18 countries, with its products available in approximately 125 countries. In addition to its groundbreaking pharmaceutical developments, it also prioritizes inclusive clinical trials and strives to make its medicines accessible and affordable to diverse populations.
Over the years, Lilly has developed a strong reputation for pioneering treatments, particularly in diabetes and mental health. It introduced widely used medications such as Prozac in 1986 for depression, Zyprexa in 1996 for schizophrenia, and Cymbalta in 2004 for depression and anxiety. In the field of diabetes care, Lilly’s Humalog and Trulicity have been major revenue drivers. Eli Lilly and Company (NYSE:LLY) was also the first to mass-produce both the polio vaccine and insulin. More recently, the company has made significant strides by developing more best-selling drugs such as Mounjaro and Zepbound.
Currently, Eli Lilly and Company (NYSE:LLY) is making a significant investment in its experimental oral weight-loss drug, orforglipron, by accumulating nearly $550 million in pre-launch inventory ahead of its expected 2026 release. This move, which was revealed in a recent financial filing, is uncommon as most pharmaceutical companies typically build inventory closer to regulatory approval. The strategy suggests that the company is aiming for a strong market entry to gain an early advantage over competitors in the weight-loss treatment sector. Currently, the company and Danish rival Novo Nordisk dominate this market with injectable medications, while Novo and other firms like AstraZeneca are also working on oral obesity treatments. Analysts estimate that Lilly’s pre-launch inventory could translate into $10 billion in sales based on 2024 figures, with expectations of further expansion. The company’s confidence in orforglipron is reinforced by promising mid-stage trial results, which showed a 14.7% weight reduction at the highest dose over 36 weeks. With late-stage data anticipated by April, Eli Lilly and Company (NYSE:LLY) is already scaling up manufacturing to ensure a timely launch.
Baron Health Care Fund stated the following regarding Eli Lilly and Company (NYSE:LLY) in its Q4 2024 investor letter:
“Eli Lilly and Company (NYSE:LLY) is a global pharmaceutical company best known for developing and selling GLP-1 medications for diabetes and obesity. Shares detracted from performance as recent GLP-1 revenue results missed heightened expectations. We view Lilly’s Mounjaro/Zepbound GLP-1/GIP drug as an important treatment for diabetic and non-diabetic obese patients and see Lilly continuing to innovate and develop more effective and convenient next-generation medications. Although manufacturing supply and access is limited in the near term, we think this class of drug should be the standard of care for both diabetes and obesity and will become a $150 billion category. We think the recent revenue miss related to the mistiming of demand-generation activities with supply increases and elevated investor expectations after a very strong result in the prior quarter. We think this market is in the early innings of uptake and the adoption of GLP-1s will triple Lilly’s total revenues by 2030.”
9. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders as of Q4: 317
SICM’s Equity Stake: $9.84 Million
Microsoft Corporation (NASDAQ:MSFT) delivered an impressive financial performance in the fourth quarter of 2024, with revenue reaching $69.63 billion, surpassing market estimates of $68.81 billion and marking a 12.27% increase from the previous year. The company also exceeded earnings expectations, reporting earnings per share (EPS) of $3.23, which was 3.47% higher than consensus estimates. This strong financial growth, driven by advancements in cloud computing and artificial intelligence, reinforces Microsoft’s stability and long-term potential, making it a compelling investment choice for those seeking a profitable stock.
As of Q4 2024, Sustainable Insight Capital Management significantly increased its holdings in Microsoft Corporation (NASDAQ:MSFT) to 23,335 shares, marking a 118% rise from 10,747 shares in Q3. This stake is now valued at approximately $9.84 million, making Microsoft the 9th most valuable holding in Kevin Parker’s portfolio. Broader hedge fund interest in the stock also grew, with 174 out of 1,008 funds tracked by Insider Monkey holding positions worth nearly $21 billion by the end of Q4, up from 160 funds in Q3. The rising institutional investment in Microsoft Corporation (NASDAQ:MSFT) highlights strong confidence in its growth potential, reinforcing its status as a top stock to buy.
On February 20, 2025, Microsoft made headlines when it introduced a new quantum computing chip, Majorana 1, which it claims will accelerate the development of quantum computers capable of solving complex, industrial-scale problems within years rather than decades. Although Quantum computing remains highly challenging with many experts believing practical applications are still decades away, Microsoft Corporation (NASDAQ:MSFT) asserts that its breakthrough in developing a topological conductor, a newly engineered material, could significantly speed up this timeline. The company sees this innovation as potentially as transformative as semiconductors were for traditional computing. While some industry leaders, like Nvidia’s CEO Jensen Huang, predict useful quantum computing is still two decades away, others, including Microsoft’s Chetan Nayak, believe the new technology could shift that outlook to just a few years. Despite this optimism, experts caution that more data is needed to fully assess the impact of Microsoft’s research.
Alger Spectra Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q4 2024 investor letter:
“Microsoft Corporation (NASDAQ:MSFT) is a beneficiary of corporate America’s transformative digitization. The company operates through three segments: Productivity and Business Processes (Office365, LinkedIn, and Dynamics), Intelligent Cloud (Server Products and Cloud Services, Azure, and Enterprise Services), and More Personal Computing (Windows, Devices, Gaming, and Search). During the quarter, Microsoft delivered better-than-expected fiscal first-quarter revenues, beating analyst estimates across all three segments. In the Intelligent Cloud business, Azure revenue grew 34% year over-year, slightly above consensus, with AI Services contributing 12% to Azure’s growth, up from 11% in the previous quarter, as demand for AI continues to outpace capacity. However, shares declined after management signaled a potential deceleration in Azure growth for the next quarter and highlighted a negative earnings impact from OpenAI-related losses. Additionally, concerns over significantly increased AI-related capital expenditures (CapEx) raised questions about short-term profitability despite the long-term growth potential. While these near-term challenges led to shares detracting from performance for the quarter, we remain confident in Microsoft’s ability to maintain its leadership in AI.”
8. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders as of Q4: 115
SICM’s Equity Stake: $9.92 Million
NVIDIA Corporation (NASDAQ:NVDA) is a leading American multinational technology company headquartered in Santa Clara, California, and incorporated in Delaware. Established in 1993 by Jensen Huang, Chris Malachowsky, and Curtis Priem, the company specializes in designing graphics processing units (GPUs), application programming interfaces (APIs) for high-performance computing and data science, and system-on-a-chip (SoC) units for mobile and automotive applications. Nvidia is a dominant force in artificial intelligence (AI) hardware and software, though it outsources the manufacturing of its hardware. Its professional GPUs support various industries, including architecture, engineering, scientific research, and media, while its GeForce lineup dominates the consumer market, particularly in gaming and content creation.
By the second quarter of 2023, Nvidia controlled 80.2% of the discrete desktop GPU market. The company has expanded into gaming hardware with products such as the Shield series and cloud gaming service GeForce Now. Additionally, NVIDIA Corporation (NASDAQ:NVDA) develops the CUDA platform, enabling massively parallel computing, and has ventured into mobile computing with its Tegra processors for smartphones, tablets, and automotive systems. Competing with firms like AMD, Intel, and Qualcomm, as well as AI accelerator companies such as Cerebras and Graphcore, the company continues to drive advancements in AI-powered software for audio and video processing, including Nvidia Maxine.
NVIDIA Corporation (NASDAQ:NVDA) reported impressive financial growth in the quarter ending on October 27, 2024. The company achieved $35.08 billion in revenue, reflecting a nearly 94% increase from the corresponding quarter in the previous year. Earnings per share also saw a significant rise, reaching $0.81, which marked a 103% jump compared to the same period in 2023. Additionally, the company announced a quarterly cash dividend of $0.01 per share.
Alger Spectra Fund stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q4 2024 investor letter:
“NVIDIA Corporation (NASDAQ:NVDA) is a leading supplier of graphics processing units (GPUs) for a variety of end markets, such as gaming, PCs, data centers, virtual reality, and high-performance computing. The company is leading in most secular growth categories in computing, and especially artificial intelligence and super-computing parallel processing techniques for solving complex computational problems. In our view, Nvidia’s computational power is a critical enabler of AI and therefore essential to AI adoption. Shares contributed to performance during the quarter, driven by strong demand for its data center products, especially the Hopper H200 chips, which generated double-digit billions in revenue, marking the fastest product ramp in the company’s history. Management provided fiscal fourth-quarter revenue guidance above analyst estimates, along with resilient operating margins supported by robust demand and limited competition. In our view, Nvidia’s leadership in scaling AI infrastructure, including advancements in inference and test-time scaling (i.e., reasoning during inference), is driving adoption among enterprises and startups, providing continued demand for its high-performance chips and software solutions. As older-generation chips are repurposed for inference and new clusters are deployed, we believe Nvidia is well-positioned to capitalize on growing compute needs across AI applications.”
7. T-Mobile US, Inc. (NASDAQ:TMUS)
Number of Hedge Fund Holders as of Q4: 70
SICM’s Equity Stake: $12.31 Million
Headquartered in Bellevue, Washington, T-Mobile US, Inc. (NASDAQ:TMUS) is a leading American wireless network provider and the second-largest carrier in the United States, serving 130 million subscribers as of December 31, 2024. The company serves as a host network for various mobile virtual network operators, reinforcing its presence in the telecommunications market.
Sustainable Insight Capital Management owned 55,792 shares of T-Mobile US, Inc. (NASDAQ:TMUS) as of Q4 2024, with a total value of $12.31 million, representing 5.38% of Parker’s portfolio. Moreover, the fund increased its stake in the company by 15% during the fourth quarter of 2024, which suggests a positive hedge fund sentiment about the stock. Insider Monkey’s database indicated that 70 hedge funds held stakes in the company as of the end of Q4 2024, with a total value of $2.86 billion, as opposed to 66 funds in Q3.
T-Mobile US, Inc. (NASDAQ:TMUS) announced its Q4 net revenue of $21.87 billion which showed a year-over-year growth of almost 7%. The company’s EPS was announced as $2.50, surpassing consensus estimates by $0.12.
The company has taken a significant step forward in satellite connectivity by launching a beta test for its partnership with SpaceX’s Starlink, allowing users to send SMS messages even in areas without traditional network coverage. The initiative, which T-Mobile was not initially planning to extend to rival carriers, was spurred by Verizon’s recent ad campaign about satellite texting. The company has also leveraged this technology for emergency response, activating satellite coverage during disasters like hurricanes and wildfires to keep affected communities connected. Additionally, the Starlink system will be used to broadcast Wireless Emergency Alerts nationwide, further enhancing public safety. T-Mobile’s push into satellite connectivity strengthens its position as an industry leader, providing a crucial advantage in network reliability and innovation, making it a strong stock choice for investors.
6. AT&T Inc. (NYSE:T)
Number of Hedge Fund Holders as of Q4: 80
SICM’s Equity Stake: $12.40 Million
Over time, AT&T became the dominant telecommunications provider in the United States, maintaining a near-monopoly on local phone services.
In 2005, the company was acquired by Southwestern Bell, one of the regional companies formed after the Bell System breakup, and the merged entity adopted the AT&T Inc. name. Today, it is a leading multinational telecommunications company headquartered in Dallas, Texas, ranking among the world’s largest telecom firms by revenue. As the third-largest wireless carrier in the United States, behind Verizon and T-Mobile, AT&T Inc. (NYSE:T) continues to expand its services across wireless communications, broadband, and media. With a history rooted in innovation and strategic growth, the company remains a major player in the industry, adapting to technological advancements and market demands.
AT&T Inc. (NYSE:T) has rebounded from past financial missteps, shifting its focus back to its core telecommunications business after costly media ventures. With the sale of its remaining DirecTV stake, the company is now a pure telecom provider, a move that has already shown positive results. It continues to gain wireless subscribers, while its fiber internet business thrives, benefiting from bundled services that improve customer retention and lifetime value. Excluding DirecTV, the company generated $15.3 billion in free cash flow in 2024, with projections to surpass $16 billion in 2025 and exceed $18 billion by 2027. Despite recent stock gains reducing the dividend yield to 4.3%, AT&T Inc. (NYSE:T) plans to spend $20 billion on share buybacks over the next three years. While not a high-growth stock, its strong cash flow, stable wireless and fiber operations, and shareholder-focused strategy make it a compelling investment.
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.”
5. Chipotle Mexican Grill, Inc. (NYSE:CMG)
Number of Hedge Fund Holders as of Q4: 83
SICM’s Equity Stake: $13.63 Million
Chipotle Mexican Grill, Inc. (NYSE:CMG), commonly known as Chipotle, is a U.S.-based fast-casual restaurant chain specializing in made-to-order bowls, tacos, and burritos. As of mid-2024, the company operates 3,500 locations in six countries.
Over the years, Chipotle Mexican Grill, Inc. (NYSE:CMG) has continued to grow, surpassing 2,000 locations by 2015 with a workforce of over 45,000 employees. In 2018, the company relocated its corporate headquarters from Denver to Newport Beach, California, marking a new chapter in its expansion. Known for its commitment to fresh, high-quality ingredients and customizable meals, Chipotle remains a leader in the fast-casual dining space. Its strong brand recognition and steady expansion make it an appealing investment for those seeking growth in the restaurant industry.
Chipotle Mexican Grill, Inc. (NYSE:CMG) posted strong financial results for the quarter ending December 2024, reporting $2.85 billion in revenue, which reflected a 13% year-over-year increase. Additionally, the company reported earnings per share (EPS) of $0.25, fulfilling analyst projections, and emphasizing its steady growth and strong market position.
Sustainable Insight Capital Management owned 226,083 shares of the company as of Q4 2024, with a total value of over $13.63 million, making it the stock with the 5th largest stake in Parker’s portfolio. Moreover, the fund increased its stake in the company by 157% during the fourth quarter of 2024, from 88,300 shares by the end of Q3. By the end of the fourth quarter, 83 funds tracked by Insider Monkey held stakes in Chipotle Mexican Grill, Inc. (NYSE:CMG) worth over $2.04 billion, up from 69 funds by the end of Q3.
ClearBridge Growth Strategy stated the following regarding Chipotle Mexican Grill, Inc. (NYSE:CMG) in its Q4 2024 investor letter:
“We also initiated a position in fast casual restaurant chain Chipotle Mexican Grill, Inc. (NYSE:CMG). The recent pullback in shares related to a moderation in industry-wide restaurant sales and CEO Brian Niccol’s August departure created an attractive entry point into a company with industry-leading unit economics in a still underpenetrated market. Chipotle plans to double its store footprint over time while executing initiatives to increase volume growth through technology enhancements, reduced mobile order friction and higher production during peak hours. Better throughput, technological integration and improved mix should help to drive continued margin expansion. Chipotle further diversifies the portfolio, adding to consumer discretionary where we have historically had less exposure.”
4. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders as of Q4: 338
SICM’s Equity Stake: $14.70 Million
Amazon.com, Inc. (NASDAQ:AMZN) is a global leader in technology, excelling in e-commerce, cloud computing, digital streaming, online advertising, and artificial intelligence. Its diverse portfolio includes major subsidiaries such as Amazon Web Services (AWS), Zoox, Ring, Twitch, IMDb, Kuiper Systems, Whole Foods Market, and Amazon Lab126, allowing the company to expand its presence across multiple industries.
Amazon.com, Inc. (NASDAQ:AMZN) showcased strong financial growth in Q4 2024, reporting $187.79 billion in revenue—a 10% increase from the same quarter of the previous year—while slightly surpassing analyst expectations. Its earnings per share (EPS) of $1.86 exceeded projections by 25.3%, reinforcing its consistent profitability. With its dominant market position, ongoing innovation in high-growth industries, and robust financial performance, the company remains an attractive investment. Its ability to drive revenue across various sectors while maintaining long-term stability makes it a top choice for investors looking for both growth and resilience in the tech industry.
Morningstar increased Amazon.com, Inc. (NASDAQ:AMZN)’s fair value estimate to $240 per share, up from $200, following strong fourth-quarter results. Despite currency-related revenue challenges and rising capital expenditures, the company exceeded expectations, with revenue growing 10% year-over-year to $187.8 billion. AWS and advertising, two key drivers of long-term growth, expanded by 19% and 18%, respectively. The company’s operating profit reached $21.2 billion, surpassing projections, while its margin improved to 11.3% from 7.8% a year prior. With $101.2 billion in cash and $52.6 billion in debt, its financial position remains solid. Free cash flow is expected to normalize as previous investments in infrastructure and content balance out. Amazon.com, Inc. (NASDAQ:AMZN) continues to enhance efficiency through robotics and its multi-hub strategy. The company’s leadership in e-commerce, cloud computing, and advertising, combined with consistent financial growth, makes it a compelling stock. Its strong fundamentals and market dominance suggest a sustained long-term value for investors.
Recurve Capital stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q4 2024 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN) – 5.1% of assets as of 12/31/2024
Amazon has been an agent of disruption for a long time in retail, cloud computing, and beyond. Its consumer business is incomparable for small parcel, general merchandise. Prime delivery windows keep shrinking, which keeps pulling more market share Amazon’s way. It has an amazing transportation, fulfillment, and logistics network capable of service levels that were unthinkable at current prices just a couple decades ago. Additionally, AWS is a leader in cloud verticalization, powered by proprietary semiconductors, hardware, software, facilities, and more. Amazon’s customer-centricity is the driving force behind its continuous innovation and disruption. As the juggernaut disruptor, it is likely the world’s best company at solving really hard problems for customers at massive scale.
Amazon does not trade at a mid-single multiple of medium-term FCF/share or EPS. Our cost basis was less than 10x our estimate of 2028 FCF. However, few companies reinvest at the rate Amazon does and, theoretically, it could double the free cash flow I model simply by moderating its reinvestments for a year or two – but that may not be a great outcome for long-term investors. This is why it is important to evaluate companies based on owner’s earnings, not reported earnings. For instance, a private owner of Amazon might shut down Project Kuiper and Alexa and massively increase EPS and FCF/share.”
3. Palo Alto Networks, Inc. (NASDAQ:PANW)
Number of Hedge Fund Holders as of Q4: 83
SICM’s Equity Stake: $15.65 Million
Palo Alto Networks, Inc. (NASDAQ:PANW) is a leading global cybersecurity firm headquartered in Santa Clara, California, specializing in advanced firewalls and cloud-based security solutions. The company provides services to 80,000 organizations across more than 150 countries, including 85 of the Fortune 100.
Founded in 2005 by Nir Zuk, an engineer with experience at Check Point and NetScreen Technologies, Palo Alto Networks, Inc. (NASDAQ:PANW) quickly emerged as a cybersecurity powerhouse. The company provides a range of cybersecurity solutions, including its Network Security Platform, Cloud-Delivered Security Services, and Next-Generation Firewalls. It also offers Secure Access Service Edge (SASE), comprehensive cloud security solutions, and an AI-driven Security Operations Platform. Additionally, Palo Alto Networks delivers Threat Intelligence and Incident Response Services to help organizations proactively defend against cyber threats.
As of Q4 2024, Sustainable Insight Capital Management held 86,006 shares of Palo Alto Networks, Inc. (NASDAQ:PANW), valued at approximately $15.65 million, making it the third-largest holding in Parker’s portfolio. By the end of the fourth quarter of 2024, 83 hedge funds tracked by Insider Monkey had investments in the company, with a total value of nearly $1.88 billion, an increase from 64 funds in Q3. Palo Alto Networks’ strong market presence, innovative cybersecurity solutions, and growing institutional investment indicate its potential for long-term growth. With increasing global cybersecurity threats and the company’s consistent expansion in AI-driven security and cloud-based services, it remains a compelling stock for investors seeking stability and future upside.
Parnassus Growth Equity Fund stated the following regarding Palo Alto Networks, Inc. (NASDAQ:PANW) in its Q2 2024 investor letter:
“Palo Alto Networks, Inc. (NASDAQ:PANW) has been a profitable position for the portfolio. Given its elevated valuation, we decided to sell it to fund the purchase of Workday, where we see greater opportunity and a clearer story of margin expansion potential.”
2. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders as of Q4: 161
SICM’s Equity Stake: $16.17 Million
Broadcom Inc. (NASDAQ:AVGO) is a leading global technology company with a legacy rooted in the innovation of AT&T, Lucent, and Hewlett-Packard. The company has grown through strategic acquisitions, including LSI, Broadcom Corporation, Brocade, CA Technologies, Symantec’s enterprise security business, and VMware, strengthening its position in the semiconductor and infrastructure software industries.
Broadcom Inc. (NASDAQ:AVGO) organizes its offerings into two main categories: products and solutions. Its product lineup includes hardware such as network storage components crucial for cloud computing, wireless infrastructure like Wi-Fi systems for mobile connectivity, and optical products such as LED displays used in consumer electronics. On the software side, Broadcom develops tools for mainframe computing, business process automation, and cybersecurity to protect systems from digital threats. The company’s solutions cater to industry-specific challenges, including broadband and wired networking systems for internet connectivity, wireless communication technologies for mobile devices, and data center hardware for large-scale data processing.
According to analysts, the company’s impressive performance is driven by strong demand for its networking products and its custom AI accelerators (XPUs), which are increasingly critical in powering next-generation artificial intelligence applications. The company’s expanding AI-focused portfolio, combined with a robust network of industry partnerships, positions it for continued revenue growth and market leadership.
Despite these strengths, Broadcom Inc. (NASDAQ:AVGO) faces challenges stemming from broader economic uncertainties and its substantial debt burden. Macroeconomic headwinds, including fluctuating interest rates and global supply chain disruptions, could impact future profitability. Additionally, managing high levels of debt remains a key concern, as it may limit the company’s financial flexibility. However, Broadcom’s consistent innovation and strong market demand suggest it is well-positioned to navigate these challenges while continuing its upward trajectory.
Aristotle Atlantic Core Equity Strategy stated the following regarding Broadcom Inc. (NASDAQ:AVGO) in its Q4 2024 investor letter:
Broadcom Inc. (NASDAQ:AVGO) contributed to performance in the fourth quarter as the company’s third quarter results demonstrated continuing strength for its AI networking and custom accelerator semiconductor business. The company also gave long-term guidance for the service addressable market (SAM) opportunity for its AI-related business, indicating a market opportunity of $60 billion to $90 billion, which only includes contributions from its current three customers. This long-term outlook for AI semiconductor content exceeded investor expectations. Broadcom’s quarterly results also showed the company is ahead on its VMware integration timeline to achieve $8.5 billion in EBITDA, which will support long-term gross and operating margin expansion for the company.
1. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders as of Q4: 166
SICM’s Equity Stake: $17.74 Million
Apple Inc. (NASDAQ:AAPL) ranks 1st on the list of the top 10 stocks to buy according to Sustainable Insight Capital Management. The company, based in Cupertino, California, is a global technology leader known for its innovative consumer electronics, software, and services. In addition to a wide range of products, Apple also offers services such as Apple Pay, iCloud, and Apple Music, solidifying its position as one of the world’s most valuable tech companies.
In the quarter ending December 2024, Apple Inc. (NASDAQ:AAPL) reported $124.3 billion in revenue, a 3.95% year-over-year increase, slightly exceeding analyst expectations. Earnings per share (EPS) rose to $2.40, up $0.22 from the previous year. On January 30, 2025, the company’s Board of Directors declared a quarterly dividend of $0.25 per share, payable on February 13, 2025.
The share price of Apple Inc. (NASDAQ:AAPL) climbed following the company’s stronger-than-expected earnings report, driven by increased iPhone upgrades for AI-powered features. Despite a decline in iPhone sales during the December quarter, partly due to regulatory challenges in China and the gradual global rollout of Apple Intelligence, Apple’s overall profit exceeded forecasts, thanks to strong growth in its services division. CEO Tim Cook highlighted that iPhone upgrades reached a record high last quarter and expects Apple Intelligence to gain widespread adoption as iPhone 15 and 16 sales grow. In April, Apple Intelligence will expand to additional languages, broadening its reach. Apple’s stock has risen 30% over the past year, outperforming the broader market. Given Apple’s strong financial position, increasing adoption of AI-driven products, and expanding services segment, it remains a top stock to buy, offering long-term growth potential and market stability.
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.”
Overall, Apple Inc. (NASDAQ:AAPL) ranks first on our list of the top 10 stocks to buy according to Sustainable Insight Capital Management. While we acknowledge the potential for AAPL 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 AAPL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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