We recently compiled a list of the 10 Best Tech Stocks For Long Term Investment. In this article, we are going to take a look at where Apple Inc. (NASDAQ:AAPL) stands against the other tech stocks.
In a recent conversation on December 3, Clare Pleydell-Bouverie from Liontrust Asset Management appeared on CNBC and shared insights on the current state of innovation, particularly in Silicon Valley. She emphasized that the pace of innovation is not only continuing but is accelerating. This rapid evolution necessitates frequent visits to the region to discern which companies are successfully navigating this transition and which are not. Pleydell-Bouverie noted that the clarity regarding these companies is improving quarter by quarter. She expressed a firm belief that the beneficiaries of the new technology cycle, which began about 18 months to 2 years ago with the advent of ChatGPT and the AI Revolution, will differ significantly from those in the previous technology cycle. While established names remain relevant, her focus is increasingly on opportunities beyond the MAG7.
The discussion also touched on market trends for 2025, highlighting a significant focus on AI infrastructure. Pleydell-Bouverie indicated that this year has seen a concentrated effort on building out the necessary compute infrastructure before monetization can occur. This infrastructure encompasses not only silicon but also semiconductor equipment and networking components, which are essential for scaling AI capabilities. She pointed out that while model providers are often viewed as commoditized, there is an ongoing arms race to develop large foundation models. Engineering tools that facilitate the integration of AI into businesses and various applications are also critical, although currently, most value resides within the AI infrastructure layer.
Looking ahead, Pleydell-Bouverie anticipates a shift in focus toward application layers where substantial disruption is expected. Numerous AI startups are targeting established players like Salesforce, indicating a competitive landscape. Despite this shift, she believes that the importance of NVIDIA in AI infrastructure remains strong. She described its role as pivotal, suggesting that it is positioning itself to become the operating system for an emerging landscape of AI-infused software set to launch in the coming year. Pleydell-Bouverie cautioned against viewing the company merely as a chip provider; instead, she argued that understanding its strategic positioning within this technological paradigm shift is crucial for investors.
Her insights reflect a broader narrative about Silicon Valley’s ongoing transformation and its implications for investors looking to navigate this rapidly evolving technological landscape effectively. As tech stocks become increasingly popular, we’re here with a list of the 10 best tech stocks for long-term investment.
Methodology
We first sifted through the stock screeners and internet lists to compile a list of the top mega-cap tech stocks. We then selected the 10 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q3 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A wide view of an Apple store, showing the range of products the company offers.
Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 158
Apple Inc. (NASDAQ:AAPL) is a leading technology company known for its cutting-edge products. Its most popular products include the iPhone, iPad, Mac computers, Apple Watches, and AirPods. Its dedication to user experience has cultivated a loyal customer base, and its subscription services, including Apple Music and Apple TV+, are experiencing significant growth.
It has made strides in the AI sector with the introduction of Apple Intelligence, a system designed to enhance user experience across its devices. Launched in June, Apple Intelligence aims to deliver personalized AI experiences through generative models that integrate seamlessly into iOS 18, iPadOS 18, and macOS Sequoia.
The company’s collaboration with Amazon Web Services (AWS) marks a pivotal move in its AI strategy. In December, Apple Inc. (NASDAQ:AAPL) reported that it is currently using AWS’ custom AI chips for services like search. By utilizing AWS’ Trainium 2 chips for pre-training its models, Apple Inc. (NASDAQ:AAPL) enhances its AI capabilities while positioning itself competitively against major players like Microsoft Azure and Google Cloud. This partnership underscores the company’s commitment to leveraging external expertise while maintaining its focus on privacy and security.
Mar Vista Strategic Growth Strategy stated the following regarding Apple Inc. (NASDAQ:in) in its Q3 2024 investor letter:
“Apple Inc. (NASDAQ:AAPL) stock was strong in the quarter as investors viewed the company’s generative AI roadmap and iPhone 16 product cycle positively. The market was reminded of the strength of the Apple ecosystem as management demonstrated how generative AI solutions would be integrated into its iOS 18 operating system, which was broadly released in the iPhone 16 late in calendar Q3. We believe Apple’s generative AI-enabled products should spur a meaningful iPhone upgrade cycle and create new avenues of monetization through its app store and advertising offerings. We believe this will support intrinsic value growth that will range between high single digits and low double-digits over our investment horizon.”
Overall AAPL ranks 6th on our list of the best tech stocks for long term investment. As we acknowledge the potential of AAPL as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. 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.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.
