We recently compiled a list of the 8 Best Socially Responsible Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where QUALCOMM Incorporated (NASDAQ:QCOM) stands against other best socially responsible stocks to buy according to hedge funds.

Socially responsible companies are businesses that integrate social and environmental considerations into their core operations and decision-making processes. One of the key characteristics of socially responsible companies is their focus on environmental stewardship and they actively work to reduce their environmental impact by implementing sustainable practices, reducing waste, conserving resources, and minimizing carbon emissions.

Another important aspect of socially responsible companies is their focus on social equity. These companies promote fair labor practices, support community development, and respect human rights. This includes providing fair wages, safe working conditions, and opportunities for employee growth and development.

Ethical governance is also a cornerstone of socially responsible companies. They maintain high standards of transparency, accountability, and integrity in their operations and decision-making processes. This includes ethical business practices, fair competition, and responsible marketing.

Investors are drawn to socially responsible companies because of the alignment with their personal values. Many investors are driven by a desire to make a positive impact on society. By investing in socially responsible companies, they can support businesses that share their values and contribute to social and environmental causes they care about.

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The global shift toward sustainable investing is gaining significant traction. The Sustainability Megatrends Report by Cushman & Wakefield highlighted that 60% of global investors reported higher performance yields from Environmental, Social, and Governance (ESG) investments. This positive financial outcome is driving a surge in demand for ESG funds, with 78% of investors willing to pay higher fees for these products. One of the most significant trends is that Institutional investors are increasingly recognizing the financial advantages of ESG-focused investments, leading to a transformation in how companies allocate capital. Therefore, strong ESG performance is becoming a critical factor in attracting investment, with companies that excel in this area seeing a surge in capital inflows.

Mandatory ESG reporting is another critical trend, as governments and regulators worldwide are enforcing greater transparency in environmental and social impact metrics. Companies that integrate these reporting standards into their strategies are better positioned to manage risks and seize new opportunities. The global energy transition and decarbonization efforts are also reshaping industries, with companies investing heavily in renewable energy and implementing strategies to reduce their carbon footprints.

Investors are increasingly drawn to socially responsible companies due to the potential for risk mitigation, long-term value, and alignment with personal values.

Our Methodology

To compile our list of the 8 best socially responsible stocks to buy according to hedge funds, we sifted through internet rankings to find 20 socially responsible companies. We then used Insider Monkey’s Hedge Fund database to rank 8 stocks according to the largest number of hedge fund holders, as of Q3 2024. The list is sorted in ascending order of hedge fund sentiment.

Why do we care about what hedge funds do? 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).

QUALCOMM Incorporated (NASDAQ:QCOM)

Number of Hedge Fund Investors: 74

QUALCOMM Incorporated (NASDAQ:QCOM) is a prominent semiconductor and telecommunications company renowned for its advancements in wireless technology. The company generates revenue by licensing its intellectual property and selling semiconductors for mobile devices and IoT applications. QUALCOMM Incorporated’s (NASDAQ:QCOM) customers include smartphone manufacturers and technology firms.

QUALCOMM Incorporated (NASDAQ:QCOM) is capitalizing on the increasing demand for on-device artificial intelligence (AI) and edge computing. The company views edge AI as a revolutionary technology that improves the human-computer interface by delivering context, immediacy, and personalization while ensuring privacy and security. At the recent Snapdragon Summit, QUALCOMM Incorporated (NASDAQ:QCOM) presented its vision for AI-enabled edge computing and announced collaborations with Meta to support Llama 3.2 on Snapdragon-powered devices and with Amazon to create a cloud-to-edge solution for customizing and deploying AI models. The company also unveiled the Snapdragon 8 Elite which features a second-generation custom Oryon CPU and a redesigned hexagon NPU that enables advanced AI functionality in mobile devices.

QUALCOMM Incorporated (NASDAQ:QCOM) is also broadening its presence in the Industrial IoT (IIoT) market with the introduction of the Qualcomm IQ Series and the IoT Solutions Framework. These offerings are designed for next-generation industrial edge applications, providing tools for inspection, automation, robotics, and advanced computer vision. Additionally, the company has enhanced connectivity and computing power in its Networking Pro A7 Elite Platform to strengthen its capabilities in edge networking and reinforce its leadership in industrial and IoT solutions.

Overall, QCOM ranks 5th on our list of the best socially responsible stocks to buy according to hedge funds. While we acknowledge the potential of QCOM as an investment, our conviction lies in the belief that 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 QCOM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.