In this article, we will take a look at the 16 most promising QQQ stocks according to hedge funds. To skip our analysis of the recent trends, and market activity, you can go directly to see the 5 Most Promising QQQ Stocks According to Hedge Funds.
The Invesco QQQ Trust (NASDAQ:QQQ) is an exchange-traded fund that tracks the performance of the Nasdaq-100 Index. The Index includes 100 of the largest domestic and international nonfinancial companies listed on the Nasdaq Stock Market based on market capitalization. The Index is rebalanced quarterly and reconstituted annually. As of December 18, nearly half of the Fund portfolio was allocated to the Information Technology sector with 49.7% weightage, followed by 14.9% for Communication Services, and 14.6% for Consumer Discretionary.
The fund is designed to provide investors with exposure to the largest and most actively traded stocks on the NASDAQ. The Invesco QQQ Trust (NASDAQ:QQQ) is one of the most popular ETFs in the United States and had nearly $227 billion in assets under management as of December 18. Over the past decade, the Invesco QQQ Trust (NASDAQ:QQQ) has outperformed the S&P 500 nine out of ten times.
The Index has outperformed the market so far this year supported by several major technological advancements as well as operational measures undertaken by its components. Recent advancements in generative artificial intelligence is one of the biggest developments in the technology space this year with significant potential to disrupt nearly all aspects of our lives in the upcoming years. GPU-maker NVIDIA Corporation (NASDAQ:NVDA) has been the one of the biggest beneficiaries of this advancement so far, with share price up nearly 236% year-to-date. The Nasdaq-100, as a whole, has gone up nearly 54% year-to-date, compared to nearly 24% for the S&P 500 Index. You can read more about the recent interest rate cuts which have led to the latest rally in the stock markets here.
Our list of 16 most promising QQQ stocks according to hedge funds includes some of the most notable names in the stock markets and includes several trillion dollar companies. These companies account for 51.5% of the ETF portfolio weightage, as of December 18. The shares of these companies have benefited from multiple factors recently, including cost cutting measures, AI revolution, and macroeconomic factors such as slowdown in interest rate increases, among others. The list includes chipmaker and hardware beneficiary of AI boom, NVIDIA Corp (NASDAQ:NVDA), and two trillion-dollar software & internet companies, Alphabet Inc. (NASDAQ:GOOGL) and Microsoft Corporation (NASDAQ:MSFT), competing for the leadership position on the search engine and software side of things.
Our list also includes other leading technology companies such as Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), and Elon Musk’s electric vehicle company, Tesla, Inc. (NASDAQ:TSLA), among others.
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Methodology
We sifted through holdings of the Invesco QQQ Trust (NASDAQ:QQQ) and sourced the hedge fund sentiment for each stock from Insider Monkey’s database. As of September 30, 2023, Insider Monkey tracks 910 elite money managers. We narrowed down our selection to stocks that were the most widely held by hedge funds. Finally, we ranked our picks in ascending order of the number of hedge funds that have positions in them.
T-Mobile US, Inc. (NYSE:TMUS) is a wireless network operator based in Bellevue, Washington delivering an advanced 4G LTE and a transformative nationwide 5G network through its flagship brands, T-Mobile, and Metro by T-Mobile. It had nearly 118 million total customers as of September 30, 2023.
T-Mobile US, Inc. (NYSE:TMUS) has been aggressively working on its plan to return value to stockholders. During Q3 2023, the company repurchased $2.7 billion worth of its shares and introduced a dividend for the first time in the company’s history. The remaining authorization for additional stock repurchases and dividends through December 2024 is $17.5 billion.
As of Q3 2023, 79 of the 910 hedge funds tracked by Insider Monkey owned shares of T-Mobile US, Inc. (NYSE:TMUS), valued at $11.0 billion. Its largest shareholder was Warren Buffett’s Berkshire Hathaway with ownership of 5.2 million shares valued at $734 million.
In its “ClearBridge Dividend Strategy” Q3 2023 investor letter, ClearBridge Investments, an investment management company, made the following comments about T-Mobile US, Inc. (NYSE:TMUS):
“T-Mobile is the best-in-class player in the wireless space, delivering the strongest growth with the lowest cost structure and the best consumer proposition. T-Mobile’s strength is rooted in its advantaged competitive position. Its superior spectrum holdings enable it to provide better wireless service at meaningfully lower cost. T-Mobile’s annual capital expenditures run about $10 billion, on the order of half the amount its peers must spend. Due to its lower cost structure, T-Mobile can undercut its competitors on price while still generating compelling profitability and returns. This combination — superior service at lower prices — has enabled TMobile to outgrow its competition. In the three years since completing its merger with Sprint, T-Mobile has grown its post-paid subscriber base by about 22%. Over the same period, AT&T’s has grown by about 14%, while Verizon’s by less than 5%. [. . .] Free cash flow in 2023 is expected to come in around $13.5 billion, up from less than $8 billion last year. In 2024 free cash flow is expected to grow by over 20% to approximately $17 billion — providing a 10% yield based on today’s stock price.”
Based in Austin, Texas, Tesla, Inc. (NASDAQ:TSLA), designs, develops, manufactures, sell and leases fully electric vehicles and energy generation and storage solutions. Its current portfolio of products includes Model 3 and Model S sedans, Model Y, Model X SUVs, and Cybertruck, while upcoming products include Tesla Roadster and Tesla Semi – a light commercial vehicle.
Tesla, Inc. (NASDAQ:TSLA) produced 430,488 vehicles in Q3 2023 and delivered more than 435,000 vehicles during the same period. The company has six large scale manufacturing facilities across the world, including its first plant in California, and gigafactories across Nevada, New York, Shanghai, Texas, and Berlin.
Tesla, Inc. (NASDAQ:TSLA) started delivering its long-awaited Cybertruck with a delivery event held its gigafactory in Austin, Texas, on November 30. According to crowdsourcing data, more than 2.0 million Tesla Cybertruck have been preordered.
Tesla, Inc. (NASDAQ:TSLA) shares were held by 81 hedge funds with total value of $5.8 billion, as of September 30. Cathie Wood’s ARK Investment Management, and Philippe Laffont’s Coatue Management were the biggest shareholders of the company with ownership of nearly $1.0 billion worth of shares, each.
Based in Norwalk, Connecticut, Booking Holdings Inc. (NASDAQ:BKNG), is a leading provider of online travel and related services with a presence in more than 220 countries and territories across the world. The company provides its services primarily through six online platforms: Booking.com, Priceline, Agoda, Rentalcars.com, KAYAK and OpenTable. It boasts more than 28 million listings of hotels, homes, apartments, and other unique places to stay across its platforms.
As of Q3 2023, 81 of the 910 hedge funds tracked by Insider Monkey held shares of Booking Holdings Inc. (NASDAQ:BKNG), worth $8.0 billion. Its largest shareholder was Arrowstreet Capital with ownership of 0.5 million shares valued at $1.6 billion.
RiverPark Advisors, an investment advisory firm, made the following comments about Booking Holdings Inc. (NASDAQ:BKNG) in its Q3 2023 investor letter:
“Booking is the world’s leader in online travel, operating in 200 countries with brands including Booking.com, priceline.com, agoda.com, Kayak, Rentalcars.com and OpenTable. The company has been a dominant on-line travel agency for more than a decade with a high-margin business model that requires limited capital expenditures, typically less than 3% of revenue, producing $6.2 billion of free cash flow for 2022 and $7.2 billion expected for 2024. The company has used its free cash flow for episodic acquisitions as well as to return cash to shareholders. BKNG is well positioned in travel as the largest player in online lodging bookings and the second largest player in alternative accommodations.”
New York-based Datadog, Inc. (NASDAQ:DDOG) provides a monitoring platform for cloud applications. Its SaaS platform integrates and automates infrastructure monitoring, application performance monitoring, log management, real-user monitoring, and many other capabilities to provide unified, real-time observability and security for the entire technology stack.
On November 7, Datadog, Inc. (NASDAQ:DDOG) released its financial results for Q3 2023. Its revenue increased by 25% y-o-y to $548 million while it generated a net income of $23 million, compared to a net loss of $26 million. Its normalized EPS of $0.45 exceeded consensus estimates by $0.11.
On December 7, Stifel analyst Brad Reback upgraded Datadog, Inc. (NASDAQ:DDOG) to ‘Buy’ from ‘Hold’ and raised the price target for its shares to $140 from a previous price target of $98.
According to the Insider Monkey data on 910 leading hedge funds, 83 hedge funds were long Datadog, Inc. (NASDAQ:DDOG) shares as of Q3 2023. Marshall Wace LLP was the largest hedge fund shareholder with ownership of 3.1 million shares valued at $282 million.
Intuit Inc. (NASDAQ:INTU) is a global financial technology platform allowing consumers and small businesses to manage their finances, get and retain customers, save money, pay off debt and do their taxes with ease, among other solutions. Its platforms include TurboTax, Credit Karma, QuickBooks, and Mailchimp and serve over 100 million customers.
On November 28, Intuit Inc. (NASDAQ:INTU) released its financial results for the quarter ended October 31, 2023. Its total revenue increased by 15% y-o-y to $3.0 billion, while it reported a net income of $241 million. It reported a normalized EPS of $2.47 for the quarter, $0.49 more than the analyst consensus. The company also declared a quarterly cash dividend of $0.90 per share, which represents a 15% increase compared to the previous year.
Following the earnings release, Mizuho analyst Siti Panigrahi raised the price target for Intuit Inc. (NASDAQ:INTU) shares to $625 from $600 and maintained a ‘Buy’ rating.
As of Q3 2023, 86 of the 910 hedge funds tracked by Insider Monkey held Intuit Inc. (NASDAQ:INTU) shares valued at a combined total of $6.2 billion. Ken Fisher’s Fisher Asset Management was its largest hedge fund shareholder with ownership of 2.8 million shares valued at $1.5 billion.
San Jose, California-based Broadcom Inc. (NASDAQ:AVGO) is a global technology leader that designs, develops, and supplies semiconductor and infrastructure software solutions. Its solutions include data center networking and storage, enterprise, mainframe, and cybersecurity software focused on automation, monitoring and security, smartphone components, telecoms, and factory automation.
On May 26, 2022, Broadcom Inc. (NASDAQ:AVGO) announced that it had agreed to acquire VMware, Inc. (NYSE:VMW), a leading enterprise software solutions provider, in a cash and stock transaction valued at $61 billion. The transaction was finally closed on November 22, 2023.
Broadcom Inc. (NASDAQ:AVGO) released its fourth quarter and fiscal year ended October 29, 2023, on December 7. It posted strong results during the year, driven by investments in “accelerators and network connectivity for AI by hyperscalers”. The company also raised its quarterly dividend payout by 14% to $5.25 per share.
Like other stocks such as Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), and Microsoft Corporation (NASDAQ:MSFT), Broadcom Inc. (NASDAQ:AVGO) is among the 16 most promising QQQ stocks according to hedge funds.
Boise, Idaho-based Micron Technology, Inc. (NASDAQ:MU) is a leading semiconductor manufacturer providing memory and storage solutions. It delivers a portfolio of high-performance DRAM, NAND and NOR memory and storage products through Micron® and Crucial® brands.
In September, Micron Technology, Inc. (NASDAQ:MU) reported the financial results for the quarter ended August 31, 2023. It generated a revenue of $4.0 billion and a net loss of $1.4 billion. Normalized EPS of -$1.07 for the quarter, surpassed the consensus estimates by $0.11.
Following the earnings release, Rosenblatt analyst Hans Mosesmann reiterated a ‘Buy’ rating for Micron Technology, Inc. (NASDAQ:MU) shares while maintaining a $100 target price.
According to the Insider Monkey data on 910 leading hedge funds, 90 hedge funds were long Micron Technology, Inc. (NASDAQ:MU) shares as of Q3 2023, with the total shares held by hedge funds valued at $4.4 billion. Ken Griffin’s Citadel Investment Group was the largest shareholder on record with ownership of 8.1 million shares valued at $552 million.
Netflix, Inc. (NASDAQ: NFLX) is a leading provider of streaming entertainment services based in Los Gatos, California. It boasts more than 247 million paid memberships across more than 190 countries and offers a film and television series library through distribution deals as well as its own productions.
On October 18, Netflix, Inc. (NASDAQ:NFLX) released its financial results for Q3 2023. The company posted a revenue of $8.5 billion, which represents nearly 8% y-o-y growth, and a net income of $1.7 billion. It also added 8.8 million new paid members to its platform during the quarter which represents nearly 11% growth, nearly double the growth rate in Q3 2022.
Netflix, Inc. (NASDAQ:NFLX) is also making efforts to return capital to its shareholders through share repurchases. During the quarter, it repurchased nearly $2.5 billion worth of its shares and also increased the company’s buyback authorization by $10 billion.
On December 18, Morgan Stanley analyst Benjamin Swinburne raised the price target for Netflix, Inc. (NASDAQ:NFLX) shares to $550 from $475 and maintained an ‘Overweight’ rating for its shares.
Like other stocks such as Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), and Microsoft Corporation (NASDAQ:MSFT), Netflix, Inc. (NASDAQ:NFLX) is among the 16 most promising qqq stocks according to hedge funds.
Based in Santa Clara, California, Advanced Micro Devices, Inc. (NASDAQ:AMD) is a leading semiconductor company using high-performance computing, graphics, and visualization technologies to provide computing solutions for cloud, edge, and end devices.
On June 14, Advanced Micro Devices, Inc. (NASDAQ:AMD) unveiled new EPYC processors for cloud native and technical computing for data centers. The company also revealed its AI Platform strategy which includes MI300 Series accelerator family, as well as software solutions.
On October 10, Advanced Micro Devices, Inc. (NASDAQ:AMD) announced the signing of a definitive agreement to acquire Nod.ai to expand the company’s open AI software capabilities. Earlier this year in August, the company acquired Mipsology, and AI software company with proven expertise delivering AI software and solutions running on top of AMD adaptive computing silicon.
As of Q3 2023, 110 hedge funds tracked by Insider Monkey held shares of Advanced Micro Devices, Inc. (NASDAQ:AMD), worth $9.2 billion. Ken Fisher’s Fisher Asset Management is its largest hedge fund shareholder with ownership of 27.8 million shares valued at $2.9 billion.
Adobe Inc. (NASDAQ:ADBE) is a leading digital media and digital marketing solutions company based in California. Its software and cloud solutions are packaged into three cloud solutions: Adobe Creative Cloud, Adobe Document Cloud, and Adobe Experience Cloud.
On September 15, 2022, Adobe Inc. (NASDAQ:ADBE) announced that it had entered into an agreement to acquire Figma, a collaborative design platform, for $20 billion comprising half cash and half stock compensation.
The proposed merger faced significant scrutiny from multiple regulatory authorities including U.K. antitrust authority, the Competition Markets Authority, or CMA, and the European Commission which opened a full-scale investigation into the merger.
On December 18, Adobe Inc. (NASDAQ:ADBE) and Figma announced that the companies have mutually agreed to terminate their previously announced merger agreement. Adobe Inc. (NASDAQ:ADBE) will make a cash payment of $1.0 billion to Figma as a “termination fee”.
As of Q3 2023, Adobe Inc. (NASDAQ:ADBE) shares were held by 112 out of 910 hedge funds tracked by Insider Monkey with a total value of $8.2 billion. Its largest shareholder was Fisher Asset Management with ownership of nearly 4.5 million shares valued at $2.3 billion.
Apple Inc. (NASDAQ:AAPL) is a leading technology company focused on the designing, manufacturing, and marketing of smartphones, personal computers, tablets, wearables, and accessories, and sells a variety of related services. It released worldwide the latest version of its flagship smartphone titled iPhone 15 on September 22 earlier this year. Sales for the models have remained strong in the early period and analysts expect positive results from the release.
The quarterly revenue of Apple Inc. (NASDAQ:AAPL) once again declined by 1% on a y-o-y basis in the quarter ended September 30. The company posted a revenue of $89.5 billion and a net income of $23 billion, which translated to an adjusted EPS of $1.46.
As of Q3 2023, Apple Inc. (NASDAQ:AAPL) shares were held by 134 of the 910 hedge funds tracked by Insider Monkey with the total shares held by hedge funds valued at a whopping $179 billion. Warren Buffet’s Berkshire Hathaway was its biggest shareholder with ownership of 915.6 million shares valued at $157 billion.
In its Baron Technology Fund Q3 2023 investor letter, Baron Funds, an investment management firm, made the following comments about Apple Inc. (NASDAQ:AAPL):
“Despite [the] quarterly fluctuations in product sales, we are encouraged by several long-term trends, including: (1) revenue from higher-margin services like the App Store, iCloud, and Apple Pay, which are growing faster than the overall business, driving better revenue visibility and higher free-cash-flow (FCF) margins; (2) continued gains in global market share in smartphones, wearables, and other hardware categories; and (3) consistent returns of capital to shareholders via share repurchases and dividends. On top of these trends in the core business, Apple is thoughtfully investing in new categories like augmented reality, search, financial services, and streaming media content. We took advantage of weakness in the quarter to add to our position in Apple.”
