In this article, we discuss 12 stocks most bought by hedge funds. If you want to skip our discussion on the stock market landscape and the performance of popular hedge funds, head over to 5 Stocks Most Bought By Hedge Funds.
In 2023, the world's top 20 hedge funds delivered significant returns of $67 billion, tripling the previous year's performance, as reported by LCH Investments in January 2024. TCI Fund Management, headed by billionaire Christopher Hohn, led the group with $12.9 billion in returns after fees. On average, the top 20 managers achieved a 10.5% gain in 2023, surpassing the industry's overall return of 6.4%. Multi-strategy hedge funds like Citadel, Millennium Management, and D. E. Shaw, known for using leverage, were the top three funds by lifetime gains. Despite representing only 4.6% of the industry's assets, these three firms generated 38.3% of the industry's returns over the past three years. Citadel, with $74 billion in gains since 1990, maintained its leading position in 2023, returning 15.3%, while also deciding to return approximately $7 billion to investors. Pershing Square, led by William Ackman, re-entered the rankings for the first time since 2015, securing the 20th position with $18.8 billion in returns since 2004, and achieving a return of 26.7% in 2023, outperforming the broader stock market. On the other hand, Bridgewater Associates and Caxton Associates were the only firms among the top 20 that posted losses. The strong performance in 2023 followed a challenging 2022 marked by market turbulence due to the war in Ukraine and Federal Reserve interest rate hikes. The top 20 hedge funds have collectively generated substantial profits, totaling $755.4 billion since their inception, surpassing their total managed assets of $655.5 billion, according to the research findings.
Brad Amiee, Director and Head of Research at LCH Investments, attributes the success of leading hedge funds in 2023 to the impressive performance of the stock market during the year. He noted that in addition to benefiting from the overall positive market conditions, many of these funds demonstrated particularly astute stock selection strategies. In a statement to Financial Times, Amiee said:
“You could argue that, since shorting is such a challenging sub-strategy, keeping things long-biased and having a concentrated portfolio of high quality positions has been the way to go.”
The robust performance of top financiers correlates with the overall stock market rally in 2023, particularly benefiting hedge funds that focus on specific stock picks. Many in the industry have heavily invested in the "Magnificent Seven" tech stocks—Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla. However, concerns are rising on Wall Street about the concentration of investments in these same companies. The data highlights a growing disparity in the hedge fund industry, with the top 20 firms managing just under 19% of the total $3.5 trillion assets but representing 46% of the sector's cumulative gains.
In 2024, global hedge funds are facing pressure to enhance returns due to a robust stock rally and increased bond yields, aiming to counteract investor outflows. Last year, investors withdrew a net $75 billion from hedge funds, following a significant outflow of $112 billion in 2022. Investors, seeking double-digit returns in 2024, are interested in credit, global macro, commodity, and equity long/short strategies. Some potential approaches include adopting "barbell" portfolios and exploring bond-trading strategies, given the potential impact of rising rates on refinancing costs for companies. Hedge funds focusing on diverse macroeconomic signals are also gaining attention, particularly as central banks are expected to adjust monetary policies.
Some of the most owned stocks by hedge funds include NVIDIA Corporation (NASDAQ:NVDA), Meta Platforms, Inc. (NASDAQ:META), and Microsoft Corporation (NASDAQ:MSFT).
Our Methodology
We scanned Insider Monkey’s database of 933 hedge funds as of the fourth quarter of 2023 and picked the top 12 companies with the highest number of hedge fund investors. These are the most owned stocks among hedge funds. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here).
A graph monitoring stocks in a modern financial institution.
12. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 120
Advanced Micro Devices, Inc. (NASDAQ:AMD) is a global semiconductor company that provides a range of products, including x86 microprocessors, graphics processing units (GPUs), accelerated processing units, chipsets, and data center GPUs. On January 30, Advanced Micro Devices, Inc. (NASDAQ:AMD) reported a Q4 non-GAAP EPS of $0.77, in-line with market estimates. The revenue of $6.2 billion climbed 10.7% year-over-year, beating Wall Street consensus by $60 million.
According to Insider Monkey’s fourth quarter database, 120 hedge funds were bullish on Advanced Micro Devices, Inc. (NASDAQ:AMD), compared to 110 funds in the prior quarter. Ken Fisher’s Fisher Asset Management is the largest stakeholder of the company, with 28.3 million shares worth $4.18 billion.
In addition to NVIDIA Corporation (NASDAQ:NVDA), Meta Platforms, Inc. (NASDAQ:META), and Microsoft Corporation (NASDAQ:MSFT), Advanced Micro Devices, Inc. (NASDAQ:AMD) is one of the most owned stocks by hedge funds.
Jackson Peak Capital stated the following regarding Advanced Micro Devices, Inc. (NASDAQ:AMD) in its fourth quarter 2023 investor letter:
“On the long side of the portfolio, a core theme we remain invested behind is the data center infrastructure buildout and AI chips arms race that we’ve discussed since our first letter in Q2. Some skepticism has crept into the market, and it’s understandable given the huge ramp in 2023. However, our research continues to suggest 2023 was the start of a multi-year platform shift. Value will accrue to varying segments of the AI value chain at different parts of the cycle. We continue to see value in the “boots on the ground” winners in the data center buildout (Vertiv, Modine Manufacturing, Celestica). Our positioning in AI semiconductor companies (NVDA and Advanced Micro Devices, Inc. (NASDAQ:AMD)) has ebbed and flowed given we are cognizant (perhaps too much so) that these names are crowded positions across investor style types. We’ve done well in these chip stocks since inception and NVDA is currently a long, and we’re trying to “let winners run” while using sizing to risk manage these names due to the market-wide positioning bias in semiconductors.”
11. Uber Technologies, Inc. (NYSE:UBER)
Number of Hedge Fund Holders: 129
Uber Technologies, Inc. (NYSE:UBER), an American mobility giant, is one of the most owned stocks by hedge funds. On February 21, Uber announced a collaboration with Mitsubishi Electric and robotics company Cartken to introduce food delivery using autonomous robots in select areas of Tokyo, Japan, beginning the next month. Cartken's Model C robots, equipped with AI and computer vision technologies for sidewalk navigation, will facilitate UberEats deliveries in this partnership. Mitsubishi Electric will oversee the operations, aiming to address Japan's logistics challenges due to an aging population and workforce shortage.
According to Insider Monkey’s fourth quarter database, 129 hedge funds were long Uber Technologies, Inc. (NYSE:UBER), compared to 146 funds in the preceding quarter. D E Shaw is the biggest stakeholder of the company, with 14.4 million shares worth $886 million.
RiverPark Large Growth Fund stated the following regarding Uber Technologies, Inc. (NYSE:UBER) in its fourth quarter 2023 investor letter:
“Uber Technologies, Inc. (NYSE:UBER): UBER was a top contributor in the quarter following better than expected 3Q23 earnings and 4Q23 guidance. Gross bookings of $35.3 billion were up 21% year over year. Mobility gross bookings of $17.9 billion grew 30% over last year driven by a combination of product innovation and driver availability. Delivery gross bookings of $16 billion were up 16% from last year and continued to be strong throughout the quarter. 1Q Adjusted EBITDA of $1.1 billion, up $576 million year over year, was better than management’s guidance of $1 billion, and the company generated $900 million of free cash flow, up from $358 million last year. Management guided to continuing growth in 4Q Gross Bookings (23.5% growth) and Adjusted EBITDA (of $1.2 billion).
UBER remains the undisputed global leader in ride sharing, with a greater than 50% share in every major region in which it operates. The company is also a leader in food delivery, where it is number one or two in the more than 25 countries in which it operates.1 Moreover, after a history of losses, the company is now profitable, delivering expanding margins and substantial free cash flow. We view UBER as more than a ride sharing and food delivery service; we also see it as a global mobility platform with 142 million users (by comparison, Amazon Prime has 200 million members) and the ability to penetrate new markets of on-demand services, such as package and grocery delivery, travel, and hourly worker staffing. Given its $5.2 billion of unrestricted cash and $5.1 billion of investments, the company today has an enterprise value of $128 billion, indicating that UBER trades at 21x our estimates of next year’s free cash flow.”
10. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 131
Salesforce, Inc. (NYSE:CRM) is a global provider of customer relationship management (CRM) technology, connecting companies and customers worldwide. Salesforce, Inc. (NYSE:CRM) is one of the most owned stocks by hedge funds. On February 28, the company declared a quarterly dividend of $0.40 per share. The dividend is payable on April 11, to shareholders on record as of March 14. The company also raised its share buyback plan by $10 billion.
According to Insider Monkey’s fourth quarter database, 131 hedge funds were bullish on Salesforce, Inc. (NYSE:CRM), compared to 122 funds in the last quarter. Harris Associates is a prominent stakeholder of the company, with 4 million shares worth $1 billion.
Polen Focus Growth Strategy stated the following regarding Salesforce, Inc. (NYSE:CRM) in its fourth quarter 2023 investor letter:
“In the fourth quarter, the top relative and absolute contributors to the Portfolio’s performance were Netflix, ServiceNow, and Salesforce, Inc. (NYSE:CRM).
Salesforce has continued to grow its revenues at what we see as a healthy rate despite market concerns about the impact of the weaker macroeconomy on its business and penetration rates in its core CRM offering. Even its most mature and largest offerings, Sales Cloud and Service Cloud, are still growing revenue at double-digit rates. In addition, management realized that their cost structure, especially in salespeople, had gotten too bloated. Over the past year and a half, the company has run a much more streamlined expense structure that has led to strong operating margin expansion and earnings growth. Importantly, we do not feel Salesforce has cut into its innovation or sales muscle through these cost cuts but has eliminated unnecessary excess fat from the organization.”
9. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 131
Apple Inc. (NASDAQ:AAPL) is one of the most owned stocks by hedge funds, ranking 9th on our list. Apple's cancellation of its electric vehicle project, known as Project Titan, is seen by Morgan Stanley as an opportunity to redirect resources towards generative artificial intelligence. Morgan Stanley analysts believe that the engineering talent, capital investments, and time initially allocated for the electric vehicle project can be more effectively utilized in developing Generative AI, enhancing Apple's competitive edge. Morgan Stanley views this strategic shift positively and maintained an Overweight rating with a $220 price target on Apple shares on February 28, emphasizing the potential benefits of advancing AI technologies.
According to Insider Monkey’s fourth quarter database, 131 hedge funds were bullish on Apple Inc. (NASDAQ:AAPL), compared to 134 funds in the prior quarter. Warren Buffett’s Berkshire Hathaway is the leading stakeholder of the company, with 905.5 million shares worth $174.3 billion.
Horizon Kinetics stated the following regarding Apple Inc. (NASDAQ:AAPL) in its fourth quarter 2023 investor letter:
“The full point is that if BYD has turned its attention from its domestic market to direct global competition, then other Chinese companies can do the same. The next most visible example of Chinese commercially applied technological prowess relates to the 2nd highest-weight company in the S&P 500, Apple Inc. (NASDAQ:AAPL).
In September 2023, Huawei Technologies introduced its Mate 60 Pro smartphone. It uses its own, internally developed 5G enabled chip that is apparently competitive with the Apple A17 chip. For practical purposes it has the functionality of the iPhone 15 Pro. This came as a great surprise – perhaps even shock – to the U.S. technology community, because four years ago the U.S. placed strict sanctions on China’s access to state-of-the-art semiconductor manufacturing technology…” (Click here to read the full text)
8. Mastercard Incorporated (NYSE:MA)
Number of Hedge Fund Holders: 141
Mastercard Incorporated (NYSE:MA), an American fintech giant, is one of the most owned stocks by hedge funds. On February 6, the company declared a quarterly dividend of $0.66 per share, in line with previous. The dividend is distributable on May 9, to shareholders on record as of April 9.
According to Insider Monkey’s fourth quarter database, 141 hedge funds were bullish on Mastercard Incorporated (NYSE:MA), compared to 140 funds in the earlier quarter. Charles Akre’s Akre Capital Management is the biggest stakeholder of the company, with 5 million shares worth $2.16 billion.
Ensemble Capital Management stated the following regarding Mastercard Incorporated (NYSE:MA) in its fourth quarter 2023 investor letter:
“Mastercard Incorporated (NYSE:MA) (7.21% weight in the Fund): Payment companies are data companies. As we discussed last quarter in our write up of Mastercard, merchants can generate significant value from analyzing payment data to better understand their customers. Mastercard has long built AI-based products to enhance payment security and provide merchants with rich data analytics. In December, they rolled out Muse, a new online shopping companion that merchants who utilize certain Mastercard services can install on their own websites.
Muse seeks to replicate the in store experience of working with a salesclerk by allowing the customer to use natural language to browse products. Online shopping already works well if you know exactly what you are looking for, but Muse is striving to help customers find things to buy even when they aren’t sure what they are looking for.
Mastercard (7.21% weight in the Fund): In late October, Mastercard reported earnings that investors interpreted as pointing to a near term slowdown in payment growth. The stock fell 5.6% on the day. By the end of the next week, the stock had recovered its losses and went on to reach a new all time high on the last day of the year. But the 7.9% gain on the quarter slightly trailed the S&P 500.”
7. Visa Inc. (NYSE:V)
Number of Hedge Fund Holders: 162
Visa Inc. (NYSE:V) ranks 7th on our list of the stocks most owned by hedge funds. On February 12, Visa expanded digital wallet capabilities in its Commercial Pay B2B products, developed with Conferma Pay. This allows financial institutions to integrate virtual corporate cards into employees' digital wallets, enhancing convenience and security. The expansion covers the Latin America & Caribbean region, introducing the Visa Commercial Pay Mobile app with configured payment controls.
According to Insider Monkey’s fourth quarter database, 162 hedge funds were bullish on Visa Inc. (NYSE:V), compared to 167 funds in the last quarter. Chris Hohn’s TCI Fund Management is the biggest stakeholder of the company, with 16.8 million shares worth $4.3 billion.
In its October 2023 investor letter, Lakehouse Capital stated the following regarding Visa Inc. (NYSE:V):
“Visa Inc. (NYSE:V) reported a strong result with net revenue increasing 11% year-on-year to $8.6 billion and non-GAAP earnings per share increasing by 21% to $2.33. As has been the case for many years now, the scalable nature of the business allows for revenue growth to outpace its costs, which places the company in a good position to navigate through this inflationary period. The network continues to grow, with credentials and merchant locations up 7% and 17%, respectively. Cross-border travel-related spend also maintained its robust growth, increasing 26% year-on-year while Visa Direct reported 7.5 billion transactions, up 19% year-on-year, progressing on penetrating categories such as cross-border remittances. Altogether, we’re pleased with how the business is tracking and remain positive on Visa’s outlook.”
6. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 166
On February 22, Alphabet Inc. (NASDAQ:GOOG) instructed suppliers to start manufacturing Pixel smartphones in India by the next quarter, aiming to diversify its supply chain away from China and expand its presence in the growing Indian smartphone market. The move is part of Google's goal to ship over 10 million Pixel smartphones in 2024. The manufacturing process will begin with the flagship Pixel 8 Pro in South India in the coming weeks, with phones expected to be produced in the April-June quarter. Google's decision aligns with a broader trend of tech companies adopting a 'China+2' strategy for better supply chain resilience. This move coincides with the Indian government's efforts to establish the country as a tech manufacturing hub by offering incentives and considering stricter import curbs.
According to Insider Monkey’s fourth quarter database, 166 hedge funds held stakes in Alphabet Inc. (NASDAQ:GOOG), compared to 163 funds in the last quarter. Ken Fisher’s Fisher Asset Management is the biggest stakeholder of the company, with 45.2 million shares worth $6.3 billion.
Like NVIDIA Corporation (NASDAQ:NVDA), Meta Platforms, Inc. (NASDAQ:META), and Microsoft Corporation (NASDAQ:MSFT), Alphabet Inc. (NASDAQ:GOOG) is also one of the most owned stocks by hedge funds.
The FPA Crescent Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its fourth quarter 2023 investor letter:
“Alphabet Inc. (NASDAQ:GOOG) continued going from strength to strength during 2023 despite concerns that competition may infringe on the company’s dominant position in Search. Thus far, Alphabet has continued to hold its own, and we look forward to seeing how the company incorporates further AI developments across the Alphabet ecosystem. Lastly, we are hopeful that the impending arrival of a new CFO will bring a renewed focus on efficiency – an area where we believe Alphabet has ample room for improvement.”
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Disclosure: None.12 Stocks Most Bought By Hedge Fundsis originally published on Insider Monkey.
