In this article, we will look at the 11 Most Promising Future Stocks According to Hedge Funds.
The past year has seen investors pour money into futuristic trends such as electric vehicles and AI. These trends have raised the question of whether regulators will slow their growth in 2025 or attain more space to run with a green signal from the government. Venture Capitalist Bradley Tusk appeared on CNBC to talk about the industries that are expected to thrive in 2025 and how policy changes could affect investments across these hot industries.
He said that while some of the policies on big tech might continue, we would likely see a friendlier climate towards M&A activity and new technology in fintech, healthcare tech, and energy. The various factors are thus coming together well, especially in the world of venture capital. While it has not been all that vibrant there in the past few years, things are starting to turn around now.
What Could the Future Look Like for AI?
However, Tusk said that he does not feel confident that the current administration would provide the necessary safety and security while also letting technology get competitive. He provides Internet 2.0 as evidence, saying that we still have to regulate social media while we are a decade and a half into this experiment now. While we have a good idea of how to regulate AI, the federal and state-level authorities have not been particularly competent at broadly regulating new technologies. If you leave it to the state, you will likely get 50 different intellectual and analytical frameworks on regulating AI, which becomes almost impossible for the companies to comply with. Tusk thus opines that we could really use some competent leadership at the federal level, as these factors might be a potential hindrance to the upside of this technology.
Talking further about the future of the AI industry, he said that people will likely continue to build an arms race in the area, and the momentum and excitement will continue irrespective of the circumstances. Companies in this area are so heavily invested that they have to keep investing no matter what. At the same time, AI is still a world of unfulfilled potential. There is a lot of talk about what it could be and how it could change the way we create new drugs, teach children, discover minerals, or anything else. But at some point, it has to go from a cool search engine and exciting potential idea to actual revenue and savings. Tusk said that this is the year it has to start being shown, as you can’t just forever continue investing for the potential that may come someday; at one point, the economics have to come in too.
READ ALSO: Recession Resistant Investing: 10 Best Grocery Stocks To Buy Now and 10 Best Stocks That Will Always Grow.
Outlook for the Crypto and Fintech Sectors
Talking about the crypto world and its potential future, Tusk said he expects regulations to be positive for the asset class. According to him, it couldn’t have been much worse over the last four years with Gary Gensler, the former chair of SEC, who was considerably anti-crypto. He expects the institution leaders of the current administration to be a lot more friendlier to crypto. That does not necessarily mean that the world would be happy with every signal crypto legislation that comes out, just that it is likely to be more reasonable.
Moving to the fintech industry, Tusk agreed that the last four years have been one with the reputation of being more heavy-handed in terms of legislation in the sector. There is a broad expectation that the fintech and banking industry would undergo a massive sweep of deregulation, at least administratively. If we are trying to read the tea leaves, it would likely happen if the deregulation could be done without legislation. But he didn’t express confidence about it happening if it requires legislation.
With these trends in mind, let’s examine the 11 most promising future stocks according to hedge funds.
A stock market data. Photo by Alesia Kozik on Pexels
Our Methodology
We sifted through stock screeners, financial media reports, and ETFs to compile a list of the most promising future stocks and then chose the top 11 with the highest number of hedge fund holders as of Q4 2024. We sourced the hedge fund sentiment data from Insider Monkey’s database. The list is ordered in ascending order of hedge fund sentiment.
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).
11 Most Promising Future Stocks According to Hedge Funds
11. Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Holders: 64
Palantir Technologies Inc. (NASDAQ:PLTR) builds and deploys software platforms that serve as central operating systems for customers. The company focuses on augmenting human intelligence and developing products for human-driven real-world data analysis. It ranks 11th on our list of the most promising future stocks as organizations worldwide are increasingly employing its technology to uncover human trafficking rings, unravel complex financial crimes, and more. Its commercial segment manages customers in non-government industries, while the government sector includes customers from the United States government and non-United States government agencies.
Palantir Technologies Inc. (NASDAQ:PLTR) is also making significant strides in AI. Its collaboration with Google Cloud to bolster its FedStart program has been received notably well, as it aims to deliver advanced AI solutions to American government agencies. The partnership has boosted investment sentiment for the company and resulted in the stock’s upward trajectory.
The company’s recent deal with NATO has proved to be another major catalyst for the stock, as the latter had adopted Palantir Technologies Inc.’s (NASDAQ:PLTR) AI-driven military system. Investors hailed the partnership as a key validation of the company’s technology, positioning it as a key player in the defense sector and enhancing its global trustworthiness. The company’s financial performance has further fueled investor optimism, with revenue rising to $2.87 billion last year.
10. QUALCOMM, Inc. (NASDAQ:QCOM)
Number of Hedge Fund Holders: 79
QUALCOMM Inc. (NASDAQ:QCOM) develops and commercializes foundational technologies for the wireless industry, including 3G, 4G, and 5G wireless connectivity and high-performance and low-power computing, including on-device AI. The company ranks on our list of the most promising future stocks because of its operations across various high-growth markets, including autonomous vehicles and smartphones. Its Snapdragon augmented reality technology is the next generation of mobile computing. The company continuously innovates to deliver intelligent computing with proven solutions that transform major industries.
On May 1, DBS analyst Fang Boon Foo maintained their bullish stance on QUALCOMM Inc. (NASDAQ:QCOM) and gave it a Buy rating. The analyst highlighted the company’s strong performance in fiscal Q1 2025, exceeding expectations across multiple segments. It also provided strong revenue guidance for fiscal Q2 2025, reflecting confidence in its future performance.
The analyst opined that QUALCOMM Inc.’s (NASDAQ:QCOM) leadership in the smartphone industry and strategic diversification into high-growth areas like automotive, IoT, 5G, and edge networking are key drivers of its positive outlook. It holds significant investment appeal because of its dividend growth and consistent capital return policy, and the extension of its collaboration with Apple until 2026 provides further earnings visibility and stability.
