Earlier on August 19, Erik Woodring of Morgan Stanley joined CNBC’s ‘The Exchange’ to discuss the most under-owned tech stocks and what’s behind the bifurcation in the sector. Woodring believes that mega-cap tech is under-owned in the market, as Morgan Stanley revealed that these stocks are the most under-owned by actively managed funds in over 16 years. The gap between the portfolio weightings of these stocks and their weightings in the S&P 500 index widened significantly in the second quarter. Despite this under-ownership, Morgan Stanley suggested it could actually be a good thing for the sector. Woodring noted that actively managed portfolios have plausible reasons to be underweight, such as tepid top-line growth, a perceived lack of an AI strategy, and possible pressure from tariffs.
Woodring explained the broader context, stating that most mega caps are generally under-owned relative to their large weighting in the S&P 500 because owning too many can lead to over-concentration. Consequently, active managers are naturally underweight these stocks. Shifting to the broader theme of active portfolios lagging the benchmark, Woodring confirmed that the degree of relative underweighting has changed throughout the year. Overall, mega-cap tech is under-owned on average by about 1.4% exiting the second quarter, an increase from 1.15% exiting the first quarter, suggesting that perhaps a return to a more even distribution may occur.
That being said, we’re here with a list of the 14 best NASDAQ stocks to buy according to hedge funds.
Our Methodology
We sifted through the Finviz stock screener to compile a list of the top NASDAQ stocks. We then selected the 14 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 Q2 2025. The hedge fund sentiment was sourced from Insider Monkey’s database.
Note: All data was sourced on September 30.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
14 Best NASDAQ Stocks to Buy According to Hedge Funds
14. Regeneron Pharmaceuticals Inc. (NASDAQ:REGN)
Number of Hedge Fund Holders: 73
Regeneron Pharmaceuticals Inc. (NASDAQ:REGN) is one of the best NASDAQ stocks to buy according to hedge funds. On September 26, Evkeeza (evinacumab-dgnb), an ANGPTL3 antibody developed by Regeneron Pharmaceuticals, received an extended indication approval from the US FDA for the treatment of children from age 1 to less than 5 years old with homozygous familial hypercholesterolemia/HoFH.
Evkeeza is used as an adjunct to diet, exercise, and other lipid-lowering therapies. HoFH is an ultra-rare, inherited condition and the most severe form of familial hypercholesterolemia, affecting ~1,300 people in the US. It results in dangerously high levels of low-density lipoprotein cholesterol/LDL-C, usually >400 mg/dL, putting patients at risk for premature atherosclerotic disease and cardiac events even in their teenage years.
Evkeeza was initially approved in 2021 for adults and adolescents aged 12 years and older with HoFH, based on a placebo-controlled trial showing it could lower LDL-C by about 50% compared to placebo when added to standard lipid-lowering therapies. The indication was subsequently extended in 2023 for children aged 5 to 11. All FDA submissions for Evkeeza were evaluated under Priority Review.
Regeneron Pharmaceuticals Inc. (NASDAQ:REGN) discovers, invents, develops, manufactures, and commercializes medicines for treating various diseases worldwide.
13. MongoDB Inc. (NASDAQ:MDB)
Number of Hedge Fund Holders: 75
MongoDB Inc. (NASDAQ:MDB) is one of the best NASDAQ stocks to buy according to hedge funds. On September 16, MongoDB announced the launch of MongoDB AMP, which is an AI-powered Application Modernization Platform. The platform is designed to help enterprises transform legacy applications quickly into modern, scalable services, thereby reducing technical debt and speeding innovation.
MongoDB AMP combines an AI-powered software platform, a proven delivery framework, and experienced AMP delivery engineers to guide the implementation. MongoDB, with its flexible document model and architecture built for continuous change, serves as the foundation of the platform. By using the AMP tooling and MongoDB’s framework, customers have seen tasks like code transformation sped up by 10x or more, with overall modernization projects being accelerated by 2−3 times.
Enterprises are burdened by critical but outdated legacy applications, which are expensive to maintain, difficult to adapt for modern use cases like GenAI, and pose security and compliance risks due to their rigid data foundations and tech stacks. According to the Consortium for Information & Software Quality, the cost of technical debt in the US has been estimated at ~4 trillion dollars. MongoDB AMP offers a transformative approach to modernization, contrasting with traditional methods that involve multi-year consulting engagements or merely lift & shift migrations from one relational database to another.
MongoDB Inc. (NASDAQ:MDB) provides a general-purpose database platform worldwide. The company was formerly known as 10gen and changed its name to MongoDB in August 2013.
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