In this article, we will take a look at the 15 Best FAANG Stocks to Buy According to Hedge Funds.
FAANG stands for Facebook (now Meta Platforms), Apple, Amazon, Netflix, and Google, five of the most significant American tech companies. The phrase was made popular in 2013 by Jim Cramer, who used it to highlight a collection of tech stocks that were performing exceptionally well and seemed to be gaining momentum. It was only “FANG” at first, but in 2017, Apple was added owing to its similar size and market influence.
These companies have an enormous bearing on the global economy, are renowned for innovation, and dominate their respective industries. These days, FAANG companies, which were first lumped together owing to their robust stock market performance and growth potential, have gained popularity as a shorthand for US tech heavyweights.
In recent years, tech companies have served as a haven for the stock market at different points, including during the COVID-19 pandemic. In that regard, Todd Rosenbluth, director of research at VettaFi, stated that the broadest bets on technology are also the broadest bets on a robust US stock market.
While Rosenbluth acknowledges that the tech industry was viewed as a somewhat safe sanctuary for investors during COVID, 2020 also saw an abrupt increase in reliance on technology, which resulted in a boom in the tech sector that was unlike any other. Despite a decline in 2022, he claimed that the development of AI and the growth of the chip industry, which was led by NVIDIA, had kept the tech sector a rather stable grower.
Furthermore, Mark Malek, the CIO of Siebert Financial, stated in an interview with CNBC on May 30 that he continues to believe tech and communication stocks, particularly those that power the larger tech sector, can be held for the long run. Notably, he views AI as a significant long-term opportunity and likened it to other technological revolutions like the PC and software revolutions.
Our Methodology
For this list, we noted down all stocks that comprise FAANG. However, we also added stocks that, although not part of the original FAANG group, possess valuations and influence that position them at the forefront of the tech industry. These tech stocks were ranked based on the number of hedge fund investors that hold stakes in them, as of Q1 2025.
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).
15. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 104
Tesla, Inc. (NASDAQ:TSLA) ranks among the best FAANG stocks to buy according to hedge funds. On June 27, TD Cowen maintained its $330 price target and Buy rating on Tesla, Inc. (NASDAQ:TSLA), ahead of the electric vehicle manufacturer’s second-quarter delivery report.
From its initial prediction of 400,000 vehicles, the firm lowered its Q2 delivery projection to 362,000. While forecasts for Europe were largely the same, the adjustment reflected lower delivery expectations in China and the US, which were somewhat offset by other international markets. Even with the decrease, the updated delivery estimate is still greater than the 337,000 vehicles that Tesla, Inc. (NASDAQ:TSLA) shipped in the first quarter of 2025.
Based on the lower delivery prediction, the firm also decreased its second-quarter earnings per share estimate from $0.37 to $0.33. That said, TD Cowen stuck to its longer-term earnings forecasts for the company.
Based in Austin, Texas, Tesla, Inc. (NASDAQ:TSLA) is a well-known clean energy company that is best known for its electric vehicles (EVs). In addition to designing, producing, and marketing EVs, Tesla also offers solar panels, solar shingles, and energy storage devices.
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