In this article, we will take a look at the 5 best blue chip stocks to buy according to hedge funds. To see more such companies, go directly to 15 Best Blue Chip Stocks To Buy According to Hedge Funds.
5. Visa Inc. (NYSE:V)
Number of Hedge Fund Holders: 173
In April, payments giant Visa Inc. (NYSE:V) posted fiscal second quarter results, which beat analyst estimates for both earnings and revenue. Adjusted EPS in the period came in at $2.09, beating the consensus estimate of $1.99. Revenue in the quarter came in at $7.99 billion, versus the consensus estimate of $7.79 billion.
Hedge funds love Visa Inc. (NYSE:V) for both dividends and share price gains. Visa Inc. (NYSE:V) is up about 7% year to date through May 26. Legendary billionaire Warren Buffett has a $1.9 billion stake in the company. Overall, 173 hedge funds tracked by Insider Monkey have stakes in Visa Inc. (NYSE:V) as of the end of the first quarter.
4. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 204
After suffering earlier this year amid AI-related pressures, Alphabet Inc. (NASDAQ:GOOG) is back with a vengeance. Alphabet Inc. (NASDAQ:GOOG)’s Bard service is getting a lot of popularity on the web due to its impressive performance. Alphabet Inc. (NASDAQ:GOOG) also plans to roll out AI-powered search for billions of people in the near future. Alphabet Inc. (NASDAQ:GOOG) recently revealed some tools at the Google Marketing Live event that will help marketers in creating ad campaigns. With a huge prowess and user base, Alphabet Inc. (NASDAQ:GOOG) is one of the top blue chip stocks poised to grow on the back of the AI revolution.
A total of 204 hedge funds in Insider Monkey’s database held stakes in Alphabet Inc. (NASDAQ:GOOG) as of the end of the first quarter of 2023. The biggest stakeholder of Alphabet Inc. (NASDAQ:GOOG) was Harris Associates of Natixis Global Asset Management which had a $3.8 billion stake in the company.
3. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 220
Mark Zuckerberg started a ruthless job-cutting spree earlier this year that is still ongoing. Media reports suggest Meta Platforms, Inc. (NASDAQ:META) is undergoing another, and probably its final, round of layoffs that would affect 10,000 roles. This would take Meta Platforms, Inc. (NASDAQ:META)’s headcount to the mid-2021 levels. Zuckerberg’s strategy to spur growth at the company is working, as evident from its most recent earnings report.
At the end of 2022, 194 hedge funds tracked by Insider Monkey had stakes in Meta Platforms, Inc. (NASDAQ:META). This figure jumped to 220 as of the end of March as more hedge funds initiated stakes in Meta Platforms, Inc. (NASDAQ:META).
Artisan Value Fund made the following comment about Meta Platforms, Inc. (NASDAQ:META) in its Q1 2023 investor letter:
“Our top contributors in Q1 were Meta Platforms, Inc. (NASDAQ:META), Warner Bros Discovery (WBD) and FedEx. Following sharp declines in 2022, shares of Meta Platforms have more than doubled since their early November 2022 lows. Last year’s drawdown created a highly favorable risk-reward, which we took advantage of by adding to our position. Management has wisely, in our view, recalibrated its spending plans to focus on profitability amid a weaker advertising environment, increased TikTok competition and Apple’s privacy changes. While investors got ahead of themselves back in 2021, extrapolating pandemic growth rates into the future, Meta is still a highly successful enterprise generating over $120 billion of revenue annually on a run-rate basis and has more than $40 billion in cash on its balance sheet to help it navigate its future course. Recent usage and engagement trends for Facebook and Instagram have been positive, and Reels—Meta’s answer to TikTok—is gaining traction.”
2. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 243
Amazon.com, Inc. (NASDAQ:AMZN) ranks second on our list of the best blue chip stocks to buy according to hedge funds. It seems the core business of Amazon.com, Inc. (NASDAQ:AMZN) (ecommerce) has taken a backseat these days amid all the hullaballoo about AI and Cloud computing. While ecommerce remains its biggest growth catalyst, Amazon.com, Inc. (NASDAQ:AMZN) has huge plans for Cloud growth. Amazon.com, Inc. (NASDAQ:AMZN) recently announced to invest a whopping $12.7 billion in Cloud markets in India.
A total of 243 hedge funds tracked by Insider Monkey were long Amazon.com, Inc. (NASDAQ:AMZN) as of the end of the first quarter. The biggest stakeholder of Amazon.com, Inc. (NASDAQ:AMZN) during this period was Harris Associates of Natixis Global Asset Management which had a $2.4 billion stake in the company.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 289
Microsoft Corporation (NASDAQ:MSFT) is the best blue chip stock to buy according to hedge funds. Insider Monkey’s database of 943 hedge funds updated for Q1 filings shows that 289 hedge funds had stakes in Microsoft Corporation (NASDAQ:MSFT), up from 259 hedge funds in the previous quarter. Hedge funds upped their bets on Microsoft Corporation (NASDAQ:MSFT) as it makes waves almost on a daily basis with its AI advances.
Bernstein analyst Mark Moerdler recently said that Microsoft Corporation (NASDAQ:MSFT) has a clear advantage in the AI space due to the sheer size of its customer base, which comes from Office, Windows, and other products. Moerdler praised Microsoft Corporation (NASDAQ:MSFT) Copilot feature which he believes Microsoft is integrating in all of its key products. He has an Outperform rating on Microsoft Corporation (NASDAQ:MSFT).
Alger Spectra Fund made the following comment about Microsoft Corporation (NASDAQ:MSFT) in its Q1 2023 investor letter:
“Microsoft Corporation (NASDAQ:MSFT) is a beneficiary of corporate America’s transformative digitization. Microsoft’s CEO expects technology spending as a percent of Gross Domestic Product (GDP) to jump from about 5% now to 10% in 10 years and that Microsoft will continue to capture market share within the technology sector. The company operates through three segments: Productivity and Business Processes (Office. LinkedIn, and Dynamics), Intelligent Cloud (Server Products and Cloud Services. Azure, and Enterprise Services), and More Personal Computing (Windows Devices, Gaming, and Search). While the company reported decent fiscal second quarter results, their investment in OpenAl’s ChatGPT captured the attention of investors. contributing to positive performance. Throughout the quarter. Microsoft surprised investors with continual rollouts of new Al capabilities across the company’s portfolio (e.g., Bing, GitHub. Teams, Office 365). Furthermore, the company announced Microsoft 365 Copilot, which leverages GPT-4, a large language model, combined with the Microsoft Graph of data to provide Al virtual assistance. We believe Microsoft’s investment in OpenAl provides a first-mover advantage in the Al transformer model space. Despite challenges in the early days of Al-powered applications, the pace of Al innovation is faster than any other enterprise technology previously observed, in our view.”
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