4. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 128
Apple Inc. (NASDAQ:AAPL) makes some of the world’s top-tier computing products and the company’s MacBook is specifically built for machine learning. The company’s M1 and M1 Max processors are specifically designed for machine learning and outperform benchmarks by 11x. The company’s latest M2 chip is 1.4x faster than the M1. Apple Inc. (NASDAQ:AAPL) is expected to lead the machine learning industry in the coming years and is therefore one of the best machine learning stocks to buy now.
Wall Street is bullish on Apple Inc. (NASDAQ:AAPL). On September 29, UBS analyst David Vogt maintained his Buy rating and $185 price target on Apple Inc. (NASDAQ:AAPL). On September 30, Evercore ISI analyst Amit Daryanani reiterated his $190 price target and buy-side Outperform rating on Apple Inc. (NASDAQ:AAPL).
At the close of the second quarter of 2022, 128 hedge funds were long Apple Inc. (NASDAQ:AAPL) and held stakes worth $143 billion in the company. As of June 30, Berkshire Hathaway is the top shareholder in Apple Inc. (NASDAQ:AAPL) and has stakes worth $122 billion in the company. The investment covers 40% of Warren Buffett’s 13F portfolio.
Here is what Distillate Capital Partners LLC had to say about Apple Inc. (NASDAQ:AAPL) in its second-quarter 2022 investor letter:
“Apple was largest new purchase in the quarter, at a 2% weight. Apple underperformed the overall market last quarter, and given very minimal debt, this price weakness translated into a commensurate fall in its enterprise value. For stocks with higher debt levels, it takes a disproportionately bigger market cap drop to achieve the same valuation improvement and this is a key reason we avoid highly leveraged names where significant price weakness can be experienced during a revaluation process. Alongside this decline in EV for Apple, its estimated free cash flows have risen steadily throughout the year. This contrast between a falling enterprise value and rising free cash flow, which is highlighted in Figure 12, made the stock sufficiently better valued such that it entered the portfolio. While Apple’s valuation is now attractive enough to warrant inclusion in the portfolio, it still ranks in the bottom quartile of the portfolio’s holdings and so the stock’s initiating weight is capped at a 2%. This contrasts significantly with Apple’s near-7% position in the S&P 500 benchmark, and reflects both our preference to avoid too much concentration risk as well our goal of ensuring that the overall portfolio valuation is as attractive as possible while balancing characteristics of stability and low indebtedness.”
