In this article, we will list the 5 Best Quality Stocks to Buy According to Hedge Funds. Please visit 8 Best Quality Stocks to Buy According to Hedge Funds to see the extended list and the methodology behind it.
5. State Street Corporation (NYSE:STT)
Number of Hedge Fund Holders: 42
State Street Corporation (NYSE:STT) is one of the best quality stocks to buy according to hedge funds. On April 9, State Street Corporation announced the expansion of its nearly 40-year partnership with Thornburg Investment Management to support Thornburg’s new ETF share classes. State Street will provide end-to-end servicing, including custody, accounting, ETF basket creation, transfer agency, and create-and-redeem order management.
This mandate represents only the second active ETF share-class servicing arrangement in the US, positioning State Street as a leading enabler for asset managers seeking flexible ways to deliver active investment strategies. Thornburg, which is a global investment firm managing ~$57 billion in assets as of March 31, first partnered with State Street for its initial suite of active ETFs in January 2025. The transition to ETF share classes is a strategic move to meet increasing investor demand for diversified access to high-conviction equity and fixed-income strategies.
Donna Milrod, State Street’s chief product officer, highlighted that the firm’s operational scale allows clients to focus on investment outcomes while maintaining a seamless experience across different fund structures. This expansion solidifies State Street Corporation’s (NYSE:STT) status as the top global provider of ETF services, driving innovation for active managers in the US market.
State Street Corporation (NYSE:STT) provides financial products and services to institutional investors, including custody, accounting, and fund administration services for traditional and alternative assets, as well as trading, securities finance, and investment analytics solutions.
4. Illumina Inc. (NASDAQ:ILMN)
Number of Hedge Fund Holders: 46
Illumina Inc. (NASDAQ:ILMN) is one of the best quality stocks to buy according to hedge funds. On March 18, Illumina and Labcorp (NYSE:LH) announced an expanded collaboration aimed at increasing global access to precision oncology through next-generation sequencing/NGS solutions. The partnership focuses on several key areas, including the development of new in vitro diagnostic/IVD tests for whole-genome sequencing and comprehensive genomic profiling/CGP.
A central part of the agreement involves the co-commercialization of Labcorp’s FDA-authorized liquid biopsy assay, PGDx elio plasma focus Dx, alongside Illumina Inc.’s (NASDAQ:ILMN) FDA-approved TruSight Oncology Comprehensive. This joint offering is intended to provide healthcare providers with distributed tools for both tissue and liquid biopsy testing, facilitating the identification of patients eligible for targeted treatments and clinical trials.
Furthermore, the collaboration provides pharmaceutical companies with specialized opportunities for developing companion diagnostics for both types of biopsies. The two companies also plan to continue generating clinical evidence to support broader payer coverage and the adoption of CGP. They recently published a joint study in Frontiers of Oncology involving over 7,600 lung cancer samples, which showed that CGP could detect actionable variants in 72% of patient tumors.
Illumina Inc. (NASDAQ:ILMN) is a life sciences company that develops and produces tools and systems for genomic research. It provides a variety of tools and services, such as sequencing platforms and microarrays, that allow clinicians to evaluate genetic data and make discoveries.
Labcorp Holdings Inc. (NYSE:LH) is a diagnostics & research company that operates through two segments: Diagnostics Laboratories and Biopharma Laboratory Services. The company provides comprehensive clinical and specialty diagnostic testing, digital pathology solutions, and AI-enabled healthcare tools.
3. Williams-Sonoma Inc. (NYSE:WSM)
Number of Hedge Fund Holders: 47
Williams-Sonoma Inc. (NYSE:WSM) is one of the best quality stocks to buy according to hedge funds. On April 06, Williams-Sonoma announced a new gourmet food collaboration with Oakville Grocery, a 145-year-old Napa Valley institution. This partnership brings together two prominent Northern California brands to launch a collection of pantry staples and artisanal foods inspired by the regional flavors of the Napa and Sonoma Valleys.
The assortment includes items such as olive oils, tapenades, braising sauces, and condiments featuring local ingredients like cabernet, olives, and rosemary. The ‘Oakville Grocery for Williams Sonoma’ collection is designed to reflect the seasonal bounty and craftsmanship of wine country, aiming to facilitate effortless entertaining for customers nationwide.
The complete collection is currently available at all Williams-Sonoma retail locations and through their website, with a curated selection also offered at the Oakville Grocery store in California. To commemorate the launch, Williams-Sonoma Inc. (NYSE:WSM) stores will host tasting events on April 17 and 18. This initiative aligns with Williams-Sonoma’s history of bringing people together around food while expanding Oakville Grocery’s reach as a premier destination for culinary enthusiasts.
Williams-Sonoma Inc. (NYSE:WSM) operates as an omnichannel retailer focused on home products, with a portfolio built around distinct merchandising strategies.
2. Gilead Sciences Inc. (NASDAQ:GILD)
Number of Hedge Fund Holders: 71
Gilead Sciences Inc. (NASDAQ:GILD) is one of the best quality stocks to buy according to hedge funds. On April 9, Tempus AI (NASDAQ:TEM) announced an expanded, multi-year collaboration with Gilead Sciences to accelerate Gilead’s oncology research and development pipeline. The agreement builds on previous work where Gilead utilized Tempus’ de-identified multimodal data for trial design, biomarker strategies, and health outcomes analysis.
Under this new enterprise-wide mandate, Gilead gains broader access to Tempus’ AI-driven Lens platform and dedicated analytical services across multiple cancer indications. The partnership aims to use Tempus’ vast library of real-world data to uncover biological insights that can improve clinical decision-making.
By integrating Gilead’s scientific expertise with advanced data insights, the companies seek to increase the probability of success for new cancer therapies. Patrick Loerch, SVP of Clinical Data Science at Gilead Sciences Inc. (NASDAQ:GILD), emphasized that the collaboration focuses on putting patients at the center of innovation through data-informed research. The collaboration underscores the growing role of AI and real-world evidence in modern drug development and precision medicine.
Gilead Sciences Inc. (NASDAQ:GILD) is a drug manufacturer that develops medicines for unmet medical needs. The company provides treatments for HIV-1, chronic hepatitis C, primary biliary cholangitis, chronic hepatitis B, and serious invasive fungal infections. It also offers T-cell and CAR T-cell therapies for adult patients, intravenous injections, and treatments for COVID-19.
Tempus AI Inc. (NASDAQ:TEM) is a healthcare technology company that uses artificial intelligence to advance precision medicine.
1. Qualcomm Inc. (NASDAQ:QCOM)
Number of Hedge Fund Holders: 78
Qualcomm Inc. (NASDAQ:QCOM) is one of the best quality stocks to buy according to hedge funds. On April 10, Reuters reported that Qualcomm and Snap Inc.’s (NYSE:SNAP) smart glasses unit, Specs, announced a multi-year deal to use Qualcomm chips for upcoming devices. The smart glasses, which are launching later this year, will use the Snapdragon XR processor platform. While the financial details were not disclosed, this deal builds on a years-long relationship where Qualcomm chips have powered previous generations of Snap’s developer-focused Spectacles.
The deal marks the first major move for the Specs unit since it was established by Snap in January. Snap formed a separate unit to provide more independence to the team and to compete with Meta’s Ray-Ban AI smart glasses. The parent company has stated that this separate unit also opens up room for external investment in the development of its smart glasses.
This announcement follows recent pressure from activist investor Irenic Capital Management, which disclosed a 2.5% interest in Snap’s Class A shares. Last week, the firm pushed Snap to cut costs and either spin off or shutter the Specs unit. Despite this pressure, the new agreement ensures Qualcomm will provide the processors for Snap’s upcoming AI-powered gadgets.
Qualcomm Inc. (NASDAQ:QCOM) develops and commercializes core technologies and products for mobile devices and other wireless products. It operates in three segments: Qualcomm CDMA Technologies, Qualcomm Technology Licensing, and Qualcomm Strategic Initiatives.
Snap Inc. (NYSE:SNAP) operates as a technology company in North America, Europe, and internationally. The company offers Snapchat, which is a visual messaging application with various tabs, such as camera, visual messaging, snap map, stories, and spotlight.
While we acknowledge the potential of QCOM to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than QCOM and that has 100x upside potential, check out our report about the cheapest AI stock.
READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
