We recently published a list of Top 10 Stocks to Buy According to Adage Capital Management. In this article, we are going to take a look at where Apple Inc. (NASDAQ:AAPL) stands against other top stocks to buy according to Adage Capital Management.
Adage Capital Management, based in Boston, is a major investment firm specializing in managing the broader market’s assets, with a strong focus on Endowments and Foundations. Among its prominent clients are institutions such as Harvard University, Dartmouth College, Northwestern University, the American Red Cross, and the Getty Foundation. Over the last 15 years, Adage and its predecessor, the Select Equity Group at Harvard Management Company, have consistently surpassed the wider market’s performance by an average of 3.5%.
The firm’s origins date back to the mid-1980s when co-founders Phillip Gross and Robert Atchinson met as investment analysts for Harvard’s endowment. In the 1990s, following controversy over large performance bonuses at Harvard Management, they, along with an 18-person team, left to establish Adage Capital Management. Their launch was backed by a $1.8 billion initial investment from Harvard, with an agreement that the university would receive 10% of Adage’s earnings.
Adage Capital Management primarily manages the broader market’s assets for endowments and foundations, utilizing a long/short equity strategy driven by fundamental analysis. The firm also explores risk arbitrage and event-driven investment opportunities when suitable.
Phillip Gross, more commonly known as Phill Gross, co-founded Adage Capital Management, L.P. in 2001 and serves as a Managing Director and Healthcare Portfolio Manager. Before establishing the firm, he spent 18 years at Harvard Management Company, Inc., where he held roles as a Healthcare and Retail Analyst, Equity Research Director, and Partner.
Gross earned both his B.S. in finance and economics in 1982 and M.S. in investments in 1983 from the University of Wisconsin. He previously served on the UW Foundation Board of Directors and is currently involved with the Steve Hawk Center for Applied Securities Analysis Advisory Board and the Nicholas Center for Applied Corporate Finance Advisory Board. In 2006, he was honored with the Distinguished Alumnus Award from the UW Business School.
In philanthropy, Gross co-founded Strategic Grant Partners, an initiative aimed at systemic change in education and family services in Massachusetts. He serves as Vice President of the Board of Directors for Youth Enrichment Services, a Boston-based organization that introduces urban youth to outdoor activities. Additionally, he is a Board Trustee of the U.S. Ski and Snowboard Association, vice-chair of its Investment Committee, and a board member of the T2 Foundation.
Adage Capital Management’s Q4 2024 13F filing reported $57.19 billion in managed 13F securities, with its top 10 holdings accounting for 31.7% of the total portfolio. This distribution highlights the firm’s diversified investment approach.
Our Methodology
The stocks discussed below were picked from Adage Capital Management’s Q4 2024 13F filings. They are compiled in the ascending order of the hedge fund’s stake in them as of December 31, 2024. To assist readers with more context, we have included the hedge fund sentiment regarding each stock using data from over 1,000 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
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).
A wide view of an Apple store, showing the range of products the company offers.
Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders as of Q4: 166
Adage Capital Management’s Equity Stake: $3.49 Billion
Originally founded in 1976, Apple Inc. (NASDAQ:AAPL) remains a dominant force in the global technology sector, ranking as the top stock pick for Adage Capital Management. In Q4 2024, the company reported revenue of $124.3 billion, reflecting a 3.95% year-over-year increase and exceeding analyst expectations. Earnings per share rose to $2.40, up from $2.18 in the previous year. On January 30, 2025, Apple’s Board of Directors announced a quarterly dividend of $0.25 per share, payable on February 13, 2025. Hedge fund interest in Apple also grew, with 166 out of 1,009 funds tracked by Insider Monkey holding positions valued at nearly $118.56 billion by the end of Q4, an increase from 158 funds in the prior quarter.
Looking ahead, Apple Inc. (NASDAQ:AAPL) is making a $500 billion investment in the U.S. over the next four years, focusing on expanding domestic manufacturing, doubling its Advanced Manufacturing Fund to $10 billion, and hiring 20,000 employees in key areas such as R&D, silicon engineering, software development, and AI. The company will begin producing servers in Houston this year and plans to open a 250,000-square-foot manufacturing facility in Texas by 2026, aligning with President Trump’s push for increased domestic production.
In March 2025, Apple Inc. (NASDAQ:AAPL) announced that it has delayed its more personalized Siri features, initially expected this spring, with plans to roll them out “in the coming year.” The update was meant to enhance Siri’s ability to understand personal context and take actions across apps, but internal concerns about functionality have led to setbacks. Bloomberg’s Mark Gurman reports that Apple executives, including Craig Federighi, found the features unreliable in testing, and some within Apple’s AI division fear they may need to be rebuilt from scratch. A fully modernized, conversational Siri might not debut until iOS 20 at the earliest.
Tsai Capital mentioned Apple Inc. (NASDAQ:AAPL) in its Q4 2024 investor letter. It stated:
“We initiated our investment in Apple Inc. (NASDAQ:AAPL) in 2016 and elevated it to a core holding in 2018, the same year the company introduced its redesigned 13-inch and 15-inch MacBook Pro models. Under Tim Cook’s visionary leadership, Apple has consistently redefined innovation in hardware and software.
The September 2024 launch of the iPhone 16, with its groundbreaking AI capabilities, including enhanced image generation tools, marks another inflection point. We believe this transformative device is the foundation for an AI-driven supercycle and could entice approximately 100 million consumers to upgrade, reinforcing Apple’s leadership in the industry.
Today, Apple’s ecosystem spans over two billion active devices, supported by a rapidly-growing base of subscription services. This strategy has helped to turbocharge customer engagement and spending. In the most recent fiscal year, which ended in September 2024, Apple’s high-margin services division accounted for 39.3% of total gross profits, up from 32.8% just two years ago.
Apple’s financial footing remains exceptional, with approximately $50 billion in net cash and marketable securities. Looking ahead, we expect earnings-per-share growth to outpace revenue growth, driven by margin expansion and continued share buybacks.”
Overall, AAPL ranks 1st on our list of top stocks to buy according to Adage Capital Management. While we acknowledge the potential for AAPL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AAPL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.