Hedge Funds Are Investing Heavily In These Blue Chip Stocks — Should You Follow Suit?

With economic uncertainty lurking and inflation remaining a concern, many investors are turning their attention to high-quality blue chip stocks that have proven historically resilient. 

As a retail investor, one of the best things you can do is make a list of the blue chip stocks smart money investors are gravitating toward. In this case, the best way to do so is by closely monitoring heavy fund activity. 

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These five blue chip stocks have the highest number of hedge fund investors.  

Microsoft Corp.

Hedge fund investors count: 306

Standing as the premier choice among elite hedge funds, Microsoft Corp. has showcased impressive performance. 

The company’s financial achievements in the last fiscal second quarter highlight a generally accepted accounting principles (GAAP) earnings per share (EPS) of $2.93, surpassing expectations by $0.16, with revenue experiencing a significant 17.7% increase year over year to $62.02 billion, exceeding forecasts by $890 million. 

At the end of the third quarter, 306 hedge funds held investments in Microsoft.

Amazon.com Inc.

Hedge fund investors count: 286

E-commerce giant Amazon.com Inc. plays a pivotal role in the Bridgeway Blue Chip ETF and is a staple in the investment portfolios of the world’s billionaires. 

The company’s fourth-quarter performance was robust, with an EPS of $1, notably higher than the anticipated $0.80. 

Its quarterly revenue saw a 13.9% increase from the previous year to $170 billion, outperforming expectations by $3.74 billion.

Meta Platforms Inc.

Hedge fund investors count: 234

Meta Platformes Inc. is the third most favored blue chip stock for hedge fund investments. The company is on a growth trajectory, as evidenced by its unexpectedly strong fourth-quarter results, including a 25% year-over-year revenue increase. The announcement of its inaugural dividend of $0.50 per share was met with investor enthusiasm. 

For the first quarter of 2024, Meta anticipates revenues between $34.5 billion and $37 billion, surpassing the analysts’ consensus of $33.87 billion.

Alphabet Inc. Class A

Hedge fund investors count: 221

Alphabet Class A is highly regarded by top money managers for its potential. The company is strategically investing billions to enhance its artificial intelligence (AI) capabilities, positioning it to compete with Microsoft and others. 

Its diverse portfolio, including the Cloud business and YouTube, positions Alphabet Inc Class A as an undervalued investment opportunity, according to several financial analysts.

Nvidia Corp.

Hedge fund investors count: 180

Nvidia Corp. is recognized as one of the most attractive blue chip stocks, drawing attention from both institutional and individual investors. 

With the stock price soaring approximately 216% in the last year, experts suggest that AI-related growth opportunities could propel it even further. 

At the close of the September quarter, 180 hedge funds had stakes in Nvidia Corp., with Rajiv Jain's GQG Partners holding the largest share, valued at $6.1 billion.

Hedge funds and retail investors alike are finding comfort by investing in these blue chip stocks. 

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