We recently compiled a list of the 10 Most Promising Tech Stocks According to Hedge Funds. In this article, we are going to take a look at where CrowdStrike Holdings, Inc. (NASDAQ:CRWD) stands against the other promising tech stocks.
NASDAQ is Poised for Long-Term Returns
Big tech is expected to outperform in the coming months. On October 2, Ari Wald, Oppenheimer’s Head of Technical Analysis, appeared in an interview on Yahoo Finance to discuss his market thesis and explain why investors must consider high-growth companies.
Wald highlights that market breadth is expected to remain high supporting extended highs throughout the end of 2024. In addition to that, he expects the bull cycle to remain intact and believes the trend will continue in 2025. During the late summer, the market saw a change in the high beta versus low volatility ratio stocks. It was seen that high-beta stocks could not keep up with high dividend-paying and lower-volatility names.
Given the rotational nature of the market, Wald expects higher beta names to make a strong comeback and reclaim their leadership position. Wald suggests that investors should consider investing in higher growth companies, as the Nasdaq and Russel 100 are expected to lead again. Trends show that the mag seven is growing and climbing, as the market conditions continue to settle.
Viewing Tech Stocks on Valuations Alone is Wrong, Strategist Says
Technology stocks have more room to run. On October 14, Malcolm Ethridge, Capital Area Planning Group managing partner, appeared in an interview on CNBC where he discussed the technology market outlook and revealed his favorite picks.
Ethridge suggests that judging stocks based on their valuations alone is a big mistake, especially in the current market cycle which is heavily influenced by the AI boom. Looking at the broader perspective, he believes there are a lot of positive opportunities among the magnificent seven and outside of it.
He adds that companies among the mega tech have been pouring billions into generating large language models and the likes of it. He also suggests that most of this technology is yet to be understood and therefore the true value we can derive from these technologies is yet to come. These companies also have a lot of intrinsic value and there is more to be realized soon.
Now that we have studied the technology market outlook, let’s take a look at the most promising tech stocks according to hedge funds. You can also read our piece on the most promising AI stocks according to analysts.
Our Methodology
To come up with the most promising technology stocks according to hedge funds, we sifted through multiple ETFs, our own rankings, and similar rankings on the internet. We then ranked the most promising tech stocks based on the hedge fund sentiment as of Q2 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Security personnel at their consoles, monitoring a global network of threats in real-time.
CrowdStrike Holdings, Inc. (NASDAQ:CRWD)
Number of Hedge Fund Holders: 69
CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is a cybersecurity company that ranks 10th on our list of the most promising tech stocks according to hedge funds. The company provides a range of security products including identity management, threat intelligence, and threat detection.
The company has 29,000 clients in multiple sectors including healthcare, retail, technology, and the government, reflecting its strong position in the market. Its AI native cybersecurity platform, Falcon is its primary product, growing at 80% year-over-year, in FQ2 2025. Despite the July 19 incident, CrowdStrike Holdings, Inc. (NASDAQ:CRWD) has been resilient and showcased transparency and accountability to its customers. In the past 40 days, the company closed crucial partnerships, added innovations to its Falcon Platform, and expanded its CrowdStrike Marketplace to meet the growing demand for cybersecurity solutions.
On August 29, Eric Heath, KeyBanc Capital Markets equity research analyst, appeared in an interview on Yahoo Finance to discuss his stance on CRWD. He suggested that despite its global outage in July, the long-term opportunity CRWD offers remains intact. He also added that the company is taking corrective action to avoid such incidents in the future and suggested the company has grown since the incident and will continue to do so.
As our reliance on software increases so does the need for cybersecurity, which makes CrowdStrike Holdings, Inc. (NASDAQ:CRWD) an important stakeholder now and in the coming years. That said, according to our Insider Monkey database, 69 hedge funds were bullish on the stock at the close of Q2 2024.
Overall CRWD ranks 10th on our list of the most promising tech stocks according to hedge funds. While we acknowledge the potential of CRWD as an investment, our conviction lies in the belief that 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 CRWD 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.