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 QUALCOMM Incorporated (NASDAQ:QCOM) 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).
A technician testing the latest 5G device, demonstrating the company’s commitment to innovation.
QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 100
QUALCOMM Incorporated (NASDAQ:QCOM) is one of the most promising tech stocks according to hedge funds. The semiconductor company produces hybrid AI architecture applicable to most generative AI applications and devices including phones, laptops, XR headsets, cars, and IoT.
Speaking of AI, during the fiscal third quarter of 2024, the company launched its new chips for PCs capable of power efficiency and personalized AI experiences. The launch of these chips positions QUALCOMM as a growing intelligent computing company. In addition to that, QUALCOMM Incorporated (NASDAQ:QCOM) announced the launch of its new Networking Elite platform, capable of revolutionizing networking connectivity with Edge AI. Last week, the company also collaborated with STMicroelectronics to develop the next generation of industrial and consumer IoT solutions backed by Edge AI.
Overall, QUALCOMM Incorporated (NASDAQ:QCOM) is well-positioned to exploit the AI wave and become a market leader. As for its supposed Intel acquisition, if it comes through, the company will have access to multiple foundries, allowing it to compete with giants like Taiwan Semiconductor.
On that, Cory Johnson Futurum Group’s chief market strategist, appeared on Yahoo Finance to shed light on the possible takeover. According to Johson, the deal is one of the biggest in the history of the semiconductor industry. He adds that Intel was once the largest company in the industry, but it no longer holds that position, and adding chips into data centers has not worked out for them. He suggests that the deal will take QCOM into a new realm and position it as a contender to become a leader in the industry.
Overall QCOM ranks 8th on our list of the most promising tech stocks according to hedge funds. While we acknowledge the potential of QCOM 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 QCOM 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.