Institutional investment into a specific stock often signals optimism among investors. When large funds and financial institutions collectively invest in a company, it reflects long-term potential and thorough research. While individual retail traders may not match the extensive resources of professional firms, analyzing blue-chip tech stocks attracting institutional interest offers valuable insight.
It is crucial to understand that institutions, despite their resources, can also err. Merely following the crowd is not a sound investment strategy. Examining a few stocks that have garnered significant institutional attention can provide perspective for retail traders. Amidst the tech sector’s strong performance in recent years, it is prudent for investors to monitor companies that institutions find appealing. Here are three such blue-chip stocks:
Amazon (AMZN)
Amazon (NASDAQ:AMZN) stands as a prominent blue-chip tech stock, attracting substantial institutional investment. Despite the focus on lesser-known companies ahead, the overwhelming bullish sentiment towards Amazon is remarkable. Over the past three months, this company received 41 “Buy” ratings from institutional analysts, demonstrating unparalleled positivity.
Amazon’s transparent growth trajectory, spanning e-commerce, cloud services, and AI, positions it for substantial profit growth in the coming years. In Q1, the company exceeded EPS estimates by 17.6%. Additionally, recent high call option purchases and increased holdings by notable investors solidify Amazon’s appeal to institutions.
Fiserv (FI)
Fiserv (NYSE:FI) specializes in financial technology, particularly payment processing. While the broader fintech sector faced challenges, Fiserv’s long-standing relationships with major banks have propelled its outperformance over the past few years.
Despite a minor revenue miss in the recent earnings report, Fiserv’s 5% EPS beat and optimistic guidance have kept Wall Street optimistic. Notable institutions like Van ECK Associates Corp and Citigroup have increased their holdings in FI, recognizing it as a favored blue-chip tech stock.
NetApp (NTAP)
NetApp (NASDAQ:NTAP) operates in cloud data infrastructure, capitalizing on the booming demand for data in the age of AI advancements. Despite a remarkable 71% stock price increase in the past year, analysts anticipate modest revenue declines this year before a subsequent recovery.
While the growth outlook may not be as robust, NetApp’s presence in the AI sector remains compelling. Recent institutional investments from First Horizon Advisors Inc. and others underscore the stock’s appeal among institutions.
On the date of publication, the author did not hold any positions related to the securities mentioned. The views expressed are solely those of the author, adhering to InvestorPlace.com Publishing Guidelines.
The author is a self-taught investor with focus in growth and cyclical stocks, emphasizing strong fundamentals, value, and long-term prospects, along with interests in high-risk assets like cryptocurrencies.
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