Hedge Funds' Most Popular and Unpopular Stocks Revealed

Goldman Sachs analysts have identified stocks with the largest increases and decreases in hedge fund popularity during Q2. Hedge funds have shown the largest increase in ownership in companies such as Baidu, Alibaba, and Tencent. Conversely, companies like FedEx and Netflix have seen the largest decreases in hedge fund popularity. The report highlights the shifting trends in hedge fund investments.

Hedge funds have shown significant shifts in their investment portfolios during Q2 2025, with notable increases and decreases in ownership of specific companies. According to recent reports, Baidu, Alibaba, and Tencent have seen substantial growth in hedge fund interest, while FedEx and Netflix have experienced a decline in their popularity among hedge fund managers.

Baidu Inc. (BIDU) has been a standout performer, with a 4% year-over-year (YoY) revenue decline in Q2 2025 to ¥32.71 billion ($4.56 billion), but its AI business revenue surged 34%. This strategic pivot toward artificial intelligence (AI) and cloud computing has attracted investor confidence, as evidenced by a 0.15% pre-market stock rise [1]. Baidu's AI Cloud segment grew 34% YoY, reaching ¥10 billion in revenue, driven by cost-competitive models like ERNIE 4.5 Turbo and X1 Turbo. These models have attracted over 10,000 enterprises and 50,000 developers via the Qianfan MaaS platform.

Similarly, Alibaba Group Holding Limited (BABA) and Tencent Holdings Limited (0700.HK) have seen increased hedge fund interest, reflecting their strong positions in e-commerce and digital services. Alibaba's robust revenue growth and strategic investments in AI and cloud computing have made it a preferred choice for hedge funds. Tencent's diversified revenue streams, including gaming, social media, and financial services, have also contributed to its rising popularity among investors.

Conversely, FedEx Corporation (FDX) and Netflix, Inc. (NFLX) have experienced a decline in hedge fund interest. FedEx reported a 2% YoY revenue decline in Q2 2025, attributed to broader macroeconomic challenges and increased competition in the logistics sector. Meanwhile, Netflix's subscriber growth has slowed, and the company has faced challenges in maintaining its content library and competing with other streaming services. These factors have led to a decrease in hedge fund ownership of these stocks.

The report highlights the shifting trends in hedge fund investments, with a focus on AI and technology stocks. As hedge funds seek to capitalize on the growth potential of these sectors, companies like Baidu, Alibaba, and Tencent are gaining popularity. Conversely, traditional sectors such as logistics and entertainment are facing decreased interest from hedge funds.

References:
[1] https://www.ainvest.com/news/baidu-ai-revenue-surges-q2-revenue-decline-2508/