In this piece, we will take a look at the 11 best nanotechnology stocks to invest in. If you want to skip our introduction to the nanotechnology sector and how it covers a variety of applications ranging from healthcare to consumer technology, then you can skip ahead to read 5 Best Nanotechnology Stocks To Invest In.
Just like artificial intelligence, nanotechnology is another set of technologies that once belonged to the realm of science fiction. Nanotechnology refers to items that are smaller than 100 nanometers. These are used in a wide variety of applications, such as sunscreen and medicines since the small size of the particles allows them to behave in ways that regularly sized items cannot.
One of the most lucrative applications of nanotechnology comes in the semiconductor industry. Modern day chips, such as those that power Apple Inc. (NASDAQ:AAPL)'s iPhone or the latest artificial intelligence graphics processing units from NVIDIA Corporation (NASDAQ:NVDA), are made of transistors that are often as small as just a couple of nanometers. In fact, the world's leading contract semiconductor manufacturer, the Taiwan Semiconductor Manufacturing Company (NYSE:TSM) is currently mass producing semiconductors with feature sizes as small as 3 nanometers. Nothing short of magic, making transistors that are just nanometers wide or long provides chips with dozens of benefits over their predecessors, with the most evident ones being improved electrical conductivity, better power efficiency, and of course, higher computing power.
Another well known user of nanotechnology is the medical industry. It is used for a wide variety of direct and indirect medicinal purposes, such as treating cancer, imaging diseases, and even making new tissues. One such company is the Paris, France based biotechnology firm Nanobiotix S.A. (NASDAQ:NBTX). A specialized biotechnology firm, Nanobiotix uses nano particles to fight cancers of the head, pancreas, and other regions and organs of the human body. The three analysts that cover the stock have rated the shares as Strong Buy on average, and priced in a hefty upside through an average share price target of $11.98. In fact, April 2024 is turning out to be a crucial month for Nanobiotix S.A. (NASDAQ:NBTX) as the firm completed the dose escalation portion of its first phase trial of a lung cancer treatment called NBTXR3.
The treatment targets small cell lung cancer, and it is aimed to help specifically those patients who cannot be treated by surgery or those who have seen their cancer return after earlier bouts of radiation therapy. It uses hafnium oxide nano particles, and Nanobiotix S.A. (NASDAQ:NBTX) is optimistic that while the current trial is only working with lung cancer patients, future uses of NBTXR3 could apply to other cancers as well given hafnium oxide's mechanism of action. Wall Street, it seems, is having a hard time believing the firm, as the stock is down by 15% year to date.
However, while Nanobiotix hasn't done well this year, what about the broader nanotechnology sector? Since nanotechnology covers a wide variety of use cases, some of which we've covered above, it is difficult to ascribe to the sector defined determinants of share price performance. In other words, for example, while the broader biotechnology sector tends to underperform when interest rates are high, the same cannot be said with certainty for all nanotechnology firms.
Yet, we can see how stock indexes that allow investors to track the sector are doing. One such stock index is the S&P Kensho Nanotechnology Index. It tracks "companies that produce nanoscale materials, as well as those that use nanotechnology in their production lines or that build machines capable of measuring information at the nanoscale," which provides it exposure to the broader nanotechnology sector as opposed to customized use cases such as chips and medicines. So how are these nanotechnology stocks performing? Well, the index is up by 9.48% year to date, however, its performance over the past 12 months and three years hasn't been too encouraging. Over these two time periods, the S&P Kensho Nanotechnology Index has been negative 7.5% and negative 25.10%. These time periods have been marked by global economic turbulence in the form of soaring inflation, rising interest rates, and wars - which appear to have made their mark on nanotechnology stocks as well.
So, if you were wondering which nanotechnology stocks to buy, we made one such list today. Some top picks are Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), Thermo Fisher Scientific Inc. (NYSE:TMO), and General Electric Company (NYSE:GE).
11 Best Nanotechnology Stocks To Invest In
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Our Methodology
To make our list of the best nanotechnology stocks, we looked at our previous coverage and some other nano medicine firms and ranked the companies by the number of hedge funds that had bought the shares during Q4 2023. Out of these, those nanotechnology stocks with the highest number of hedge fund shareholders were chosen.
For these best nanotechnology stocks, we used hedge fund sentiment. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
PPG Industries, Inc. (NYSE:PPG) is a sizeable American chemicals company headquartered in Pittsburgh, Pennsylvania. It is one of the more advanced nanotechnology companies in the world because of its advanced nano paint products which are used in aerospace applications. The shares are rated Buy on average, and the average analyst share price target is $159.
As of Q4 2023 end, 39 out of the 933 hedge funds surveyed by Insider Monkey had bought PPG Industries, Inc. (NYSE:PPG)'s shares. Israel Englander's Millennium Management was the biggest investor due to its $293 million stake.
joins Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), Thermo Fisher Scientific Inc. (NYSE:TMO), and General Electric Company (NYSE:GE) in our list of the best nanotechnology stocks to invest in.
10. International Business Machines Corporation (NYSE:IBM)
Number of Q4 2023 Hedge Fund Shareholders: 50
International Business Machines Corporation (NYSE:IBM) is an American technology company involved in the nanotechnology sector due to its semiconductor design division. The firm has been doing well on the financial front as of late as it has beaten analyst EPS estimates in all four of its latest quarters.
During last year's fourth quarter, 50 out of the 933 hedge funds profiled by Insider Monkey had held a stake in the firm. Peter Rathjens, Bruce Clarke, and John Campbell's Arrowstreet Capital is International Business Machines Corporation (NYSE:IBM)'s largest shareholder through its $528 million stake.
Analog Devices, Inc. (NASDAQ:ADI) is a backend semiconductor company that enables firms to design and test their nano scale products. It's also one of the founding members of the MIT nano lab, cementing its place in the nanotechnology industry.
For their fourth quarter of 2023 shareholdings, 62 out of the 933 hedge funds covered by Insider Monkey's research were Analog Devices, Inc. (NASDAQ:ADI)'s shareholders. David Blood and Al Gore's Generation Investment Management owned the biggest stake which was worth $864 million.
3M Company (NYSE:MMM) is an American industrial conglomerate headquartered in St. Paul, Minnesota. While it's been relatively quiet on the news front for the firm, April 2024 has seen 3M Company (NYSE:MMM) announce a new platform to allow customers to verify whether their personal protection equipment is genuine.
Insider Monkey dug through 933 hedge fund portfolios for their December quarter of 2023 shareholdings and found that 62 had held a stake in the firm. 3M Company (NYSE:MMM)'s largest hedge fund investor is Dmitry Balyasny's Balyasny Asset Management as it owns $289 million worth of shares.
Synopsys, Inc. (NASDAQ:SNPS) is another backend semiconductor firm that provides chip design and test products. The shares are up by 18% year to date, as Synopsys, Inc. (NASDAQ:SNPS) benefits from the broader artificial intelligence tailwinds that have pushed semiconductor stocks to record highs. April 2024 has started on a strong note for the firm, as Piper Sandler has rated the stock as Overweight and set a $665 share price target for the company.
As of December 2023 end, 66 out of the 933 hedge funds covered by Insider Monkey were Synopsys, Inc. (NASDAQ:SNPS)'s shareholders. Rajiv Jain's GQG Partners owned the biggest stake which was worth $563 million.
Applied Materials, Inc. (NASDAQ:AMAT) makes and sells semiconductor fabrication equipment. The firm has beaten analyst EPS estimates in all four of its latest quarters, and it scored a win in March 2024 after Intel Corporation (NASDAQ:INTC) named it as one of its 27 distinguished suppliers. Applied Materials, Inc. (NASDAQ:AMAT)'s shares are rated Buy on average, and the average analyst share price target is $215.44.
70 out of the 933 hedge funds profiled by Insider Monkey had bought a stake in the firm during Q4 2023. Applied Materials, Inc. (NASDAQ:AMAT)'s largest hedge fund investor among these is David Blood and Al Gore's Generation Investment Management due to its $1.1 billion stake.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), Applied Materials, Inc. (NASDAQ:AMAT), Thermo Fisher Scientific Inc. (NYSE:TMO), and General Electric Company (NYSE:GE) are some top nanotechnology stocks that hedge funds are buying.
