2020 has been a wild year for everyone: even blue-chip stocks and the "smart money" investors that hold them.

Hedge funds ended 2019 with a record $3.32 trillion in assets under management (AUM). However, in 2020, volatility and a stock market led by only a narrow range of equities have damaged hedge fund returns and forced a number of investors to head for the exits.

Just have a look at industry statistics. Hedge funds' collective assets under management fell 11% to $2.96 trillion in the quarter ended March 31, according to Hedge Fund Research. That's the first time AUM has fallen below $3 trillion since the third quarter of 2016. More than $333 billion in assets was wiped out by performance losses, while net outflows claimed another $33.3 billion.

And yet hedge funds are still worth keeping tabs on. They command a vast pool of assets and have unparalleled resources for research. Heck, the best of the best can make a billion dollars in a single trade.

To get a sense of what hedge funds are holding these days, we turned to WhaleWisdom, which is a fount of data when it comes to institutional investors. We were able to determine hedge funds' favorite bets based on the number of funds holding a position in any given stock.

It should come as no surprise that big blue-chip stocks dominate the list. Indeed, of the 25 most popular hedge fund stocks, 14 are components of the Dow Jones Industrial Average. Partly that's a function of their massive market capitalizations and attendant liquidity. There's ample room for big institutional investors to build or sell large positions.

Have a look at hedge funds' 25 favorite blue-chip stocks to buy now. All these names likely appeal to the smart money because of their size and strong track records. But we'll delve into a few specifics that make each pick special.

25. Adobe

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As the undisputed leader in making software for designers and other creative types, Adobe (ADBE, $406.82) is a no-brainer holding for hedge funds and other large pools of cash looking for blue-chip stocks to buy. In addition to Reader for PDFs, its software arsenal includes Photoshop, Premiere Pro for video editing and Dreamweaver for website design, among others.

"As a result of its early-mover position and strategic M&A transactions, Adobe has established itself as the unchallenged leader in Creative software for both the Enterprise and consumer markets," write Stifel analysts, who rate the stock at Buy.

"Our checks indicated some deal delays given an uncertain near-term environment, but noted an increased focus by companies on their digital engagement strategy, positioning Adobe well in the medium to long term," Morgan Stanley analysts write. "Despite (near-term) risks, we remain confident in Adobe's 20%+ EPS growth potential coming out of the crisis, which we see as underpriced at current levels and remain Overweight."

Hedge funds clearly are on board, no doubt lured by excellent earning growth forecasts of 15.8% annually over the next three to five years, according to S&P Capital IQ.

ADBE has garnered a total of 20 Buy calls vs. nine Holds and one Sell in the analyst community, too.

24. Costco

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