In this piece, we will take a look at the ten best global stocks to buy now.
With the third quarter of 2024 ending, the discourse on the stock market for global equities has shifted back to interest rates. This comes after artificial intelligence drove markets through the course of the year, but with interest rate cuts having commenced in Europe and China’s economy refusing to roar back, global equity investors are carefully parsing through their investments to see which stocks might be worth it.
This was the gist of a note released by Goldman Sachs in July. In it, the bank advised investors to sift through stocks to eliminate those that have exposure to China. This is because Chinese economic growth has remained sluggish, and after Q2 GDP growth figures for the Asian economic giant sat at 4.7%, Goldman and Citi slashed their GDP growth estimates for 2024 to 4.7%. The two banks’ earlier estimates were 4.9% and 4.8%, and in its European investor note, GS’ analysts raised alarm for several potential headwinds for European firms that could emanate from China. The top three of these were a weak demand in China for discretionary products, the country’s plans to tax luxury goods, and potential retaliatory tariffs against European countries after the EU decided to increase tariffs for Chinese made electric vehicles. “While a great deal of earnings downgrades have already occurred year-to-date for our luxury basket, we worry that more could take place,” the Goldman analysts warned, adding that “the valuation premium of the basket has deflated, but remains on the high side of its history.”
A slowdown in Chinese consumer spending, which was also evident in the country’s latest data release that saw retail sales growth sit at 2%, is particularly worrisome for German stocks. This is because they have already felt the pinch of the slowdown during Q2 and H1 2024. For instance, German watch company Swatch saw its China sales drop by 30% in H1 while the luxury goods manufacturer LVMH experienced a 14% Asian sales drop in Q2 which came after Mercedes-Benz’s China sales dropped by 3% in Q1.
For Germany, this is particularly troubling as its economy has suffered after the disruption of cheap Russian gas in the aftermath of the Ukraine invasion. The German economy contracted by 0.3% in 2023 and continued its downward pace in Q2 by posting a 0.1% sequential contraction. German firms’ disappointing Chinese performance came when the country’s overall exports to China dropped by 14% annually in May to sit at €7.5 billion.
Shifting gears, let’s take a bird’s eye view of global stocks. On this front, JPMorgan has some insights. In its mid year outlook, the bank’s chief global economist Bruce Kasman shared that “Global growth has moderated to a still-solid 2.4% (annual rate) and is less dependent on a U.S. demand engine, as recoveries in Western Europe and emerging markets (excluding China) find firmer footing. The manufacturing sector is also showing signs of recovery, helped in part by a pickup in business spending.” However, in the report which was published in July, the bank remained pessimistic about inflation as it shared that core inflation should sit at 3% at the close of 2024. This led it to wager that higher for longer was the way to go and led to a cumulative 35 basis points of easing in developed markets except Japan by 2024 end.
Yet, the European Central Bank (ECB) led the global charge for rate cuts. It cut interest rates by 25 basis points in June and followed it with another 25 basis point cut in September. Additionally, the Bank of England (BOE) also cut rates by lowering rates by 25 basis points to 5% in August for the first interest rate cuts since the coronavirus pandemic was wreaking havoc in 2020. Moving forward, analysts are divided on the BOE’s future rate cuts, and many believe that the ECB might be less forthcoming with the cuts as well.
While several of the world’s biggest economies have suffered this year, global stocks as a whole have performed well. One of the most well known global stock indexes compiled by the MSCI opened at 3,144 points this year. Its latest value is 3,728 to mark a neat 18.5% year to date growth. However, European stocks have lagged in this performance, with the index of the region’s top 600 stocks having delivered a 10.2% return year to date through price appreciation. This is unsurprising since these 600 firms’ Q1 2024 EPS dropped by roughly 2.5%. However, estimates suggest that these stocks can post at least a 10% EPS growth during Q3 2024.
With these details in mind, let’s take a look at the top global stocks to buy.
Photo by Marc Rentschler on Unsplash
Our Methodology
To make our list of the best global stocks to buy, we ranked the US listed stocks of JPMorgan’s International Equity ETF by the number of hedge funds that had bought the shares in Q2 2024 and picked the top stocks. This particular ETF was preferred because it chose to focus on a diversified set of global stocks as opposed to several others that focused primarily on US tech giants.
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).
10. Stellantis N.V. (NYSE:STLA)
Number of Hedge Fund Holders In Q2 2024: 31
Stellantis N.V. (NYSE:STLA) is one of the biggest car manufacturers in the world. Some of its car brands include Fiat, Maserati, and Jeep. Stellantis N.V. (NYSE:STLA)’s diverse brand portfolio allows it to target all segments of the car market, which means that the firm is able to generate revenue during all kinds of economic conditions. Additionally, it benefits from a wide operations base through an industrial presence in 30 countries and a sales presence in 130 countries. However, Stellantis N.V. (NYSE:STLA)’s global exposure has also led to a slowdown as of late. One key factor when it comes to analyzing car companies is their inventory, and Stellantis N.V. (NYSE:STLA) has suffered on this front in Europe with its inventory piling up due to a slow economy. Similar risks persist in the US, where used car inventories have also piled up due to an overall slow market. Stellantis N.V. (NYSE:STLA) is also struggling to keep some plants open in America after troubles with unions, and these headwinds combined have meant that the stock is down 32.15% year to date.
On the topic of inventory, here’s what Stellantis N.V. (NYSE:STLA)’s management shared during the Q2 2024 earnings call:
“One of the things that we need to say here is that the major topic to be addressed is of course the inventory. This is what you have been highlighting and rightly so. By the end of June we are at 94 days of supply, quite similar to our closest US competitor, same ballpark of inventory but still too high. And this is what we are now addressing. We see that we are going to work on three different directions. One is to make sure that we are aligning our production planning mix to the market mix and we see that what we have in inventory is not always aligned with what the market mix requires. That means that we need to make sure that we bring all the versions that the market is asking from us and the perfect example is the new Ram 1500 DT version where some of the highest output versions were not available, some of the highest trim levels were not available on the right timing.
This has created a distortion in the inventories that are sticking and this is what we are correcting right now, now that we have validated all the versions that we need to make the market response be more appropriate. We are of course looking at the incentives and any price adjustments that will be eventually needed. There is no dogmatism in our approach. There is just a sense that we need to take care of spending your money in the appropriate way. What we have seen so far from what we are told by the dealers is that once the customers reach the showroom, the conversion rate in the showroom is excellent, which means the conversion rate we have in the showroom is meeting the expectations of our dealers because they tell me that the product is appealing, the product is great, and we have just to make sure that we have more people that go through the door.”
9. SAP SE (NYSE:SAP)
Number of Hedge Fund Holders In Q2 2024: 31
SAP SE (NYSE:SAP) is a major player in the global enterprise resource planning and management industry. It is a brand name in the sector, with some of the largest companies such as Apple, Walmart, and Amazon using its software. This provides SAP SE (NYSE:SAP) with a wide moat, as big firms in particular are unlikely to change their software due to high costs and the risks of disruption. The firm’s software centered business model also provides it with a high margin operation and stable recurring revenue which can be used to generate stable cash flow. As per Gartner, SAP SE (NYSE:SAP) holds a 24% share of the ERP market, and despite a slowdown in enterprise spending in a high interest rate era, the firm’s cloud backlog and ERP revenue jumped by 28% and 33% during the second quarter, respectively. SAP SE (NYSE:SAP) is currently undergoing a crucial phase through which it plans to shift to a subscription based model from a license model. Through this, it aims to spread customer spending over a longer period, but SAP SE (NYSE:SAP) could face headwinds if customers are hesitant.
SAP SE (NYSE:SAP)’s management explained why it’s immune to macroeconomic headwinds during the Q2 2024 earnings call:
“I mean, Mark, indeed, I mean, we have seen a fantastic performance in half year 1, and now entering half year 2, we see very healthy pipeline. And pipeline means sales pipeline but also I see a very strong innovation pipeline.
Now when you sit together with our product owners and see what we are delivering on GenAI use cases and the customers who are sharing their feedback early on, it’s pretty exciting. I mean they see a ton of value, and you have seen now in Q2 already the first impact of Business AI on our numbers.
And then second, what I also see clearly working now is the best of suite. I mean 4 years back, we were rightfully criticized for having a bunch of best-of-breed solutions. But when you want to have a high-quality AI, when you want to steer your business end to end, when you want to connect your commerce and your omnichannel with supply chain and when you want to connect your procurement with the warehousing, I mean, that all comes together on BTP.
And I would say we are also just at the beginning. I mean please don’t forget, when customers are using their ECC solution, so their on-premise monolithic ERP solution today, that doesn’t mean that they use all the modules in the past. And now with our land-and-expand strategy, we have really, I mean, a motion that customers are really landing. And then they get that they have to connect the different parts of their company and the different parts of the supply chain. And that’s why we also stay confident for the second half of the year.”
8. UBS Group AG (NYSE:UBS)
Number of Hedge Fund Holders In Q2 2024: 33
UBS Group AG (NYSE:UBS) is a diversified Swiss bank with a presence in wealth management, asset management, investment banking, and corporate and personal banking. The firm became quite crucial to global financial stability in 2023 when it bought out the assets of distressed Swiss bank Citibank. Citibank was UBS Group AG (NYSE:UBS)’s largest competitor in the Swiss market and the bank was able to buy its rival for an unbelievable 80% discount. The deal appears to have come just in time for UBS Group AG (NYSE:UBS), as lower rates are expected to also lower revenues for banks while also helping them in the form of lower costs. However, as it brings Credit Suisse’s assets under its portfolio, UBS Group AG (NYSE:UBS) is experiencing growth. During Q1, it reported $1.8 billion in profit which was more than 3x of analyst estimates of $598 million. As of H1 2024, UBS Group AG (NYSE:UBS)’s wealth management assets jumped by 3% to $54 billion and the bank can see additional tailwinds from the Credit Suisse deal in the future. Yet, it could also impact the income statement if UBS Group AG (NYSE:UBS)’s capital requirements are also increased.
The global banking sector has been in a tussle with regulators for Basel III regulations. Here’s what UBS Group AG (NYSE:UBS)’s management had to say on this front during the Q2 2024 earnings call:
“So on Basel III final as mentioned, we still expect $25 billion impact is 5% of risk-weighted assets, so in that range. As you mentioned, we guided in the fourth quarter in our investor update that $15 billion is in the core, $10 billion is in non-core. I think for now, that split remains pretty robust in terms of how we’re thinking — how we’re seeing it, and actually we’ll continue to work down the NCL portfolio to make that impact lessened over time. In terms of the NII guidance for P&C, just to — you asked for clarity on — it is in Swiss francs, so we’re guiding in Swiss francs. We’ll offer both in the future to sort of help. As I mentioned, in 3Q, we see a low single-digit down in Swissy, but flat sequentially in USD.
And as I mentioned, I think that’s a good outcome that we’ve had a number of headwinds that we’ve been working through sort of reaffirm the guidance for the full-year is also a function of some management actions that have been taken, including some loan repricing actions that have helped. So those are the drivers of the NII guidance for P&C.”
7. GSK plc (NYSE:GSK)
Number of Hedge Fund Holders In Q2 2024: 36
GSK plc (NYSE:GSK) is a global pharmaceutical company headquartered in Brentford, United Kingdom. As it has been operating in the pharmaceutical industry for more than three centuries, the firm has been able to build a diversified product portfolio. This enables GSK plc (NYSE:GSK) to sell generic and specialty medicines, as well as vaccines — the end result of which means that it can earn consistent revenue even if consumer and healthcare spending is low in a tough economy. GSK plc (NYSE:GSK) has a whopping £2.9 billion in cash and equivalents, which enables it to keep the pedal to the metal when it comes to a robust pipeline. The firm currently has 70 new drugs in its pipeline, out of which seven are in phase three testing. With this pipeline, GSK plc (NYSE:GSK) aims to generate £38 billion in sales in 2031. If achieved, this would enable the firm to grow its current trailing twelve month revenue of £31 billion by 21%. Consequently, investors have to keep up with any trial results, and also ensure that GSK plc (NYSE:GSK)’s high growth drugs such as Nucala and Cavenuva maintain their momentum.
GSK plc (NYSE:GSK) is leading the market with its HIV portfolio. Here’s what management shared during the Q2 2024 earnings call:
“Our oral 2-drug regimens and long-acting injectables continue to transform the HIV marketplace. Dovato delivered sales of £551 million in the quarter. The strong body of clinical data and real-world evidence reinforcing the efficacy and durability of this medicine continues to grow. At the International AIDS conference last week, results of the PASO DOBLE study a large head-to-head randomized clinical trial of Dovato compared against the 3-drug regimen, Biktarvy, showed non-inferior efficacy and significantly less weight gain.
This is important because we know people living with HIV are concerned about taking more medicines as they age as well as the long-term risk of metabolic diseases that can come with weight gain. Our long-acting portfolio also continues to perform strongly, delivering more than 50% of total HIV growth. Cabenuva grew 42%, driven by patient preference and proven and durable efficacy. CASM LATITUDE data presented at CROI and data from real-world cohorts that include over 10,000 people living with HIV in diverse settings has resonated strongly with physicians and has supported increased breadth and depth of prescribing. Apretude grew more than 100% in the quarter. This medicine has demonstrated proven superior efficacy compared with daily orals and a positive safety profile and high patient preference.
As a reminder, the registrational HPTN 084 study of PrEP in women was the first to show 0 infections in participants who received injections as described per protocol. We believe that long-acting therapies are the future of HIV care, empowering people impacted by HIV with choice and addressing the barriers standing in the way of reaching the end of the HIV epidemic. Looking at the long-acting market, we can see that the treatment market is currently approximately 10x larger than the PrEP market at about £20 billion, which will have a significant impact on the sales potential for long-acting options. In the long-acting inject for treatment setting, there are no competitor launches planned before 2028. We continue to see strong progress across our pipeline.”
6. BP p.l.c. (NYSE:BP)
Number of Hedge Fund Holders In Q2 2024: 38
BP p.l.c. (NYSE:BP) is a British oil giant that is one of the few mega players in the industry that has pivoted to generating energy wind power. The firm’s focus on clean energy and associated technologies, such as hydrogen and carbon capture provides it with the ability to pivot to the industry with time. However, as it focuses on the future, BP p.l.c. (NYSE:BP) has to keep an eye on the present if it’s to keep investors happy. On this front, the firm aims to increase its upstream production in 2024 in order to keep up with peers. Like Shell, BP p.l.c. (NYSE:BP) is also focusing on the natural gas and liquefied natural gas markets (LNG) since these are cleaner fuels compared to other petroleum products. Its performance therefore hinges on successfully penetrating these markets, and BP p.l.c. (NYSE:BP) is also investing heavily in hydrogen production, unlike several other mega oil peers. Additionally, to keep investors happy, the firm has also announced $14 billion in share buybacks until the end of 2025.
BP p.l.c. (NYSE:BP) is also operating in the high growth US Permian region. Here’s what it shared during the Q2 2024 earnings call:
“So we’ll continue to drill out the Permian and gradually fill that system up entirely. We’ll probably hit peak production for liquids in the Permian around 2027, based on the last analysis I did. And the other very interesting thing that we talked about while I was there is, they’re rethinking the Eagle Ford. So we have 500 wells there that have been producing for about a decade. They were fracked a decade ago. Obviously, fracking technology has moved on materially since then. So they’ve gone in and done 50 re-fracks. And the returns on these things are unbelievable. With the new technology on the fracks, you’re getting all kinds of liquid production coming out of them. So we trialed 30. We now have 500 opportunities. The Gordon is working with them on to decide at what pace we fund those.
And the last thing I’d say on the Eagle Ford is, they also started to down space, which is very counter to what you think of in some of these plays that maybe you don’t down space, you’re getting it through laterals. But what they found is, the couple of downspacing wells they’ve drilled have delivered 3,700 barrels of oil a day, which is way above POPs, even what we’re seeing in some of the Permian acreage. So the Eagle Ford is opening back up to us, and it’s this mantra that we always have to think about with resources is, once you think you’re done on recovery factor, have another go at technology and see what happens. And that’s what we’re proving in the Eagle Ford. They used to talk about recovery factors of 7% to 10%. That might resonate with you for the Permian.”
5. Shell plc (NYSE:SHEL)
Number of Hedge Fund Holders In Q2 2024: 49
Shell plc (NYSE:SHEL), like BP, is another mega oil firm that is focusing on developing cleaner fuels. Consequently, during the first half of 2024, 92% of its exploration, upstream, and renewable revenue come from natural gas or renewable sources. However, Shell plc (NYSE:SHEL)’s largest business is still its marketing division which includes revenue from selling wholesale commercial fuels. It earned the firm $62 billion in sales in H1, which accounted for 42% of the firm’s overall sales. This dependence has also forced Shell plc (NYSE:SHEL) to shift its strategies lately. It now aims to maintain current production volumes until 2030, which is a marked change over the previous plan to cut it by 55%. Shell plc (NYSE:SHEL)’s pivot to natural gas and liquefied natural gas (LNG) can set it up well for a future that prefers cleaner burning fuels. The firm also aims to invest up to $15 billion in clean energy by 2025, to create exposure to markets such as EV charging.
Here’s what Shell plc (NYSE:SHEL)’s management is planning for its clean energy initiatives:
“Firstly to say, we have talked about $10 billion to $15 billion of investment between 2023 and 2025 in the low carbon space. We have also said that these are nascent businesses, suspending that amount of money, we have to really be conscious of the business cases that we are driving. And critically, I would say, we are doing this for shareholder value creation. So we have to really be clear that we have line of sight to be able to actually get accretive value as a result of this.
Now we are learning through the process. I will admit to you that there are certain things which we have gotten into where we said, let’s pause come out of such as, for example, our Power Home business. At one point, we got out of it, hydrogen into mobility. We’ve gotten out of it. So we’re really trying to make sure that we lean in, we learn and then we focus. What do we see that creates the most opportunities right now, biofuels, as I’ve talked about earlier, my convictions, including, by the way, renewable natural gas such as our Nature Energy platform. Green hydrogen has to come in within the right context of regulatory support. I’ll leave Sinead to unpack that a bit more. We do like the nexus of power trading, including with flex generations of battery storage, combined cycle gas turbines, et cetera.
Those are areas where we are continuing to lean in because we are now seeing that we can create value out of them. Where does CCS fit into that? CCS, we think in the — for the coming years is a critical part of our own decarbonization journey to get to the 50% reduction in Scope 1 and 2. The Polaris one, which was in Canada, is linked to our Scotford asset, where we expect to capture some 650,000 tonnes per year from that facility. And the reason we like that is we’ve done it in Canada before. We’ve done it with Quest. We’ve done it for that facility. So it’s derisked. We know what we’re doing in that space. And the business model is one where the credits in Canada allow us to be able to create value from that investment. So it’s very much the ability to be able to monetize some of those opportunities and to sell the products, the low carbon products to our customers at a premium is what we go after.”
4. AstraZeneca PLC (NASDAQ:AZN)
Number of Hedge Fund Holders In Q2 2024: 49
AstraZeneca PLC (NASDAQ:AZN) is a British pharmaceutical company that shot to fame with its coronavirus vaccine. Since the start of 2021, its shares have gained 56%, even though the virus is now a thing of the past. This share price gain, which has accompanied a 70% revenue growth on an absolute basis between 2020 and 2023, is based primarily on AstraZeneca PLC (NASDAQ:AZN)’s ability to leverage its research and development capabilities to develop new drugs. On this front, the firm is developing drugs for small cell lung cancer, stage three lung cancer, and brain metastases from breast cancer. AstraZeneca PLC (NASDAQ:AZN)’s treatments that target these ailments are Imfinzi, Tagriso, and Enhertu, respectively. Imfinzi and Enhertu have performed well in phase three trials, with the former having improved the risk of death by 27% while the latter has a progression free survival rate of 62%. Consequently, AstraZeneca PLC (NASDAQ:AZN)’s shares gained 28% between the start of the year and the August close. However, the shares have lost 10% in September so far, primarily due to the lung cancer drug DATO-Dxd failing to meet investor expectations. Looking ahead, AstraZeneca PLC (NASDAQ:AZN)’s hypothesis depends on these treatments, with tailwinds in case of strong trial performance.
During the Q2 2024 earnings call, AstraZeneca PLC (NASDAQ:AZN)’s management also highlighted its current drug portfolio:
“As Pascal just highlighted, we have had a very strong start to the year with total revenue increasing 18%. This was driven largely by substantial product sales growth across the portfolio. Alliance revenue also increased by 50% in the first half, mainly driven by an increase in HER2 sales in regions where Daiichi Sankyo record revenue. Please turn to the next slide. This is our core P&L. In the first half, total revenue grew 18%, as I just mentioned, and our core product sales gross margin was 82.4%. We’ve previously said that we anticipate a slightly lower core product sales gross margin for the full year versus 2023, and we expect downward pressure in the second half driven by the usual seasonal impact of medicines such as FluMist, as well as increased before supply, which comes at a lower gross margin.”
3. Sea Limited (NYSE:SE)
Number of Hedge Fund Holders In Q2 2024: 63
Sea Limited (NYSE:SE) is a Singapore based technology company that operates in the Asian Pacific eCommerce, financial services, and content streaming industries. This provides the firm with one of the fastest growing markets in the world. However, Sea Limited (NYSE:SE) is also operating in a highly competitive market in which giants such as TikTok also operate. Sea Limited (NYSE:SE) is facing a lot of competition from TikTokSea Limited (NYSE:SE) in one of its biggest markets, Indonesia. Despite this, the stock has performed well over the past 12 months and has gained 125%. Moving forward, Sea Limited (NYSE:SE)’s hypothesis is dependent on its eCommerce platform Shopee turning operating income positive, the gross merchandise volume (GMV) that flows through its platform, and the user growth for its digital content platform. Sea Limited (NYSE:SE) benefits from diversification as while eCommerce operating income can be a tough nut to crack, content streaming provides some stability.
Artisan Partners mentioned Sea Limited (NYSE:SE) in its Q2 2024 investor letter. Here is what the fund said:
“Sea rose during the quarter due to growing evidence of a stabilizing competitive environment, potential improvement in its Free Fire gaming franchise, and strong quarterly results with improving profitability.”
2. Novo Nordisk A/S (NYSE:NVO)
Number of Hedge Fund Holders In Q2 2024: 67
Novo Nordisk A/S (NYSE:NVO) is a specialty Danish pharmaceutical and biotechnology company that focuses on developing and selling treatments for diabetes, weight loss, and rare diseases. Courtesy of its weight loss drug Wegovy, the firm has managed to grow its revenue by 31% between 2022 and 2023. However, 2023 has also seen a markedly different environment for Novo Nordisk A/S (NYSE:NVO)’s weight loss drugs as Eli Lilly’s Zepbound secured FDA approval. in November. Now, with the US government upping the stakes on making drugs affordable through Medicare, reports suggest that Wegovy will be under the radar quite soon. This could create headwinds for Novo Nordisk A/S (NYSE:NVO), as the firm has already struggled with sales after lowering the prices of its weight loss drug. However, its considerable resources, as evidenced by cash and equivalents of $7.9 billion coupled with a specialty focus on diabetes have allowed Novo Nordisk A/S (NYSE:NVO) to have a robust drug pipeline. Two new drugs that it is developing are amycretin and CagriSema, and the stock could respond favorably to positive regulatory news.
Polen Capital mentioned Novo Nordisk A/S (NYSE:NVO) in its Q4 2023 investor letter. Here is what the fund said:
“As we discussed in last quarter’s commentary, Novo Nordisk is a newer addition to the strategy. Over the fourth quarter, we continued to build the position to an average weight. As a reminder, Novo Nordisk is a global pharmaceutical company based in Denmark and has long been the leader in developing insulin for diabetes patients. In recent years, the company’s innovation into GLP-1 drugs has been shown not only to help diabetics control blood sugar levels but also to have significant efficacy in weight loss. Obesity has become a global epidemic, creating materially negative knock-on effects for humans that range from an increase in cardiovascular events and, thus, higher mortality to a lower general quality of life. We believe that, over time, payors will recognize the value of these obesity treatments to both patients and the overall healthcare system.”
1. ASML Holding N.V. (NASDAQ:ASML)
Number of Hedge Fund Holders In Q2 2024: 81
ASML Holding N.V. (NASDAQ:ASML) is a Dutch company that makes and sells semiconductor fabrication machines. Its equipment is the high end of its kind in the world, which provides the firm with a wide and sustainable moat. This is because ASML Holding N.V. (NASDAQ:ASML)’s machines are made of thousands of components and require advanced knowledge to build that is hard to replicate. As a result, its market capitalization of $342 billion makes it Europe’s most valuable company in terms of market capitalization. ASML Holding N.V. (NASDAQ:ASML)’s machines are used by all of the world’s leading chip manufacturers, and the latest machines, which are based on EUV, and high NA EUV, are indispensable for making chips with the 3 nanometer, 2 nanometer, and subsequent technologies. ASML Holding N.V. (NASDAQ:ASML) also benefits from maintenance operations as it regularly works with chip makers to maintain its equipment and provide upgrade kits.
Polen Capital mentioned ASML Holding N.V. (NASDAQ:ASML) in its Q4 2023 investor letter. Here is what the firm said:
“Netherlands-based ASML and Japan-based Lasertec play dominant roles within different segments of the global semiconductor industry. In both cases, shares rallied significantly in the fourth quarter of 2023, prompting our positions to grow as a percentage of the overall portfolio. We believe both companies will see demand for their products as extreme ultraviolet (EUV) lithography and soon high-numerical aperture lithography must be utilized to manufacture the world’s smallest chips. However, in our estimation, 2024 could deliver a year of less exciting growth for the semiconductor industry, which prompted us to trim these positions back.”
ASML is the best global stock to buy according to hedge funds. While we acknowledge the potential of ASML as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than ASML but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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