This article looks at the 10 best NASDAQ stocks to invest in right now.
This year has been a healthy year for the American stock market, fueled by a strong performance from technology stocks. Several indices capped their best week of the year in early September as stocks rose ahead of the Federal Reserve meeting where the central bank was expected to cut interest rates. NASDAQ has led the charge and registered a 20% growth during the first half.
While the index lists over 3,100 companies from various sectors, the rally has been led by its top seven holdings which account for 52% of the index. All of them being tech stocks. There is a mix of optimism and skepticism among investors on whether NASDAQ will be able to continue its good run over the second half of the year. Historical data over the past decade shows that in most instances, NASDAQ has finished stronger during the back half of the year. There have only been two years between 2014 and 2023 during which NASDAQ’s year-end returns were lower than first-half returns.
However, Fundstrat Global Advisors’ Tom Lee, who is generally bullish on the stock market, told CNBC earlier this month that investors need to be cautious, as stocks could fall 10% during the next eight weeks amid interest rate cuts and the nervousness around the upcoming presidential elections. The co-founder of the research firm also suggested that if the dip is too strong, it should be viewed as a buying opportunity for investors. Lee has largely been on the money and nailed most stock calls this year.
Other analysts also anticipate market volatility ahead of the presidential elections. Liz Young Thomas, the head of investment strategy at SoFi, while talking to Business Insider noted that stock activity lags between June and August while traders are on vacation. This results in strong market performance aided by thinner trade volumes. The activity jumps up significantly in September when they return to their desks, which often leads to stock price volatility. According to her, a two percent shift in share price in either direction has become the norm in September. However, during election years, the volatility is at its peak in mid-October instead of September, and the market returns to normalcy after the results are announced.
LPL Financial’s Adam Turnquist also expects seasonal shakiness in the months ahead, but pointed out, like Lee did, that the dip presents an opportunity to buy when the share is trading low and earn high returns when the market stabilizes.
Buying the September or October lows has been a very good trade. October, things start to improve, and then you have this November, December, year-end rally, typically very high average returns and high positivity rates for those months.
Both Turnquist and Young Thomas agreed that existing portfolios should not be readjusted because of seasonal volatility because it is short-term and hard to forecast.
With that said, let’s head over to see some of the best NASDAQ stocks to buy right now, given the current trends and future projections.
Photo by Pascal Bernardon on Unsplash
Methodology
We scanned Insider Monkey’s database of 912 hedge funds for the second quarter of 2024 to look for stocks listed on NASDAQ and picked the top 10 companies with the highest number of hedge funds having stakes in them. We ranked them in ascending order of hedge fund holders in each company.
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 Best NASDAQ Stocks To Invest In Right Now:
10. Adobe Inc. (NASDAQ:ADBE)
Number of Hedge Fund Holders: 107
Adobe Inc. (NASDAQ:ADBE) is an American application software company headquartered in San Jose, California. It offers students and creative professionals various programs and services related to web design tools, digital art, content creation, and other services. It is one of the best NASDAQ stocks to invest in right now, with 107 hedge funds owning stakes in the company at the end of Q2 2024, as of Insider Monkey’s database.
During Q3 2024, it beat analysts’ expectations and reported an EPS of $4.65 compared to forecasts of $4.53 per share. Revenue for the quarter totaled $5.41 billion, representing an 11% increase year-over-year. The results were driven by strong performances across the Digital Media segment, in Creative Cloud, Document Cloud, and Experience Cloud. There has also been a growing number of users of new products and services launched by the company over the last 18 months, such as Adobe GenStudio and Firefly Services, with the latter adopting over 12 billion generations.
The introduction of AI Assistant has been a success as well and has transformed the way people extract value from documents on Adobe Acrobat and Reader. Significant advancements were released in Q3 including the ability for users to comprehend multiple documents in one go. This has translated to an increase in AI Assistant usage, resulting in a 70% surge in AI interactions, quarter-over-quarter. Adobe Inc. (NASDAQ:ADBE) has also secured key customer wins this year, both in the private and public sectors tied to PDF-based collaboration and the Content Credentials offering.
After a robust financial display in Q3, the company has revised its guidance for Q4 and now expects revenue of between $5.50 and $5.55 billion, and earnings per share in the range of $4.63 and $4.68. However, this is weaker than what analysts had forecast for Q4. As a result, Adobe Inc. (NASDAQ:ADBE)’s share price crashed 8% a day after the guidance was released on September 12. Another factor stirring investor concern is that the $550 million guidance for net new Digital Media ARR in Q4 is the lowest on record for the fourth quarter.
Despite a slight dip in share value and some investor concerns about Q4 guidance, most analysts are still bullish on the stock and believe that the company’s outlook for the coming quarter is likely conservative. Street analysts have maintained a consensus Buy rating on the stock with an average price target of $608.28, representing a 19.71% upside from its current trading level.
9. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 108
Advanced Micro Devices, Inc. (NASDAQ:AMD) is one of the world’s leading computer processors and related technologies manufacturers. Its main products include microprocessors, graphic processors, personal computers, workstations, and embedded system applications. The company has also recently expanded to new markets such as high-performance computing and data centers.
During the second quarter of 2024, Advanced Micro Devices, Inc. (NASDAQ:AMD) reported a revenue of $5.8 billion, up 9% year-over-year, driven by higher-than-anticipated sales of Instinct, Ryzen, and EPYC processors. Data center sales represented over half of all revenue. The segment had a 115% growth in revenue, totaling $2.8 billion. The company’s gross margin also grew by 3%, while EPS registered a 19% increase to total $0.69, beating forecasts of $0.678 per share.
A steep rise in Instinct MI300 GPU shipments and increased deployment of EPYC CPUs significantly contributed to the data center’s revenue, with several hyperscalers selecting EPYC processors to power major portions of their applications. The company is looking forward to launching Instinct MI325X soon, which will offer twice the memory capacity of MI300 and 1.3 times improved performance than competitive offerings. The Zen-5 Turin CPU processors, publicly reviewed in June this year, are also likely to boost sales during the second half of the year.
For Q3, Advanced Micro Devices, Inc. (NASDAQ:AMD) anticipates revenue in the range of $6.4 billion to $7 billion, sequentially growing 15%. Since the announcement of results for Q2 and guidance for the following quarter on July 30, the stock has surged 38% and has an average share price target of $195.93, representing a further 24% upside from its current level. There is also a consensus among Street analysts on the stock’s Strong Buy rating. Advanced Micro Devices, Inc. (NASDAQ:AMD) is among the best NASDAQ stocks to invest in right now, with 108 hedge funds having investments in the company according to Insider Monkey’s database for Q2 2024.
However, the company does face some tests in the gaming segment, where revenue declined 59% to $648 million for the quarter, due to a drop in semi-custom SoC sales. Demand for these continues to remain flat, and revenue is set for further decline during the second half of 2024. The embedded segment also reported a 41% slide in revenue but is expected to improve in the quarters ahead. Despite these challenges, the company’s overall outlook is positive amid a strong trajectory in the data center space. The planned acquisition of Silo AI, the largest private AI lab in Europe, in Q3 is also set to further boost the bullish sentiment around the stock.
8. Micron Technology, Inc. (NASDAQ:MU)
Number of Hedge Fund Holders: 120
Micron Technology, Inc. (NASDAQ:MU) is an American manufacturer of computer memory and computer data storage, including random-access memory, flash memory, and USB drives. Its products and services are used in servers, smartphones, tablets, and laptops. The company is considered a major player in the memory market and is recognized for its technological advancements.
The company delivered strong financial results during Q3 2024, reporting a revenue of $6.8 billion, up 82% compared to last year. It also comfortably beat analysts estimates, registering EPS of $0.62 against expectations of $0.48. President and CEO, Sanjay Mehrotra, credited the robust performance to better pricing, a strengthened product mix, and an improvement in the demand and supply conditions in the industry. Data center revenue grew 50% sequentially, as the company expanded its market share in high-margin AI segments such as high-bandwidth memory (HBM) chips, high-capacity DIMMs, and data center SSDs.
Despite a strong financial quarter, Micron Technology, Inc. (NASDAQ:MU)’s share price has fallen by over 41% since the announcement of these results on June 26 as guidance for the remainder of the year failed to impress investors who were expecting outsized returns. For Q4, the company expects a total revenue of $7.6 billion, with gross margin in the range of 34.5%. Operating expenses are forecast to be around $1.06 billion. The company also plans on spending $3 billion in capital expenditure during the quarter to reach $8 billion in capital investments for FY24.
While the drop in share price has led to some bearish sentiment around the stock, Micron Technology, Inc. (NASDAQ:MU)’s shares are still trading at roughly double the level they were at the beginning of 2023. Moreover, the volatile trend in share price for the company mirrors its peers in the semiconductor industry which is still in its transitionary period with high obsolescence and shrinking product life cycles. Most analysts still maintain a Strong Buy rating for Micron, and expect the share to regain its lost value, with the stock having an average share price target of $149.20, representing an upside of 67% from current trading levels. According to Insider Monkey, 120 hedge funds had investments in the company as of Q2 2024, making it one of the best NASDAQ stocks to invest in right now.
7. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 130
Broadcom Inc. (NASDAQ:AVGO) is a leading developer, manufacturer, and supplier of semiconductor and infrastructure software products headquartered in Palo Alto, California. The company has a diverse revenue stream, which provides it a competitive edge in the semiconductors industry by ensuring consistently high revenues through quarters. It offers a wide range of products and services, including wireless chips, AI networking solutions, and other accessories for 5G-compatible smartphone manufacturers. The company also sells optical components to firms in the automotive and industrial space.
The semiconductor company recently announced its Q3 2024 results, during which it beat earnings expectations with an EPS of $1.24 against forecasts of $1.22. Revenue for the quarter was recorded at $13.1 billion, registering a 47% growth year-over-year, while operating profit was up 44% compared to the same period in 2023. The management attributed these results to the strong surge in AI revenue, the acceleration of VMware bookings, and the stabilization of non-AI semiconductor sales.
Broadcom Inc. (NASDAQ:AVGO) completed its $69 billion acquisition of cloud computing company, VMware, in November last year, which is already paying dividends in the form of increased revenue in the infrastructure software segment. During the quarter, the segment generated a revenue of $5.8 billion, which was 200% higher year-over-year. Of this amount, $3.8 billion, or 65%, was contributed by VMware. Investors are confident that the integration of VMware is going to further aid in revenue growth in the times ahead. Mar Vista Focus strategy stated the following regarding Broadcom Inc. (NASDAQ:AVGO) in its Q2 2024 investor letter:
Broadcom recently acquired VMware, the leader in virtualization software targeting the enterprise market. The integration of VMware is tracking ahead of plan as management has simplified its product bundles, transitioned to a subscription revenue model, and reduced operating costs. We believe this simplified go-to-market structure will result in strong top-line revenue growth and expanding operating margins. We believe Broadcom will compound intrinsic value per share in the mid-20% range over the intermediate term as it benefits from the AI-infrastructure build-out, a cyclical recovery in its legacy semiconductor business, and modestly accelerating growth from its infrastructure software business as VMware is successfully integrated.
Further reasons to be bullish about the stock stem from the fact that Broadcom Inc. (NASDAQ:AVGO) ended Q3 with $10 billion in cash. It is also taking steps to reduce its debt, and as part of these efforts, replaced $5 billion of floating rate notes with new fixed senior notes and used proceeds from the sale of VMware’s End-User Computing business to lower the floating rate by another $4.2 billion. Moreover, there are reports about the company being in talks with OpenAI on the development of a new artificial intelligence chip. This will help the ChatGPT-maker overcome the shortage of expensive graphic processing units by having its chips.
While the expectation of a decline in consolidated gross margins during Q4 because of a higher revenue mix of semiconductors has led to some bearish sentiment, the general outlook for the stock is bullish. The stock has received a Strong Buy rating from most Wall Street analysts and has a share price upside potential of around 11%. It is one of the best NASDAQ stocks to invest in right now, with 130 hedge funds having investments in the company, according to Insider Monkey’s database for Q2 2024.
6. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 165
Alphabet Inc. (NASDAQ:GOOG) is an American technology giant headquartered in Mountain View, California. It owns a wide range of products and platforms, such as Google Search, Google Maps, Google Cloud, Gmail, Chrome, YouTube, and more. It is one of the world’s largest tech companies by revenue.
According to Insider Monkey’s database, 165 hedge funds had stakes in the company as of Q2 2024, making it one of the best NASDAQ stocks to invest in right now. During the second quarter of the year, the company reported EPS of $1.89, beating expectations of $1.85 per share. Consolidated revenues totaled $84.7 billion, up 14% year-over-year. Net income was recorded at $23.6 billion. These robust results were led by a strong performance from Google Search and Google Cloud.
Alphabet Inc. (NASDAQ:GOOG)’s Cloud business crossed the $10 billion quarterly revenue mark for the first time and posted $1 billion in operating profit – which was also a first. Revenues within Google Services reached $73.9 billion, up from $66.2 billion during the same quarter in 2023. The ‘Google Search & Other’ segment revenue totaled $48.5 billion, while YouTube and Google Network generated $8.7 billion and $7.4 billion, respectively, in revenues during the quarter. These results reflect the fast pace of growth in the company and have helped garner investor confidence. The London Company Large Cap Strategy stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its Q2 2024 investor letter:
Alphabet Inc. (NASDAQ:GOOG) – GOOG was a top performer this quarter as it reported strong Search revenue, tighter cost controls, and momentum in Cloud. Both direct and brand Search ads were better than expected and the strength in YouTube monetization continues. Expense controls have translated to 700bps of margin improvement. Management is removing layers to improve efficiency, which should drive margins higher. GOOG also provided details on paths to monetize Al for advertisers. GOOG initiated a dividend during the quarter to return additional cash to shareholders. It has a solid balance sheet, a significant market share, and generates strong returns.
The future outlook for the company looks solid, with consensus among analysts on the stock’s Buy rating. It also has a share price target of $198, representing a 21% upside from its current level. There are also reports of Alphabet Inc. (NASDAQ:GOOG) negotiating a $23 billion acquisition of Wiz, a cybersecurity firm, that offers AI automation of tasks, threat detection, and vulnerability analysis. If the deal goes through, it will open the doors for the company in the cloud-native security arena by boosting its Mandiant cybersecurity platform.
However, a recent defeat in an anti-trust lawsuit, where the Federal Court judge called Alphabet a ‘monopoly’ has come as a setback for the company. Judge Amit Mehta ruled that Alphabet stifled competition in the online search market to maintain its monopoly. This has led to some bearish sentiment around the stock, as it has hurt the company’s reputation and can also result in billions of dollars in hefty fines or legal settlements.
5. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 179
NVIDIA Corporation (NASDAQ:NVDA) is a software and fabless company headquartered in Santa Clara, California, that provides graphics computing and networking solutions. It is one of the best NASDAQ stocks to invest in right now, with its share price having grown by over 2000% in the last five years, driven by strong demand for its graphics processing units (GPU) and AI models.
It remains the go-to company for cloud computing firms – including tech giants – looking to procure graphics processing units (GPUs) and semiconductors as they increase investments in artificial intelligence. This has been the catalyst behind NVIDIA Corporation (NASDAQ:NVDA)’s financial growth in the last few years.
The results continue to be strong. During Q2 FY25, the company generated a revenue of $30 billion, increasing 122% year-over-year, and 15% sequentially, fueled by surging demand for data center chips. It was well above the outlook of $28 billion. Net income for the quarter totaled $16.6 billion, resulting in EPS of $0.68, beating expectations of $0.645. For Q3, the company expects total revenue to be $32.5 billion, with gross margins between 74.4% to 75%. NVIDIA Corporation (NASDAQ:NVDA) also anticipates continued growth for Hopper Architecture and Blackwell products during the second half of the year.
There is consensus among Street analysts on the stock’s Strong Buy rating, with its share price projected for a further 24% growth in the coming months. Investors also remain bullish on the stock. Ithaka US Growth Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q2 2024 investor letter:
NVIDIA Corporation (NASDAQ:NVDA) is the market leader in visual computing through the production of high-performance graphics processing units (GPUs). The company targets four large and growing markets: Gaming, Professional Visualization, Data Center, and Automotive. NVIDIA’s products have the potential to lead and disrupt some of the most exciting areas of computing, including: data center acceleration, artificial intelligence (AI), machine learning, and autonomous driving. The reason for the stock’s appreciation in the quarter was twofold: First, the stock benefited from tremendous excitement surrounding the further development of generative AI and the likelihood this would necessitate the purchase of a large number of Nvidia’s products far into the future; Second, Nvidia posted another strong beat[1]and-raise quarter, where the company upped its F2Q25 revenue guidance above Street estimates, showcasing its dominant position in the buildout of today’s accelerated computing infrastructure.
According to Insider Monkey, 179 hedge funds had a stake in the company as of Q2 2024.
4. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 184
Apple Inc. (NASDAQ:AAPL) is an American technology company headquartered in California, which is known for its consumer electronics, software, and other related services. It is one of the best NASDAQ stocks to invest in right now, with 184 hedge funds holding a stake in the company at the end of Q2 2024, according to Insider Monkey’s database.
The recently concluded third quarter of fiscal year 2024 was one of the best quarters for the company in a long while, during which it reported a June quarter record revenue of $85.8 billion, up 5% compared to the same period last year. Revenue from products totaled $61.6 billion, representing a 2% year-over-year increase. The growth was aided by the launch of iPad Pro and iPad Air. Services revenue reached an all-time high of $24.2 billion during Q3, up 14% from last year. The company reported a gross margin of 46.3%, which fell within the higher range of guidance for the quarter. EPS was measured at $1.40, beating estimates of $1.35 per share.
The company generated $39.3 billion from the sale of iPhones, which accounted for nearly half of Apple Inc. (NASDAQ:AAPL)’s overall revenue for the quarter. However, the figure was down 1% year-over-year. This was likely due to a 6.5% drop in sales from Greater China, where the iPhone faces fierce competition from local manufacturers like Huawei. Mac revenue reached $7 billion, up 2% from last year. The biggest success story for the quarter came from iPad, which registered a 24% revenue growth to a total of $7.2 billion.
While the decline in iPhone sales has created some bearish sentiment around the stock, most investors are bullish on the company in anticipation of the incorporation of artificial intelligence in the new iPhone 16. Mar Vista Focus strategy stated the following regarding Apple Inc. (NASDAQ:AAPL) in its Q2 2024 investor letter:
Investors were reminded of the strength of the Apple Inc. (NASDAQ:AAPL) ecosystem as management demonstrated how generative AI solutions would be integrated into Apple’s 1.2 billion iPhone installed base. Apple plans to integrate generative AI features into its iOS 18, which will be broadly released in the fall with the iPhone 16. We believe Apple should benefit from generative AI as it will spur a meaningful iPhone upgrade cycle and create new avenues of monetization through its app store and advertising offerings. We believe this will support intrinsic value growth ranging between high-single-digits and low-double-digits over our investment horizon.
Street analysts have maintained a consensus Buy rating on the stock and a share price target of $242.41, representing a 5.89% upside from its current trading level.
3. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 219
Meta Platforms, Inc. (NASDAQ:META) is an American multinational company headquartered in Menlo Park, California. It formerly operated as Facebook, Inc. until its rebranding in 2021. It is one of the largest technology companies in the world and owns popular social media platforms such as Facebook, Instagram, Threads, and WhatsApp. More than 3.2 billion people use at least one of Meta’s apps every day, according to CEO Mark Zuckerberg.
The company posted robust financial results during the second quarter of fiscal year 2024, with total revenue reaching $39.1 billion, representing a 22% year-over-year increase. Net income for the quarter was $13.5 billion, with an earnings per share of $5.16, comfortably beating analysts’ estimates of $4.72. Revenue from Meta Platforms, Inc. (NASDAQ:META)’s Family of Apps totaled $38.7 billion in Q2, up 22% from last year. Most of this was ad revenue, with the online commercial vertical being the largest contributor, followed by gaming.
Meta Platforms, Inc. (NASDAQ:META)’s ability to generate solid ad revenue despite global economic challenges has been the catalyst behind the company’s growth and has boosted investor confidence. Its share price has grown 58% year-to-date, with analysts predicting a further 1-2% increase in the coming months. There’s a consensus among Street experts on the stock’s Strong Buy rating.
Moreover, the company has spent billions in recent years on artificial intelligence, resulting in the launch of successful products like Meta Quest 3 and Ray-Ban Meta Glasses, whose demand has outpaced the company’s expectations. These investments in advanced technology have led to a general bullish sentiment about the stock’s long-term trajectory. According to Insider Monkey’s database as of Q2 2024, 219 hedge funds have a stake in the company, making it one of the best NASDAQ stocks to invest in right now.
Having said that, while Meta Platforms, Inc. (NASDAQ:META) looks set for long-term growth, some challenges on the horizon could impact the stock in the short term. One of them is the slowdown in revenue the company has anticipated for Q3 2024 compared to last year when much of the revenue was driven by a surge of China-based advertisers on its social media apps and the growth experienced by Reels impressions. That is unlikely to happen this year. Furthermore, the company plans on spending around $40 billion on capital expenditure this year, which could impact its short-term financials, and subsequently, its share price.
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ:MSFT) is an American multinational company headquartered in Redmond, Washington, which is best known for its software products and operating systems. It has nearly tripled its valuation over the last three years and reached the $3 trillion mark. It is the second most valuable corporation in the world.
According to Insider Monkey’s database, 279 hedge funds held stakes in the company as of the second quarter of 2024. Microsoft Corporation (NASDAQ:MSFT) continues to garner immense investor confidence through its strong financial performance. During Q4 2024, the company generated a revenue of $64.7 billion, which took the annual revenue to $245 billion, representing a 15% increase year-over-year. EPS for the quarter registered a 10% growth to reach $2.95 per share, beating analysts’ expectations of $2.94.
These robust results were largely driven by Microsoft Cloud, which contributed $135 billion of the company’s overall revenue in FY2024, up 23% YoY. The company’s commercial bookings also registered a 17% increase, driven by millions of dollars of contracts for both Microsoft 365 and Azure, indicating strong customer commitment. Microsoft Corporation (NASDAQ:MSFT) anticipates the trends to continue in FY25 and has projected double-digit growth for both revenue and operating income for the year.
Another reason behind investor confidence is the company’s increased spending on AI and cloud infrastructure. Microsoft spent $19 billion in capital expenditure in Q4 alone, and investors believe that this increased spending will help the company stay at par with, if not outperform, competitors in the market. Mar Vista Focus strategy stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q2 2024 investor letter:
Microsoft Corporation (NASDAQ:MSFT) continues to occupy a strong position, poised to capture market share as businesses, both large and small, navigate the transition to a digital-first landscape and embrace generative AI-driven solutions. The company’s commanding presence in the enterprise arena, combined with its comprehensive product portfolio encompassing Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS), and Software-as-a-Service (SaaS), establishes it as a crucial provider of IT solutions for companies of all scales. Microsoft is effectively executing its strategy in a sizable market by offering a roadmap for digital transformation and the adoption of innovative, AI-driven solutions, such as ChatGPT while enhancing productivity and reducing costs. Consequently, we anticipate that Microsoft’s solutions should exhibit resilience even in a more challenging macroeconomic environment, supporting low-double-digit growth in intrinsic value within our investment horizon.
There were some segments where revenue decreased. Xbox hardware sales declined 42% during the quarter and devices revenue also experienced an 11% dip. However, the company believes this was due to their focus being more on other premium products with a higher profit margin. On the whole, there is consensus among Street analysts about Microsoft being one of the best NASDAQ stocks to invest in right now. It has a Strong Buy rating and a 12.60% upward potential in share price.
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 308
Amazon.com, Inc. (NASDAQ:AMZN) is an American technology company that deals in e-commerce, online advertising, cloud computing, artificial intelligence, and digital streaming. It is the best NASDAQ stock to invest in right now with sales soaring, driven by advancements in artificial intelligence and accelerated growth in the company’s AWS division. Moreover, according to Insider Monkey, 308 hedge funds had investments in the tech giant as of Q2 2024, with the highest stake held by Fisher Asset Management, valued at $8.4 billion.
During Q2, the company’s revenue was worth $148 billion, registering an 11% increase year-over-year. Operating income surged 91% from the same period last year to a total of $14.7 billion. Revenue for AWS was recorded at $26.3 billion, up 18.8%. The segment now has an annualized revenue run rate of over $105 billion. Advertising revenue for the quarter also crossed the $2 billion mark, contributing to the more than $50 billion advertising revenue earned by Amazon.com, Inc. (NASDAQ:AMZN) in the last 12 months. Store sales grew 9% in North America and 10% in the international markets, fueled by fast delivery and lower prices.
The company has also been spending heavily on capital expenditure and incurred $30.5 billion in capital investments during the first half of 2024. The management expects the figure to be higher during the second half of the year, mainly driven by the need for AWS infrastructure as demand surges for both generative AI and our non-generative AI workloads. Amazon’s leadership is bullish about the long-term impact of artificial intelligence on the business.
Investors also remain confident about the company’s trajectory, especially given the strong performance of AWS, where backlog increased 19% year-over-year to reach a staggering $156.6 billion at the end of Q2, indicating strong future demand. The segment’s profitability is also improving and has jumped from the mid-20% range last year to over 30% this year due to strategic decisions made over the past year to eliminate inefficiencies and reduce costs.
Ithaka US Growth Strategy stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q2 2024 investor letter:
Founded in 1994, Amazon.com, Inc. (NASDAQ:AMZN) has evolved from its early roots as an online bookstore to become one of the world’s largest eCommerce retailers. At the end of 2023, Amazon stood poised to capture ~40% of all US e-commerce sales, representing five times more share than the next closest competitor. In addition to eCommerce, Amazon Web Services (“AWS”) has become the market leader in outsourced cloud infrastructure. Further, Amazon Advertising is garnering a significant share in digital advertising, particularly product placement ads, thanks to consumers beginning their product searches on Amazon’s site. Amazon’s stock appreciated on the back of stabilization of the company’s cloud computing segment and increased confidence management would be able to contain expenses and push operating margins above prior peaks in the near-to-medium term.
The only bearish concern at this point is around the fluctuating operating margins of AWS. However, one reason behind that is the investments Amazon is making to improve efficiency and in building new products. The overall outlook for the company is positive. There is consensus among Street analysts on the stock’s Strong Buy rating with forecasts of a 16% upside in its share price.
Overall, AMZN ranks first among the 10 Best NASDAQ Stocks To Invest In Right Now. While we acknowledge the potential of technology companies, our conviction lies in the belief that 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 AMZN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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