In this piece, we will talk about the ten best NASDAQ stocks under $50 to buy.
The close of 2024’s third quarter is seeing Wall Street rejoice as the Federal Reserve finally delivers its highly awaited interest rate cut. The central bank decided to cut rates by 50 basis points, and while the immediate aftermath saw stocks close lower, the next day was the complete opposite. On the day after the interest rate cut, markets soared as investors digested the latest data set.
It saw the benchmark S&P index soar to a record close as it gained 1.70% and ended the day’s trading at 5,713 points. This wasn’t the only record set during the day, with the Dow blue chip stock index jumping by 1.26%. In terms of gains though, both of these were surpassed by the broader NASDAQ index which jumped by 2.61% during the day’s trading.
While some of these gains are naturally because of investors cheering an interest rate cut, there might be other factors at play here too. For instance, fund ClearBridge Investments head of economic and marketing strategy Jeff Schulze shared that “I think that this dramatically increases the odds of the Fed being able to stick the landing, which ultimately will be bullish for risk assets.” This might not be the end for the gains though, if we’re to consider historic data. As per Evercore ISI, the flagship S&P index has posted an average gain of 14% in the six months following an interest rate cut if the economy is not in a recession.
This market outperformance was also a reversal of the underperformance in the first five days of August which saw the flagship S&P tank by 6%. Explaining the weakness, BlackRock’s chief investment officer for global fixed income Rick Rider commented “I think the markets got ahead of themselves again in terms of interpreting that data was very soft.” Commenting on the state of the economy, which should be key for markets moving forward, he added that “Chair Powell said it’s a solid economy, and it is.”
Focusing exclusively on the NASDAQ’s performance, the composite and the top 100 stock index are up by 23.1% and 21.6%, respectively year to date. The next question to ask is, whether these gains are across the entire index or if they’re limited to just a handful of stocks. One of the narratives on Wall Street has been outperformance among large cap stocks as we covered in Goldman Sachs’ Best Hedge Fund Stock Picks: Top 20 Stocks. Using the Fidelity NASDAQ ETF as a benchmark, we find out that the top ten stocks in the index are up by 38.54%, 2.33%, 64.08%, 17.78%, 17.39%, 63.98%, 27.5%, 157.5%, 16.3%, and 22.56, respectively starting from the tenth stock to the first.
Within these, the top four stocks account for 40% of the ETF, and as the lowest of these top four stocks’ returns is still higher than the broader index’s year to date performance, it’s clear that outperformance among the largest constituents has driven the index’s return so far. Given that 50.4% of the NASDAQ is made of information technology stocks, the outperformance by AI stocks in 2024 has also driven the index.
Don’t believe us? Consider research from Bloomberg which shows that from the start of 2023 to June 2024 end, mega cap technology stocks were responsible for 60% of the benchmark S&P’s 40.5% in returns. This raises two questions. The first is whether mega cap stocks have more juice left in them, while the second is if this performance bifurcation creates an opportunity in other stocks such as small cap and value stocks. Well, banking behemoth JPMorgan believes that a “near-record discount in smaller-cap stocks may offer an opening.” Its ‘smaller cap’ stocks are defined as small and medium cap (SMID) stocks, and while the bank admits that these stocks often have high debt levels which increases their risk, the stocks with a “near record discount” do not have high debt but are nevertheless discounted.
To see how you first have to understand that small and mid cap stocks typically trade at higher price to earnings ratios than their large cap peers. This is because these stocks are inherently risky, and also because they offer a greater potential for growth. JPM’s data shows that for SMID and large cap stocks that are placed in the top 20% in terms of free cash flow margins, the SMID stocks’ forward P/E ratio relative to the large cap stocks peaked at 1.72x in November 1983 and then at 1.62x in April. Now, as of April 2024, it was 0.74x which opens up the potential for recovery as we move into the era of monetary policy loosening. This trend persisted in May 2024, with data showing that as of May 31st, the forward P/E ratio of small caps as a whole was 73% of large cap stocks, implying a 27% discount. Similar levels were previously seen around 2003, with the small cap P/E ratio soaring to roughly 125% of large caps after 2010.
With these details in mind, let’s take a look at the best NASDAQ stocks to buy under $50.
Image Courtesy of Caesars
Our Methodology
To make our list of the best NASDAQ stocks under $50, we ranked the 100 most valuable stocks on the NASDAQ in terms of market capitalization and picked out the top ten stocks by the number of hedge funds that had bought their shares during Q2 2024.
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. Baker Hughes Company (NASDAQ:BKR)
Number of Hedge Fund Holders In Q2 2024: 52
Share Price: $34.77
Baker Hughes Company (NASDAQ:BKR) is an oil and gas production equipment provider that is one of the major players in the industry. Unlike some other peer firms, more than three quarters of 75% of the firm’s revenue comes from outside the US. As a result, Baker Hughes Company (NASDAQ:BKR) can benefit from a growth in the global economy that raises the demand for oil. As of H1 2024, 63% of the firm’s revenue came from selling goods and services, which means that margin control and sizeable orders are important for Baker Hughes Company (NASDAQ:BKR)’s performance. As a result, a slowdown in the global oil market leaves the stock vulnerable to a downturn. This makes it unsurprising that the shares have gained a modest 2.48% year to date. However, Baker Hughes Company (NASDAQ:BKR)’s dependence on the global oil industry has helped it this year as peers SLB and HAL are down year to date due to a slowdown in the US oil industry. To reduce its dependence on oil, the firm is also diversifying the business by offering products to other industries such as paper manufacturing.
During the Q2 2024 earnings call, Baker Hughes Company (NASDAQ:BKR)’s management shared how the business diversification is performing:
“For the second consecutive quarter, IET outperformed our EBITDA guidance, mostly attributed to excellent conversion of Gas Tech Equipment backlog that drove revenue and margin upside. IET orders were strong at $3.5 billion with non-LNG Gas Tech Equipment accounting for 97% of the total. Year-to-date, we’ve now booked $6.4 billion of IET orders and we remain on track to achieve our guidance range $11.5 billion to $13.5 billion. The versatility and differentiation of the IET portfolio across Industrial and Energy segments remains a significant competitive advantage for Baker Hughes, allowing us to profitably grow with new customers and applications.”
9. WillScot Holdings Corporation (NASDAQ:WSC)
Number of Hedge Fund Holders In Q2 2024: 53
Share Price: $39.10
WillScot Holdings Corporation (NASDAQ:WSC) is a modular workspace and storage solutions provider that caters to the needs of businesses. It is one of the few companies of its kind and has a customer base of more than 80,000 businesses. WillScot Holdings Corporation (NASDAQ:WSC)’s business, which depends on large scale construction and projects means that the firm’s performance is dependent on the state of the economy and large scale project oriented industries such as oil exploration. WillScot Holdings Corporation (NASDAQ:WSC)’s stock is down by 11.7% year to date, and while part of this is based on a slow economy, industrial, and construction activity, it is also due to a failed merger that saw investors price out any potential synergies. Additionally, the firm is the biggest player in the modular industry, which allows it to benefit from economies of scale, brand reputation, and the provision of tertiary services such as air conditioning. This means that WillScot Holdings Corporation (NASDAQ:WSC)’s dominant market position, with more than 50% of the share in a market with only one other major player, can allow it to rapidly grow once the economy recovers.
TimesSquare Capital Management mentioned WillScot Holdings Corporation (NASDAQ:WSC) in its Q2 2024 investor letter. Here is what the fund said:
“Many of our Industrial positions provide necessary business-to-business operational services, highly technical components, automation & efficiency improvements, or essential infrastructure services. WillScot Holdings Corporation (NASDAQ:WSC) provides modular workspace and portable storage solutions. Despite beating first quarter consensus estimates, its shares sold off by -19% due to the uncertainty associated with the FTC’s review of WillScot’s proposed acquisition of McGrath RentCorp. We added to the position on weakness.”
8. Caesars Entertainment, Inc. (NASDAQ:CZR)
Number of Hedge Fund Holders In Q2 2024: 54
Share Price: $41.08
Caesars Entertainment, Inc. (NASDAQ:CZR) is one of the largest casino and hospitality establishment operators in the US. Casino and gaming stocks do not do well when consumer spending is constrained in an economy facing high interest rates. Consequently, Caesars Entertainment, Inc. (NASDAQ:CZR)’s shares are down 14% year to date. This has mostly been influenced by economic sentiment, as while the firm’s shares soared by 8% the day after Caesars Entertainment, Inc. (NASDAQ:CZR) ‘s second quarter earnings, it dropped by 16.90% over the next two days as weak labor market data heightened investor worries of a recession. However, Caesars Entertainment, Inc. (NASDAQ:CZR)’s stock has gained 2% since the Fed announced a 50 basis point rate cut, indicating that there might be more juice in the stock in case the economy remains robust. Caesars Entertainment, Inc. (NASDAQ:CZR) benefits from its brand image in the industry, and the firm’s digital gambling revenue grew by 28% to $276 million in Q2 while adjusted operating earnings grew to $40 million from $11 million.
Baron Funds mentioned Caesars Entertainment, Inc. (NASDAQ:CZR) in its Q2 2024 investor letter. Here is what the fund said:
“In the most recent quarter, we chose to lower the Fund’s large exposure to travel-related real estate companies and exited the Fund’s position in Caesars Entertainment, Inc. (NASDAQ:CZR), the largest casino-entertainment company in the U.S. and one of the world’s most diversified casino-entertainment providers.
We have near-term reservations about a possible moderation in consumer demand for some of Caesars’ properties and believe the move higher in interest rates and a largely quiet transaction market also negatively impact certain highly leveraged companies such as Caesars. We are fans of CEO Tom Reeg and may revisit Caesars for purchase at a later date.”
7. Maplebear Inc. (NASDAQ:CART)
Number of Hedge Fund Holders In Q2 2024: 56
Share Price: $34.96
Maplebear Inc. (NASDAQ:CART) is a specialty eCommece company that focuses on delivering groceries. This somewhat insulates it against the discretionary spending nature of the broader eCommerce industry. It also allows Maplebear Inc. (NASDAQ:CART) to gain a foothold in a lucrative market that traditional giants such as Walmart are eager to gain a foothold in. Subsequently, as it is competing with giants of the corporate world, the key tenets of Maplebear Inc. (NASDAQ:CART)’s hypothesis are its ability to add retailers into its network, margins, and delivery times. It benefits from a strong market position, with data showing that as of 2023, Maplebear Inc. (NASDAQ:CART) had 14 million active users and held a 73% share of the US digital grocery market. To maintain its competitive lead, the firm has to innovate, and one such feature is Caper Carts through which it has partnered with Aldi to allow consumers to skip the checkout line.
Here’s what Maplebear Inc. (NASDAQ:CART)’s management shared during the Q2 2024 earnings call on how its expanding its retailer network:
“The beauty of all of our In-Store technologies is that they connect directly with Storefronts and with each other, so it’s really a seamless experience for customers to buy from retailers online and In-Store. For example, customers can reorder online what they bought with their Caper Carts in one tap, or bring their online shopping list to the screen of Caper Carts to avoid forgetting ingredients in the store.
This is increasingly important to retailers who are moving away from complex and fragmented point solutions and towards technology partners that can offer a simple and seamless customer experience across all of their channels. Scaling our marketplace and enterprise offerings both online and In-Store is also critical to our strategy because it’s laying the foundation for a massive one-stop-shop, omni-channel retail media network. While it may seem like new retail media networks are popping up left and right, right now, we know that brands have limited time and resources, and they will ultimately want to work with platforms that have scales across all channels. And this is exactly where Instacart ads will shine because of our leading scale, performance, measurement, data, and product capabilities.”
6. DraftKings Inc. (NASDAQ:DKNG)
Number of Hedge Fund Holders In Q2 2024: 56
Share Price: $40.94
DraftKings Inc. (NASDAQ:DKNG) is the second biggest online sports betting company in America. Estimates show that the firm commands 32% of the market, which when combined with FanDuel’s 35% means that the two control two thirds of the market. This provides DraftKings Inc. (NASDAQ:DKNG) with key advantages, as the firm has benefited from lax regulatory environments all over the US that allowed it to set up operations. These same laws now constrain the entry of new companies in the industry, and the duopoly like nature of its industry means that DraftKings Inc. (NASDAQ:DKNG) has to primarily compete with FanDuel when it comes to cost control, player addition, revenue per player, and other metrics. Additionally, the firm has also been growing its operations through acquisition, with one such deal being its purchase of JackPocket. The deal expanded DraftKings Inc. (NASDAQ:DKNG)’s presence in the broader digital gambling industry by bringing a digital lottery company under its wing. The shares have gained 7.5% since the Fed’s interest rate cuts and could add to these if investors gain additional confidence in the economy.
Fred Alger Management mentioned DraftKings Inc. (NASDAQ:DKNG) in its Q2 2024 investor letter. Here is what the fund said:
“DraftKings Inc. (NASDAQ:DKNG) is a digital sports entertainment and gaming firm designed to ignite the passion of sports enthusiasts through a diverse offering that spans daily fantasy, regulated gaming, and digital media. We believe the company’s expertise in product development and customer acquisition, which established it as the market leader in daily fantasy sports (DFS), positions DraftKings to be a key driver in advancing the U.S. sports betting market’s growth. The company reported strong fiscal first quarter results, with revenues beating analyst estimates due to broad-based momentum in customer engagement and acquisition. However, on May 28th, the Illinois Senate passed a new state budget that includes a tiered progressive tax on sportsbook operators, effective July 1, 2024. This new tax ranges from 20% to 40% on gross revenues, a significant increase from the current 15% tax rate. Despite management’s belief that it can mitigate the tax impact by reducing promotions in Illinois, this development negatively affected the company’s share price.”
5. JD.com, Inc. (NASDAQ:JD)
Number of Hedge Fund Holders In Q2 2024: 59
Share Price: $37.99
JD.com, Inc. (NASDAQ:JD) is a Chinese eCommerce company with one of the most unique business models in the industry. It operates through a part first model by acquiring inventory at the wholesale level and then managing it through its logistics service. This offers JD.com, Inc. (NASDAQ:JD) the advantage of stable delivery times and customer satisfaction, as its customers do not have to rely on merchants to ship the inventory and they deal directly with JD.com, Inc. (NASDAQ:JD) for the returns process. As an eCommerce retailer, the keys to the firm’s hypothesis are its margins, gross merchandise volume, and merchant network. Keeping in line with a weak Chinese retail environment and economy, JD.com, Inc. (NASDAQ:JD) has been shifting its model to target low price products and by bringing small businesses and merchants to its platform. Execution of this strategy should prove important for the stock’s future performance, even as a forward P/E ratio of 7.19 indicates a significant undervaluation based on geopolitical tensions. JD.com, Inc. (NASDAQ:JD)’s dependence on the Chinese economy was clear in September as the shares surged by 14% after China announced another stimulus package to aid its flailing economy. Further additional good news on the Chinese economic front could lead to more returns.
Ariel Investments mentioned JD.com, Inc. (NASDAQ:JD) in its Q1 2024 investor letter. Here is what the fund said:
“We initiated a position in China-based technology-driven E- commerce company, JD.com, Inc. The brand has long been known across the region as a superior online shopping channel due to its unique first-party model and unparalleled fulfillment service underpinned by JD Logistics. Yet, a challenging macro environment drove shares lower as shoppers began seeking bargains. In response, the company made significant investments in elevating its third-party merchant platform to enhance its variety of product offerings and price competitiveness for consumers. We believe these actions will yield an improved product mix, stronger top-line growth and margin expansion on a go-forward basis.”
4. Comcast Corporation (NASDAQ:CMCSA)
Number of Hedge Fund Holders In Q2 2024: 61
Share Price: $41.02
Comcast Corporation (NASDAQ:CMCSA) is one of the biggest internet and television broadcasters in the US. This has allowed the firm to amass significant financial resources, as evidenced by its cash and equivalents of $6 billion. Comcast Corporation (NASDAQ:CMCSA)’s two key industries are television broadcast and internet coverage. While it serves 32 million customers, retaining them will be key to the firm’s hypothesis moving forward. Comcast Corporation (NASDAQ:CMCSA)’s broadband industry is being disrupted by satellite internet providers such as SpaceX’s Starlink and fixed wireless providers which could make it difficult for the firm to hold on to its customers. Any indications that it is losing customers could translate into share price headwinds. Comcast Corporation (NASDAQ:CMCSA) late entrant in the streaming market through Peacock. This has meant that the firm continues to lag behind industry leaders at a time when home movie streaming is gaining popularity over feature films. However, the firm can leverage its size to sign mega deals and attract users to streaming.
During the Q2 2024 earnings call, Comcast Corporation (NASDAQ:CMCSA)’s management shared its plans for one such mega deal:
“Our expectation is that soon an 11-year rights deal between ourselves and the NBA will be announced. We don’t believe that the resolution of matching rights will affect the package that we expect to be awarded. This package, which begins with the 2025-2026 season includes: 100 NBA games each regular season across NBC and Peacock, which is more than any other media partner and more regular season games than each existing partner has under the current rights deal; for playoffs, we will have first and second round games each year, exclusively on our national platforms and six NBA conference final series over the course of the term of the deal, which is more playoff games on average each year, than any other media partner; and exclusively for Peacock will be approximately 50 national regular season and post-season games, including National Monday Night games and doubleheaders.
Additional elements of the NBA package include the annual NBA All-Star Game and All-Star Saturday Night each season, the season opening NBA tip-off doubleheader each season, a special doubleheader on the MLK holiday, and Select NBA games in every NBA All-Star game on Telemundo. Beyond the NBA itself, we’re excited that our package includes WNBA, where starting in the spring of 2026, we’ll have more than 50 WNBA regular season and first round playoff games each season across Peacock, NBC and USA, and we’ll also have games in seven WNBA Conference semifinals and three WNBA Final series; for USA Basketball, we’ll have the rights to USA men’s and women’s games leading up to the Olympics and FIBA World Cup; Sky Sports will air all of NBCUniversal’s NBA and WNBA games in its markets; and finally, Xfinity will be the NBA and WNBA’s marketing partner in the video category.”
3. Roivant Sciences Ltd. (NASDAQ:ROIV)
Number of Hedge Fund Holders In Q2 2024: 62
Share Price: $11.57
Roivant Sciences Ltd. (NASDAQ:ROIV) is a biotechnology company that works with patents and develops medicines for commercial sales. This makes treatments under development and potential litigation win the two keys to its hypothesis, and provides it with a wide portfolio courtesy of its ownership stakes in 11 companies. On the former front, Roivant Sciences Ltd. (NASDAQ:ROIV) currently has three treatments under development through its Immunovant subsidiary. These are IMVT-1401 which seeks to help patients with immune system diseases, mosliciguat for heart problems stemming from lung disease, and a treatment for psoriasis called brepocitinib. The firm also entered into a $1.2 billion deal for its Dermavant business recently which offered it $175 million in upfront payments which will help Roivant Sciences Ltd. (NASDAQ:ROIV) manage operating and research expenses as it brings its drugs to the market after trials. The company could see additional catalysts if its drugs like IMVT-1402 are able to help patients with other diseases such as anemia and polyneuropathy. The performance of its treatments in trials and associated data could influence share price movements. Another catalyst could be a patent win against Moderna and Pfizer for raw materials used to make COVID vaccines.
Roivant Sciences Ltd. (NASDAQ:ROIV)’s management shared details for two of its under development drugs during the Q1 2025 earnings call:
“We have continued clinical development beyond that in our pipeline including in brepocitinib where we’ll be beginning our Phase 3 program in NIU shortly where we have data coming in namilumab and sarcoidosis and so on. We’re very much looking forward to. We’ll talk a little bit about VTAMA today, but the story for VTAMA for this year is really the expansion of the label with AD and some acceleration of psoriasis, certainly volumes and revenues are over time. And then we continue to be hard at work expanding our pipeline looking at mid-late-stage programs. I know there’s a lot of focus on that activity. We will be unveiling our much discussed so far undisclosed program just next month, so hold on for a few more weeks there. And then, continuing to work on prioritizing capital allocation we thinking aggressively around the use of capital to continue to buy back shares and so on.
We are super proud on slide 6 of the pipeline as it currently stands. And one of the things that — I’m sure sometimes you get all these questions about IMVT, but every time I look at our pipeline, we still have one of the best I&I pipelines without IMVT, so excited about the breadth of opportunities there, in particular excited about the next, call it, 18 months both in the [indiscernible], we’ll talk a lot more about today and then brepocitinib where we have pivotal data coming shortly. So, the main updates for the quarter starting on slide 8. One is on brepocitinib, which is that we’ve now completed enrollment in our Phase 3 study in dermatomyositis. It’s 241 subjects across 90 sites. It is the largest interventional DM study ever conducted.
And we can now say with confidence we expect top line data in the second half of next year that study completed enrollment a few weeks back.”
2. CSX Corporation (NASDAQ:CSX)
Number of Hedge Fund Holders In Q2 2024: 65
Share Price: $33.90
CSX Corporation (NASDAQ:CSX) is one of the biggest railroad transportation providers in America with a 20,000 route mile network and an operation spanning across 26 states. This provides the firm with key market and cost advantages as the firm is able to command significant volumes across its network. CSX Corporation (NASDAQ:CSX)’s role as an industrial goods transporter also means that the firm does well when industrial output is high. As a result, it’s unsurprising that CSX Corporation (NASDAQ:CSX)’s shares are down 2% year to date, especially since it’s dealing with railroad strikes. While economic activity has a part to play in this performance, other factors such as declining truck rates and union deals have also made their mark. As it faces stiff competition from truckers that eats into margins, CSX Corporation (NASDAQ:CSX) has also agreed to a 3.5% annual wage increase for employees for the next five years. On a positive note, the stock gained 2.5% after the Fed’s rate cut and CSX Corporation (NASDAQ:CSX) is also working with its industrial partners for infrastructure projects that could increase volume over the long term.
ClearBridge Investments mentioned CSX Corporation (NASDAQ:CSX) in its Q1 2024 investor letter. Here is what the firm said:
“CSX runs the second-largest listed U.S.-centric railroad in terms of market cap, owning over 20,000 miles of track and operating across 23 states mostly on the East Coast. CSX was an outperformer as quarterly results demonstrated best-in-class adjusted operating margins combined with continued volume recovery, which has surpassed expectations.”
1. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders In Q2 2024: 75
Share Price: $23.92
Intel Corporation (NASDAQ:INTC) is the beleaguered American chip manufacturing giant that has been one of the worst performing stocks in 2024. The firm has been caught in the double bind of being unable to grow sales in a slow personal computing market underpinned by inflation yet having to invest in growth simultaneously to catch up with the world’s biggest and most advanced contract chip manufacturer TSMC. Rumors on the street suggest that Intel Corporation (NASDAQ:INTC) is being approached for takeovers, with the stock soaring by 3% in September after a WSJ report indicated Qualcomm’s interest. Key to the firm’s stock performance is its ability to remain profitable, establish a contract manufacturing division, and deliver on time with its 18A chip manufacturing process. Intel Corporation (NASDAQ:INTC)’s size also means that it is an important American company that could see additional government spending to help the firm until it recovers. However, the absence of short term catalysts means that the stock can struggle for a while before any potential gains.
ClearBridge Investments mentioned Intel Corporation (NASDAQ:INTC) in its Q2 2024 investor letter. Here is what the fund said:
“Within IT, Intel was the main detractor. Intel’s shares declined as higher profitability targets were pushed further out in the decade and skepticism lingers on the company’s ability to reclaim tech leadership. Our current position is modest in the context of the overall portfolio”
INTC tops our list of best NASDAQ stocks under $50. While we acknowledge the potential of INTC 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 INTC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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