10 Most Profitable NASDAQ Stocks To Invest In

6. Baker Hughes Co. (NASDAQ:BKR)

TTM Net Income: $1.99 billion

5-Year Net Income CAGR: 31.11%

Number of Hedge Fund Holders: 41  

Baker Hughes Co. (NASDAQ:BKR) provides products and services for oil well drilling, formation evaluation, completion, production, reservoir consulting, and tubular running services. It plays a crucial role in helping energy companies explore, develop, and produce oil and gas resources.

It benefits from global economic growth that increases oil demand. 63% of its revenue comes from goods and services, making margin control and sizeable orders crucial. To reduce oil dependence, the company is diversifying into other industries like paper manufacturing.

The company has invested in GreenFire Energy, acquiring Advanced Geothermal Systems, which uses closed-loop technology to enhance geothermal energy extraction from wells. Earlier in March, it announced a collaboration with Earths Energy to explore, develop, and commercialize geothermal projects in Australia using its technology capabilities. In Q2, Wabash Valley Resources selected this company as their preferred equipment and service supplier for their ammonia and carbon sequestration plant in Indiana.

In Q2 2024, company revenue reached $7.14 billion, up 13.05% year-over-year, primarily driven by increased volume in both IET and OFSE segments. IET had orders go up 97%, and revenue go up 28%. CTS orders increased by 24%, and new energy orders grew by 31%. OFSC also saw strong growth, with orders up 40%, and revenue up 6%.

Unlike its peers, over 75% of Baker Hughes Co.’s (NASDAQ:BKR) revenue is ex-US, diversifying its customer base and protecting against US-specific downturns. It is capitalizing on the growing geothermal market. Its investment in GreenFire Energy and AGS technology allows it to repurpose existing infrastructure and unlock previously uneconomical projects. This innovative approach, coupled with global reach and industry expertise, positions it for significant growth in the clean energy transition.

ClearBridge Select Strategy made the following comment about Baker Hughes Company (NASDAQ:BKR) in its Q3 2023 investor letter:

“Performance was boosted in the quarter by the Strategy’s more economically-sensitive holdings among steady compounders and evolving opportunities. Oilfield equipment and services provider Baker Hughes Company (NASDAQ:BKR), meanwhile, benefited from a $20 rise in crude oil prices as well as disciplined execution.”