In this article, we will take a look at the 10 NASDAQ stocks with biggest upside. To see more such companies, go directly to 5 NASDAQ Stocks with Biggest Upside.
The NASDAQ has surprised investors this year, thanks to the AI-driven rally in tech stocks that is making some analysts uneasy amid valuation concerns. As the US economy is still not out of the woods and there are warnings about recession, some analysts believe tech stock valuations have gone too far. For example, despite the outperformance of NVIDIA Corp (NASDAQ:NVDA) in its Q2 results and the company’s dominance in the generative AI-based chips domain, some analysts believe the stock is overvalued. Recently, Federated Hermes Chief Equity Strategist Phil Orlando, while talking to Yahoo Finance, highlighted the concentration of value and stock market gains in 2023 He said that eight major tech stocks are up about 65% in the first seven months of the year.
“How are the other 492 companies doing in the S&P 500? There up about 7%,” Orlando said.
The analyst said that tech stocks are up for a large correction this year. He thinks NVIDIA Corp (NASDAQ:NVDA) is the “poster child” of this “imbalance.”
“From the bottom of the market last October to where NVIDIA Corp (NASDAQ:NVDA)’s peaked out over the course of the last month or so, the stock has gone up by a multiple of five times. From a valuation perspective, they’re trading at something like 40 times forward revenues and 130 times forward revenues and 130 times forward earnings. That, in our view, is excessive, and it’s reminiscent of what the tech stocks did in that fourth quarter of 1999 as we were going into the Y2K calendar changeover.”
Orlando said that tech companies like Apple and NVIDIA Corp (NASDAQ:NVDA) are “phenomenal” but amid the expected correction and pullback he’d rather invest in these companies later at cheaper prices. For now, Orlando thinks the market correction would open up new opportunities in value and small-cap stocks.
Despite warnings of a market correction, there are some stocks which still have huge upside potential according to experts. In this article we decided to talk about some of these stocks.
Photo by Pascal Bernardon on Unsplash
Our Methodology
For this article we conducted a survey of mainstream financial media and checked over 10 credible financial websites to see which NASDAQ stocks have potential to grow in the coming weeks and months according to these websites. We picked 10 stocks which frequently appeared in our survey. These stocks have upside potential according to notable financial websites. We have also mentioned the number of hedge fund investors having stakes in each of these companies. Some notable names in the list include Amazon.com, Inc. (NASDAQ:AMZN), Meta Platforms, Inc. (NASDAQ:META) and Apple Inc. (NASDAQ:AAPL).
NASDAQ Stocks with Biggest Upside
10. Upstart Holdings, Inc. (NASDAQ:UPST)
Number of Hedge Fund Holders: 15
Upstart Holdings, Inc. (NASDAQ:UPST) shares have gained about 137% year to date but the financial media outlets we surveyed believe the stock is expected to retain this momentum. In August, however, Upstart Holdings, Inc. (NASDAQ:UPST) fell after the company gave soft Q3 guidance.
In the second quarter Upstart Holdings, Inc. (NASDAQ:UPST)’s adjusted EPS came in at $0.06 beating estimates by $0.13. Revenue in the period fell 40.5% year over year but still beat estimates by $0.45 million.
Like NVIDIA Corp (NASDAQ:NVDA), Amazon.com, Inc. (NASDAQ:AMZN), Meta Platforms, Inc. (NASDAQ:META) and Apple Inc. (NASDAQ:AAPL), UPST is one of the stocks with upside potential.
9. Constellation Energy Corporation (NASDAQ:CEG)
Number of Hedge Fund Holders: 46
Constellation Energy Corporation (NASDAQ:CEG) shares have gained about 32% year to date through September 9. Constellation Energy Corporation (NASDAQ:CEG) in August posted strong Q2 results and upped its guidance for full-year EBITDA.
As of the end of the second quarter of 2023, 46 hedge funds tracked by Insider Monkey had stakes in Constellation Energy Corporation (NASDAQ:CEG). The biggest hedge fund stakeholder of Constellation Energy Corporation (NASDAQ:CEG) was William B. Gray’s Orbis Investment Management which owns a $495 million stake in the company.
Constellation Energy Corporation (NASDAQ:CEG)’s management said the following during its latest earnings call:
“We definitely see some of this margin also now going into 2025 as we sign up these customers, and the activity we’re seeing in the market. So, we expect that to be there over the next few years on the gross margin optimization also. And then, the macro trend of sustainability products is something that you add to that as it scales in the future. We’ve talked about our core product quite a bit with you all. The amount of volumes, we’re seeing there and the margins have been continuing to grow. And now we have the possibility with hourly CFE, carbon-free energy matching to look at the next wave of sustainability products to get our customers signed up for longer terms and for decent margins.
So, we’re feeling good about the sustainability environment, and it really does start with the balance sheet. Our competitiveness is there. I think others in this interest rate environment with the collateral costs and the borrowing costs hit, quite do what we can do. So, I think it’s – we’re feeling good about it.”
To read the full earnings call transcript click here.
8. Airbnb, Inc. (NASDAQ:ABNB)
Number of Hedge Fund Holders: 47
Airbnb, Inc. (NASDAQ:ABNB) is considered as a top tech stock with upside potential and many analysts also believe the stock is undervalued. Airbnb, Inc. (NASDAQ:ABNB) is expected to announce AI features integrated with its platform later this year. Airbnb, Inc. (NASDAQ:ABNB) recently jumped after the stock was added to the S&P 500
During the second quarter Airbnb, Inc. (NASDAQ:ABNB)’s GAAP EPS came in at $0.98, beating estimates by $0.20. Revenue in the period jumped 18.1% year over year to $2.48 billion, surpassing estimates by $60 million.
During Q2 earnings call Airbnb, Inc. (NASDAQ:ABNB) CEO talked about how AI and generative AI applications could be of use for the company:
“First of all, when you call a hotel, they’re usually one property and they’re aware of every room. We’re nearly every country in the world. Often guest host will call us, and they will even potentially speak a different language than the person on the other side, the host, the guest and host. There are nearly 70 different policies that you could be adjudicating. Many of these are 100 pages long. So imagine a customer service agent trying to quickly deal with an issue with somebody from two people from two different countries in a neighborhood that the agent may never even have heard of.
What AI can do, and we’re using a pilot to GPT-4, is AI can read all their policies. No human can ever quickly read all those policies. It can read the case history of both guests and hosts. It could summarize the case issue, and it can even recommend what the ruling should be based on our policies, and it can then write a macro that the customer service agent can basically adopt and amend. If we get all this right, it’s going to do things. And in your term, it’s going to actually make customer service a lot more effective, because agents will actually be able to handle a lot more tickets than many tickets. You’ll never even have to talk to an agent, but also the service to be more reliable, which will unlock more growth. Now, this of course leads to the bigger question.
What can we do with AI? And I just wanted to offer a minute or two of thoughts, and I’ve shared this …[Read the detailed transcript of the call here.]
7. QUALCOMM, Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 73
QUALCOMM, Incorporated (NASDAQ:QCOM) is under pressure after the company gave weak Q4 guidance. QUALCOMM, Incorporated (NASDAQ:QCOM) is also taking a hit amid bad news from China and an overall lackluster consumer demand. During the fiscal third quarter QUALCOMM, Incorporated (NASDAQ:QCOM)’s adjusted EPS came in at $1.87 beating estimates by $0.06. Revenue in the period fell 22.7% year over year to $8.44 billion, missing estimates by $70 million.
As of the end of the second quarter of 2023, 73 hedge funds tracked by Insider Monkey had stakes in QUALCOMM, Incorporated (NASDAQ:QCOM). The biggest stakeholder of QUALCOMM, Incorporated (NASDAQ:QCOM) was Israel Englander’s Millennium Management which owns a $270.2 million stake in the company.
6. Booking Holdings Inc. (NASDAQ:BKNG)
Number of Hedge Fund Holders: 78
Booking Holdings Inc. (NASDAQ:BKNG) is benefitting from the rise in travel demand across the globe. In the second quarter, Booking Holdings Inc. (NASDAQ:BKNG)’s adjusted EPS came in at $37.62 beating estimates by $8.46. Revenue in the quarter came in at $5.5 billion, surpassing estimates by $330 million. Room nights booked increased 9% from the prior-year quarter.
As of the end of the second quarter of 2023, 78 hedge funds tracked by Insider Monkey had stakes in Booking Holdings Inc. (NASDAQ:BKNG).
Like BNKG, NVIDIA Corp (NASDAQ:NVDA), Amazon.com, Inc. (NASDAQ:AMZN), Meta Platforms, Inc. (NASDAQ:META) and Apple Inc. (NASDAQ:AAPL) are some of the stocks with upside potential according to analysts.
L1 Capital International Fund made the following comment about Booking Holdings Inc. (NASDAQ:BKNG) in its first quarter 2023 investor letter:
“Booking Holdings Inc. (NASDAQ:BKNG) was the largest positive contributor to the March 2023 quarterly performance. We meaningfully added to our investment in Booking in the middle of 2022 when the market was overly focused on disruptions to travel in Europe caused by airport understaffing and other COVID-19 induced inefficiencies, as well as concerns that an economic downturn would materially reduce discretionary travel. Since then, the travel environment has continued to normalise, with China being the last major market to open travel borders post COVID-19. People the world over have demonstrated their ongoing desire to travel, an industry that has historically grown significantly faster than GDP growth. Management has continued to execute a well-planned strategy to increase connections with customers booking accommodation, including offering flights, on ground transport, activities and payment options. After increasing over 20% in the December 2022 quarter, Booking’s share price increased a further 30%+ during the March 2023 quarter. Booking is now trading within our assessed view of fair value. We retain confidence that management will continue to deliver returns to shareholders and Booking remains one of the Fund’s largest holdings.”
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Disclosure: None. 10 NASDAQ Stocks with Biggest Upside is originally published on Insider Monkey.
