In this article, we discuss the 10 NASDAQ stocks with the biggest upside. To skip our detailed analysis, go directly to the 5 NASDAQ Stocks with Biggest Upside.
The Nasdaq Composite was the worst performer among the major market indices in 2022 and made a stellar comeback in 2023. The index was down 33% at the end of 2022 and recovered from its abysmal performance with a 43% gain in 2023. To put things in perspective, the Nasdaq Composite index hit its previous record in November 2021 with a little over 16,000 points, and it was still a thousand points behind it by the end of 2023, even after the outstanding performance during the year. However, the index has hit new highs and is at 16,275 at March 1 market close. The Nasdaq-100, which includes the 100 largest and most actively traded non-financial companies in the world, recorded its fourth-best performance since 1986, with a 53.81% gain in 2023.
Nasdaq’s performance is attributed to the fact that it is mostly concentrated in tech stocks, which were the best performers of the year in 2023. The Magnificent 7 stocks remained in the limelight as several of the top performers of the index were a part of the group, which include NVIDIA Corporation (NASDAQ:NVDA) and Meta Platforms, Inc. (NASDAQ:META), and they gained 239% and 194% in 2023, respectively. However, some other stocks made significant strides through the year as well. Some of them are Advanced Micro Devices, Inc. (NASDAQ:AMD), Palo Alto Networks, Inc. (NASDAQ:PANW), and Super Micro Computer, Inc. (NASDAQ:SMCI). Advanced Micro Devices, Inc. (NASDAQ:AMD) gained nearly 128%, and Palo Alto Networks, Inc. (NASDAQ:PANW) was 110% higher by the end of 2023. Super Micro Computer, Inc. (NASDAQ:SMCI) performed even more spectacularly in 2023 and is still on a remarkable upward trajectory in the current year. As of March 18, the stock has gained more than 900% over the past 12 months.
Although 5 of the magnificent 7 stocks are still performing well and their price charts are still in green on a year-to-date basis, as of March 18, Apple Inc. (NASDAQ:AAPL) and Tesla, Inc. (NASDAQ:TSLA) have declined significantly. Apple is down 4.61%, and Tesla has also fallen out of favor among many analysts and is down 32% year-to-date. However, Cathie Wood of Ark Invest still sees long-term growth for Tesla, Inc.’s (NASDAQ:TSLA) stock due to its autonomous driving software. Last year, Wood said in an interview on CNBC that she believes that the company’s stock price will hit the $2000 mark by 2027. In 2024, the investor is still bullish on the stock. Ark Invest bought $141 million worth of Tesla, Inc.’s (NASDAQ:TSLA) stock in January, as reported by Bloomberg on January 29. The firm also bought over $35 million worth of company shares on March 14, as reported by Business Insider on the same day.
Is There a Stop to the AI Rally?
Investors and analysts keep mixed reviews about the rising AI trend. While some believe that the AI surge could be a bubble and that tech stocks are now overvalued, others hold the opinion that AI is a revolutionary trend that will dominate the market for years to come. Looking at recent earnings of the tech stocks, the latter scenario is more likely.
The industry leader, NVIDIA Corporation (NASDAQ:NVDA), reported its Q4 earnings on February 21. It reported non-GAAP earnings per share (EPS) of $5.16, which was up 28% sequentially, and was 486% higher than last year. Furthermore, its revenue increased by 265% year-over-year (YoY) to $22.1 billion. The company’s gross margin also increased by 10.6%, year over year, to 76.7% in the quarter. On March 18, Truist and HSBC raised NVIDIA’s price target by $266 and $170, respectively. Truist has a price target of $1,177 for the stock, while HSBC’s Frank Lee raised NVIDIA Corporation’s (NASDAQ:NVDA) price target to $1050. The stock is currently trading at around $885, as of March 18.
After NVIDIA Corporation’s (NASDAQ:NVDA) first-rate earnings report, Dell Technologies (NYSE:DELL) also showed strength in its earnings in the fourth quarter due to a high demand for its artificial intelligence servers. The company reported an EPS of $2.20 and a revenue of $22.32 billion, which outperformed the market estimates by $0.48 and $150 million, respectively. The stock gained 31.5% in a day on March 1 and is up nearly 13% month-to-date as of March 18. Dell Technologies’ (NYSE:DELL) also increased its quarterly dividend by 20%. The company’s earnings revived investor belief in AI, and most of the industry-related stocks moved higher during the day. At Dell Technologies’ (NYSE:DELL) Q4 2024 earnings call, COO and Vice Chairman of the company, Jeffrey Clark, highlighted the demand growth for AI-optimized servers. He said:
“AI-optimized server orders increased by nearly 40% sequentially. We shipped $800 million of AI-optimized servers, and our backlog nearly doubled sequentially, exiting the fiscal year at $2.9 billion. Demand continues to outpace GPU supply, though we are seeing H100 lead times improving. We are also seeing strong interest in orders for AI-optimized servers equipped with the next generation of AI GPUs, including the H200 and the MI300X. Most customers are still in the early stages of their AI journey, and they are very interested in what we are doing at Dell. We are helping them get started and work through their use cases, data preparation, training, and infrastructure requirements.”
Now let us continue to our list of NASDAQ stocks with the biggest upside potential, which includes Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE), Viasat, Inc. (NASDAQ:VSAT), and Sunrun Inc. (NASDAQ:RUN). You can also check out 11 Oversold NASDAQ Stocks To Buy Right Now and 15 Best NASDAQ Dividend Stocks To Buy.
Photo by Pascal Bernardon on Unsplash
Our Methodology
For this article, we identified 20 stocks listed on NASDAQ with the biggest upside potential through financial media websites including CNBC, Motley Fool, Kiplinger, and Business Insider. Next, we checked each stock’s analyst ratings and price targets on TipRanks. We then chose the 10 stocks with the highest average analyst price target upside at the time of writing on March 18 and listed the stocks in ascending order.
We also mentioned the hedge fund sentiment around each stock. The hedge fund data was taken from Insider Monkey’s database of 933 elite hedge funds as of Q4, 2023. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
10 NASDAQ Stocks with Biggest Upside
10. Baker Hughes Company (NASDAQ:BKR)
Average Analyst Price Target Upside: 22.99%
Number of Hedge Fund Holders: 47
Baker Hughes Company (NASDAQ:BKR) is a Texas-based company that offers energy and industrial solutions. According to TipRanks, the stock has a consensus rating of Strong Buy as per the 14 Wall Street analysts that covered it over the past three months. The average price target of $39.85 implies an upside of 22.99% from the current levels at the time of writing on March 18.
On February 21, Baker Hughes Company (NASDAQ:BKR) announced that it won a significant and multi-year award for the provision of integrated well construction services for rigs in the Buzios pre-salt field offshore Brazil. The work on the three rigs is expected to begin in the first half of 2025.
Baker Hughes Company (NASDAQ:BKR) was part of 47 hedge funds’ portfolios in the fourth quarter of 2023 with a total stake value of $911.825 million. AQR Capital Management is the most prominent shareholder in the company and has a position worth nearly $137.851 million, as of Q4, 2023.
Baker Hughes Company (NASDAQ:BKR) is one of the top NASDAQ stocks with the biggest upside, along with Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE), Viasat, Inc. (NASDAQ:VSAT), and Sunrun Inc. (NASDAQ:RUN).
ClearBridge Investments 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.”
9. Insulet Corporation (NASDAQ:PODD)
Average Analyst Price Target Upside: 44.79%
Number of Hedge Fund Holders: 50
Insulet Corporation (NASDAQ:PODD) is engaged in developing, manufacturing, and distributing insulin management systems for diabetic patients. In the fourth quarter of 2023, 50 hedge funds had stakes in Insulet Corporation (NASDAQ:PODD) with total positions worth $1.197 billion. This is compared to 44 funds with positions worth $938.370 million in the preceding quarter. As of December 31, 2023, Citadel Investment Group is the largest shareholder in the company with a stake worth $288.885 million.
On February 7, Insulet Corporation (NASDAQ:PODD) announced that its Omnipod 5 automated insulin delivery system with Abbott Laboratories’ (NYSE:ABT) FreeStyle Libre 2 Plus sensor received CE Mark approval.
In the past three months, 12 Wall Street analysts have covered Insulet Corporation (NASDAQ:PODD), and 9 maintain a Buy rating on the stock. At the time of writing on March 18, the average price target of $238.33 has an upside of 44.79% from present levels.
ClearBridge Investments mentioned Insulet Corporation (NASDAQ:PODD) in its third quarter 2023 investor letter. Here is what it said:
“Results were primarily impacted by weakness among two health care holdings, Insulet Corporation (NASDAQ:PODD) and Surgery Partners. Positive clinical studies for GLP-1 therapeutics showed substantial health benefits to diabetic and obese patients, boosting stock prices of pharmaceutical companies tied to the manufacturing of these drugs. The potential for improved patient outcomes raised the risk of lower utilization for Insulet, a maker of insulin patch pumps, and Surgery Partners, whose outpatient surgery centers conduct weight loss and many other types of outpatient procedures. Though the GLP-1 threat is weighing on the valuation multiple of Insulet, any negative effects would likely not meaningfully affect the business for many years, especially given how large and underpenetrated the Type 2 diabetes market is for the company currently. Additionally, this could require significant improvements in cost, availability, and adherence for GLP-1s. Furthermore, we are encouraged that the majority of Insulet’s business today is still from Type 1 diabetes, where fundamentals remain strong and the company is gaining share.”
8. First Solar, Inc. (NASDAQ:FSLR)
Average Analyst Price Target Upside: 50.15%
Number of Hedge Fund Holders: 47
First Solar, Inc. (NASDAQ:FSLR) is a Texas-based company that provides solar photovoltaic (PV) systems. First Solar, Inc. (NASDAQ:FSLR) takes the eighth spot on our list of NASDAQ stocks with the biggest upside. Over the past three months, 20 Wall Street analysts have given their recommendations on First Solar, Inc. (NASDAQ:FSLR), with 16 recommending to Buy the stock. As of March 18, the stock’s average price target of $220.72 implies an upside of 50.15% to its current price.
According to Insider Monkey’s database which tracks 933 elite hedge funds, 47 funds had investments in First Solar, Inc.’s (NASDAQ:FSLR) stock in the fourth quarter of 2023 worth $1.106 billion. With 1.79 million shares worth $308.736 million, Robert Pohly’s Samlyn Capital is the top investor in the company, as of Q4 2023.
On February 27, First Solar, Inc. (NASDAQ:FSLR) announced its Q4 earnings result with a GAAP EPS of $3.25, which topped the estimates by $0.13. The revenue jumped 16.0% year-over-year to $1.16 billion.
7. Shoals Technologies Group, Inc. (NASDAQ:SHLS)
Average Analyst Price Target Upside: 58.89%
Number of Hedge Fund Holders: 31
Shoals Technologies Group, Inc. (NASDAQ:SHLS) is a Tennessee-based company that offers electrical balance of system solutions. The stock has been covered by 15 Wall Street analysts over the past three months, with 12 keeping a Buy rating on the stock. The average price target of $18.86 implies an upside of 58.89% from the current levels on March 18.
On February 21, it was reported that Shoals Technologies Group, Inc. (NASDAQ:SHLS) will expand its existing Tennessee operations over the next five years and will spend $80 million for this endeavor.
According to Insider Monkey’s database, 31 hedge funds had investments in Shoals Technologies Group, Inc. (NASDAQ:SHLS) in Q4 of 2023 with positions worth $464.778 million. This compared to 33 funds in the previous quarter, with positions worth $349.254 million. Encompass Capital Advisors is the top shareholder in the company with a position worth $105.713 million, as of the fourth quarter of 2023.
On February 28, Shoals Technologies Group, Inc. (NASDAQ:SHLS) announced its Q4 earnings result with a non-GAAP EPS of $0.12 and a revenue of $130.4 million, which grew by 37.8% YoY.
6. Warner Bros. Discovery, Inc. (NASDAQ:WBD)
Average Analyst Price Target Upside: 61.26%
Number of Hedge Fund Holders: 56
Warner Bros. Discovery, Inc. (NASDAQ:WBD) is a New York-based media and entertainment company. The stock was held by 56 hedge funds in the fourth quarter of 2023. The total stakes of the funds amounted to $1.122 billion. As of December 31, 2023, Harris Associates is the most dominant shareholder in the company with a position worth $904.761 million.
Of the 17 Wall Street analysts that have covered Warner Bros. Discovery, Inc. (NASDAQ:WBD) over the past three months, 9 maintain a Buy rating on the stock. The average price target of $13.61 implies an upside of 61.26% from current levels, as of March 18.
On February 26, Barrington analyst James Goss lowered the price target on Warner Bros. Discovery, Inc.’s (NASDAQ:WBD) stock to $16 from $18 and kept an Outperform rating on the shares.
Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE), Viasat, Inc. (NASDAQ:VSAT), and Sunrun Inc. (NASDAQ:RUN) are some of the NASDAQ stocks with the biggest upside, in addition to Warner Bros. Discovery, Inc. (NASDAQ:WBD).
Longleaf Partners stated the following regarding Warner Bros. Discovery, Inc. (NASDAQ:WBD) in its fourth quarter 2023 investor letter:
“The rules have improved how we analyze existing holdings and influenced the price at which we will buy a new holding and/or trim or add to an existing one. This has resulted in a higher level of resizing positions in the portfolio and exiting some long-term holdings this year. A good example in the portfolio today is Warner Bros. Discovery, Inc. (NASDAQ:WBD), a company that we bought too early but that remains a holding in the portfolio. Our average price for the initial WBD investment in 2021 was $26.48, or a P/V ratio in the mid-60s%. However, P/EV on the initial report was 79%. Under the new rules, we would not pay that price for the company today. We most likely would have waited for a mid-60s% P/EV, which would have equated to a $mid-teens entry price. In this case, we would have missed a too-large initial downturn in the stock price. The overweight rule dictated that we trimmed the position after the price ran up in the first half of 2023, which benefitted overall performance as the stock price subsequently fell again. However, even with the new rule lens, we remain confident in our case for the business and management’s ability to deliver going forward.”
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Disclosure. None. 10 NASDAQ Stocks with Biggest Upside is originally published on Insider Monkey.