In this article, we will take a detailed look at the 10 Stocks on Analysts’ Radar Amid Tariff Turbulence.
Dan Niles, Niles Investment Management founder, predicted in a CNBC program earlier this month that unlike previous market crashes, the latest market volatility of 2025 could see a quick resolution because it was “self-inflicted.”
“Unlike prior drawdowns that you’ve seen, like the global financial crisis, you’re not going to fix the problem in a day because you’ve accumulated tons of bad mortgages. You’re not going to fix COVID because it’s a global pandemic in a day. You’re not going to fix the tech bubble meltdown because you overinvested for 5 years back in the late 1990s. This you can literally fix overnight if everybody, you know, resettles the tariffs because this is a self-inflicted wound.”
However, this does not mean Niles is bullish on the market in the long term. He still has valuation concerns and reiterated that he entered the year with cash as his biggest holding. Niles said his top five picks do not include any of the Mag. 7 companies, and he would remain cautious on valuations:
Asked about his preferences in the current market environment, the analyst warned investors to steer clear of high valuations and big promises that lie far into the future:
“I would focus on is which companies are generating a lot of cash, which ones tend to pick up market share during recessions. Those are the types of names that you want to be in because if you’re in stuff where, well, you know 10 years from now it’s going to be a big market, you’re going to get absolutely murdered if you get into a recession,” Niles said.
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For this article, we picked 10 stocks Wall Street analysts have been focusing on. With each stock, we have mentioned its hedge fund sentiment. 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Copyright: stokkete / 123RF Stock Photo
10. CoreWeave Inc (NASDAQ:CRWV)
Number of Hedge Fund Investors: N/A
Aswath Damodaran, NYU Stern School of Business, said in a latest program on CNBC that “buzzwords” like Nvidia or AI won’t help CoreWeave Inc (NASDAQ:CRWV) because the dynamics of AI trade have changed:
“It’s less about the company and more about where the AI trade is going from this point on. I mean, the way to think about it is, a year ago, if CoreWeave had gone public, the words AI and Nvidia would have been enough to carry it over the line. The fact that it’s not able to do it now is an indicator that the momentum of just trading based on the words or Nvidia are not working anymore. I think that’s healthy. I think it’s all, you know, when you just push up pricing based on buzzword, you’re asking for trouble. So maybe this coming down to reality is a good thing, but CoreWeave is going to be at the target of that coming down.”
9. GameStop Corp (NYSE:GME)
Number of Hedge Fund Investors: 24
Jim Cramer in a latest program on CNBC reaffirmed his bearish view on GameStop Corp (NYSE:GME) while talking about the company’s latest offering and its plans to buy bitcoin.
“I like Bitcoin. I had a lot of Bitcoin. Why? Because of $36 trillion in debt. I have a lot of gold and a lot of Bitcoin because I’ve been very public in saying that I’m very concerned for my kids about what happens with $36 trillion in debt. I don’t know if we can grow out of it, and it’s just an insurance play. But I don’t want to own GameStop. I have other ways.”
8. Texas Roadhouse Inc (NASDAQ:TXRH)
Number of Hedge Fund Investors: 52
Jim Cramer in a recent program on CNBC mentioned a bullish Wall Street note on Texas Roadhouse:
“It’s just I think one of the best restaurant chains in America. It’s going regional national. Peter Lynch. Listen up. One of the great investors of all time. Texas Roadhouse.. and WedBush comes out today and says you got to buy it. There had been a problem February had been slow March has been a reaceleration and it’s completely ignored. The this is just a great piece of research. We’ve been waiting for this to happen. I think those who have gone to a Texas Roadhouse fair for 11 bucks you get a you get one of the greatest meals ever and it starts with these great cinnamon rolls.”
7. Cisco Systems Inc (NASDAQ:CSCO)
Number of Hedge Fund Investors: 84
Dan Niles, Niles Investment Management founder, has been saying that AI capex is slowing down and major names like Nvidia and Apple will struggle to post strong growth in the future. However, in a latest program on CNBC, Niles was asked what specific names he likes. Here is what he said:
“I started the year with my top picks, and two of them were related to AI, but it’s companies that take advantage of all this money spent on AI infrastructure over the last two years. Well, you’re producing all this data, but then companies want to get access to it, and so that’s why I like Cisco. I think you’re going to see an upgrade in enterprise for those networks. And then telecom carriers want to be able to let consumers, through fiber, get access to that as well.”
GreensKeeper Asset Management stated the following regarding Cisco Systems, Inc. (NASDAQ:CSCO) in its Q3 2024 investor letter:
“In the third quarter, we decided to exit our investment in Cisco Systems, Inc. (NASDAQ:CSCO), as we believed the stock had become fully valued and reallocated the capital to one of our international positions. We also initiated a new position in a Canadian company shortly after the quarter ended. As we may still accumulate shares, we will defer discussing this new holding for the time being. Our top ten positions are detailed in the table below. Further portfolio disclosures, including performance statistics, are available on the pages immediately following this letter.”
6. Tesla Inc (NASDAQ:TSLA)
Number of Hedge Fund Investors: 126
Americus Reed, Wharton School of Business professor, said in a latest program on CNBC that Elon Musk’s involvement in politics has become a “huge” issue for Tesla Inc (NASDAQ:TSLA) and the board.
“It’s a huge issue. Carl and I think we’re beginning to see the roost, sort of the chickens come home to roost, and that idea that, listen, we’ve got a very radioactive lightning rod of a public figure that’s out there saying all kinds of things, putting all kinds of ideological points of view out there, and that is really potentially damaging to the product, service, the brand, and organization. Because I think about this, Carl, it’s like you’re literally, if you cause a consumer to not buy your product, not because it’s good or bad but because of something you say, that’s a very dangerous situation to be in. And I think we’re at the point now where, with Elon Musk, we’re going to see, because he’s pushing the envelope in so far as how far can I go and be who I am authentically to my loyal advocates and supporters and push this edge of the sort of boundaries, where the board of directors and shareholders say, “Hey listen, enough is enough.”
Tesla recently reported a bleak quarterly report as the company’s struggles keep increasing. Tesla’s EV sales are falling all over the world as the company faces challenges from competitors. Even if Elon Musk increases his focus to fix the company’s problems, it would take a lot of effort to come out of the demand crisis. For example, in California, the largest U.S. market for electric vehicle adoption and sales, Tesla sales fell about 12% year over year in 2024, causing its market share to drop from 60.1% in 2023 to 52.5% in 2024. Was it because Californians are buying fewer EVs? No. Californians purchased more than 2 million electric cars during the year, almost double when compared to the past two years.
Things aren’t looking good for Tesla in Europe, either. For example, in Germany, Tesla delivered just 1,429 new cars in February, down 76% from the same month last year. In contrast, battery-electric vehicle (BEV) registrations surged 30.8% during the month.
Tesla Inc’s (NASDAQ:TSLA) product lineup is showing signs of stagnation, with over 95% of sales still coming from the Model 3 and Model Y. Meanwhile, competitors are rolling out more advanced models. According to Reuters, Tesla’s market share in Europe is slipping as legacy automakers like BMW post stronger sales. Chinese competitor BYD is also gaining ground in Europe, despite talk of tariffs.
JDP Capital Management stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its Q4 2024 investor letter:
“Tesla, Inc. (NASDAQ:TSLA) is new core position that I wrote about in 2024 Half Year Letter. The stock was up 115% in 2024. We benefited from the June 2024 timing of our purchase, buying after the stock had declined about 30% in the first part of the year.
We repurchased TSLA at a time when the market had [again] become overly bearish based on slowing vehicle orders despite the company having just achieved a breakthrough in Full Self Driving (FSD v12). If you haven’t had a chance to experience the most recent Full Self Driving software (FSD 13.3) I suggest you try it for yourself. If you’ve had a Tesla for a while, you know that the trajectory of FSD improvement has been nothing less than astounding.
It has become clearer to me that Tesla’s leadership position in the infrastructure layer underpinning mega-trends in robotics, smart vehicles and battery storage will unlock earnings growth that we can ride for years. Similar to AWS or the iPhone, Full-Self-Driving and Optimus will enable new business models to be built across a wide range of industries over time…” (Click here to read the full text)
5. Apple Inc (NASDAQ:AAPL)
Number of Hedge Fund Investors: 166
OptionsPlay’s Tony Zhang in a latest program on Schwab Network explained the challenges Apple Inc (NASDAQ:AAPL) is facing. The analyst believes Apple has failed to see the expected growth from AI:
“We’re currently in an environment where Apple simply just continues to face multiple headwinds right now. I mean, we really have to start off with the fact that, you know, iPhone 16 sales overall have been somewhat underwhelming. Every single data point that we seem to get every single month with regards to iPhone 16 sales continue to kind of show a slowdown in terms of the upgrade cycle for the iPhone, which is meant to be the primary driver of revenue for Apple. And, you know, more importantly, I think the fact that Apple has essentially staked their entire future in augmented reality at the moment, they’re not a leader in that particular space in either the software or the hardware side of things. So, I think from that perspective, you know, we’re really talking about current concerns around the product cycle that is concerning, and then the future that looks quite uncertain. And then you put into the fact that they’ve really fumbled the launch of augmented reality or, or I’m sorry, of AI for Apple. You know, this was meant to be the primary driver of the next upgrade cycle for the iPhone 16. And now it’s looking like it’s not even going to potentially be a driver of sales for the iPhone 17. So, you know, when you’re in an environment where there’s clearly a slowdown in consumer demand, you look at the macro environment where consumer sentiment is at multi-year lows, and we’re seeing a meaningful slowdown in actual consumer spending.”
Apple’s last quarterly results were helped by Services revenue in the latest quarter, but the key challenges haunting the company remain as they were. Many analysts believe that just a few AI apps would not be enough to trigger a broader upgrade cycle for iPhone. Apple is dealing with currency headwinds as the stronger US dollar is expected to reduce top-line growth by 2.5% next quarter. For Q2 FY2025, management expects overall revenue to grow in the low to mid-single digits. Apple’s stock is trading at a premium valuation, with a price-to-earnings ratio of 39-40x, a price-to-free-cash-flow ratio of 33-34x, and a PEG ratio exceeding 3x. Upcoming quarters would be difficult for Apple and its current valuation is not justified.
Columbia Seligman Global Technology Fund stated the following regarding Apple Inc. (NASDAQ:AAPL) in its Q4 2024 investor letter:
“The fund maintained a position in Apple Inc. (NASDAQ:AAPL) throughout the quarter through the release of the company’s new iPhone 16 in September. Company leaders were excited about the release of the new model, as this is the first model that will feature enhanced AI capabilities through the Apple Intelligence features. Sales for the first few weeks in October and November trailed behind year over year sales from the iPhone 15, as availability of Apple Intelligence was not compatible with all iPhone models. Apple announced a partnership with OpenAI that has allowed the integration of ChatGPT into the Apple ecosystem, separate from the core Apple Intelligence features. This partnership highlights continued progress from Apple to introduce AI capabilities into its products and we expect the iPhone 17 to have even more expansive AI capabilities, increasing potential demand for the new model that is on track to be released in 2025.”