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.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In
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.”
4. Uber Technologies (NYSE:UBER)
Number of Hedge Fund Investors: 166
Jim Cramer in a recent program on CNBC discussed why the market reaction was wrong on Uber Technologies (NYSE:UBER)’s last quarterly results and explained the reasons why he remained positive on the company:
“Uber Technologies up more than 24% for the year, making it the fifth best performer in the S&P. About a month and a half ago, I stuck my neck out and defended Uber after it reported a widely panned quarter. Stock fell 7.5% in a single session. That seemed wrong to me. Turned out to be a very good call. It’s rallied quick 10 bucks in. Now, what made me confident enough to risk my neck on Uber? Well, in management’s own words, it was their quote “strongest quarter ever” end quote, with record tips, gross bookings, and adjusted EBITDA. Gross bookings were particularly impressive, up 21% year-over-year. I couldn’t believe why the stock was going down. Monthly active platform customers were up 14%. Total trips are up 18%. The rideshare business is booming. While Uber’s freight segment—that is their smallest, by the way—did have a gross bookings miss, the company’s two main businesses, mobility (meaning ride-sharing) and delivery (meaning Uber Eats), both beat expectations for gross bookings.
Even though there was some nitpicking on the guidance for the current quarter, I said that that it wasn’t enough to justify the stock’s vicious 7.5% selloff. Sure enough, over the next three days, Uber immediately shot up nearly 22%. Clearly, someone got it wrong when they were selling. The stock’s fared pretty well since then too.”
Hardman Johnston Global Equity Strategy stated the following regarding Uber Technologies, Inc. (NYSE:UBER) in its Q4 2024 investor letter:
“During the quarter, we initiated three new positions in Lennar Corporation, Bank of America Corp., and Uber Technologies, Inc. (NYSE:UBER). Uber is a leading platform company that facilitates ride-hailing, food delivery, and freight booking services, which each represent large and underpenetrated markets. Uber is active in more than 10,000 cities and approximately 70 countries globally, and Uber is a market leader with more than 65% market share in nearly all ride-sharing regions in which it operates. Uber should continue to benefit from secular tailwinds, product innovation, expansion, and network effects. The cross-selling of the Uber One membership program should drive both loyalty and engagement. International markets represent half the business and continue to be an important growth driver. Overall, we see sustained healthy topline growth for the company over the next three years with some insulation to global economic trends.”
3. Nvidia Corp (NASDAQ:NVDA)
Number of Hedge Fund Investors: 223
Joshua Brown, the co-founder and CEO of Ritholtz Wealth Management, said in a latest program on CNBC that while he’s long Nvidia Corp (NASDAQ:NVDA), he believes a slowdown in AI chips demand could impact the stock long term. He believes companies have been ordering Nvidia chips with the money they raised from wealth management firms and that chain of investments could break in case demand slows down.
“I’m long. I’m not negative on Nvidia long term. I’m telling you what I think the risk is right now. This is the part people don’t understand. Last summer, a press release went out from Blackstone gloriously announcing this massive infrastructure investment that they were making. And this is where the money comes from. When you hear the breathless reports that CoreWeave has acquired 300,000 GPUs, where the hell do you think they got the money to do that?
They’re getting the money from these huge pots of wealth management capital that’s going into AI infrastructure funds. And Blackstone is not alone. Everybody has one. It’s the hottest product for people in my seat to be selling to their clients. It’s billions and billions of dollars in debt financing so that CoreWeave can buy all this Nvidia product.
That’s great. Here’s the—here’s the rub. If for whatever reason, the demand doesn’t materialize fast enough to please the investors, then all of a sudden there’s less money for the next AI infrastructure fund, and the next one and the next one. And all of a sudden, CoreWeave doesn’t have the capital to buy more GPUs, which is where Nvidia—really at the end of the caboose of that long train I’ve described—that’s where they finally come out and say, turns out we may not have much more demand for the next version after Blackwell, as we thought we did.
Everything’s still great, but it’s a little bit of a dial down. How do you think Wall Street’s going to take that calmly?”
The market will keep punishing Nvidia for not coming up to its gigantic (and sometimes unrealistic) growth expectations. About 50% of the company’s revenue comes from large cloud providers, which are rethinking their plans amid the DeepSeek launch and looking for low-cost chips. Nvidia’s Q1 guidance shows a 9.4% QoQ revenue growth, down from the previous 12% QoQ growth. Its adjusted margin is expected to be down substantially as well to 71%. The market does not like it when Nvidia fails to post a strong quarterly beat. The stock will remain under pressure in the coming quarters when the company will report unimpressive growth.
Nvidia is facing challenges at several levels. Competition is one of them. Major competitors like Apple, Qualcomm, and AMD are vying for TSMC’s 3nm capacity, which could limit Nvidia’s access to these chips. Why? Because Nvidia also uses TSMC’s 3nm process nodes. Nvidia is also facing direct competition from other giants that are deciding to make their own chips. Amazon, with its Trainium2 AI chips, offer alternatives. Trainium2 chips could provide cost savings and superior computational power, which could shift AI workloads away from Nvidia’s offerings. Apple is reportedly working with Broadcom to develop an AI server processor. Intel is also trying hard to get back into the game with Jaguar Shores GPU, set to be produced on its 18A or 14A node.
Harding Loevner Global Developed Markets Equity Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q4 2024 investor letter:
“For the full year, the composite’s underperformance was primarily due to poor stock choices in the US. NVIDIA Corporation (NASDAQ:NVDA), which we sold in the first quarter and repurchased in the fourth quarter, caused almost two-thirds of the strategy’s underperformance. We were hurt by our underweight as NVIDIA’s stock price soared during the first half of the year on the insatiable demand for the company’s graphics processing units (GPUs), which enable generative Al computing.
After ASML’s disappointing outlook led industry valuations to compress, we added a strong company back to the portfolio-NVIDIA.
There were two main reasons we sold NVIDIA last February (after holding the stock for more than five years). First, its biggest customers-data-center behemoths Amazon, Alphabet. Meta Platforms, and Microsoft-have been designing their own custom semiconductor chips, called application-specific integrated circuits (ASICS), that could eventually erode NVIDIA’s dominance. Second, it was unclear to us whether the adoption of Al by large enterprises will be as fast and meaningful as the optimistic views suggested…” (Click here to read the full text)
2. Microsoft Corp (NASDAQ:MSFT)
Number of Hedge Fund Investors: 317
Dan Niles, Niles Investment Management founder, reiterated in a latest program on CNBC that AI capex is slowing down. Niles gave the example of Microsoft Corp (NASDAQ:MSFT) to prove his point:
“If you look at Microsoft, for example, which is the biggest capex spender out there, they’re going to spend over $80 billion this year. People look at that and they go, wow, fiscal year 25 capex this year is going to be up over 50% from Microsoft, and you get all excited and go, wow, it just shows capex demand is strong.
If you look at it on a sequential basis—because remember, Microsoft’s fiscal year ends in June—on a sequential basis, capex was growing about 16% on average each quarter of last year. They have guided to flat sequential growth for the next two quarters.
And so that’s why, and you can see that in a lot of the companies, whether it’s Amazon or the other big names out there. It’s just looking at the math, not me, and you go, well, that’s slowing down.”
Generation Global Equity Strategy stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q4 2024 investor letter:
“Microsoft Corporation (NASDAQ:MSFT), the world’s largest software company, has been in the portfolio for over a decade. We like the firm because its products align closely with society’s evolving needs. As the world digitises, demand for Microsoft’s tools will continue to grow. The company enjoys a wide economic moat – built on its unique market position, deep customer understanding and extensive global footprint.
Microsoft’s management team has a long-term vision. It makes bold investments in future growth, most recently in AI. We forecast that the IT intensity of the economy will double over the next 15 years. Microsoft is a rare company with USD 250 billion in revenues, projected to grow at 16% annually over the next five years.14 Earnings-per share could grow faster. Despite its near-term valuation appearing high, we believe Microsoft is well positioned to lead in the AI era, potentially doubling or tripling its market share. Additionally, we expect returns on capital (ROC) for its AI related investments to match historical levels, despite market scepticism.
There are risks. Demand for AI systems may not materialise as expected, and increasing pricing power among suppliers like Nvidia could pressure margins. Still, from our analysis we see substantial long-term value in this name.”
1. Amazon.com (NASDAQ:AMZN)
Number of Hedge Fund Investors: 339
Scott Devitt from Wedbush said in a latest program on Schwab Network that Amazon.com (NASDAQ:AMZN) might face headwinds in the short term, but the stock is poised for growth for the long term:
It’s about duration. Really, you know, on a shorter-term basis, Amazon is not in such a secular growth stage within its business that it’s going to overcome a slowdown in consumer spending. So, should the consumer continue to slow, as it’s already begun to do in the U.S. market, that’ll contribute to a deceleration in Amazon’s core business. There’s no really stopping that. When you look at it from an intermediate to longer-term basis, Amazon’s retail business continues to gain share of total retail on a global basis, excluding China. The advertising business is growing, mid-teens toward 20%, and AWS is a hundred-billion-dollar revenue business, also growing, depending on the quarter and comps, mid-teens to 20%. Margins are rising and should grow 20% CAGR for the next five years, barring an unforeseen recession. So, the setup for the stock is very good intermediate to long-term. Short-term, who knows?
Harding Loevner Global Developed Markets Equity Strategy stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q4 2024 investor letter:
“During the quarter, we benefited from strong stocks within the Communication Services and Consumer Discretionary sectors. In Consumer Discretionary, Amazon.com, Inc. (NASDAQ:AMZN) reported strong third-quarter results. Revenue increased by double digits, led by growth in advertising and Al products, while the company’s operating margins also hit an all-time high of 11%. The key reasons for the higher margins were that its international e-commerce operations turned profitable, and there was faster growth in its high-margin cloud-computing business.”
While we acknowledge the potential of Amazon.com (NASDAQ:AMZN), our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AMZN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
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