In this article, we will take a look at the 11 hot tech stocks to buy now. To skip our analysis of the recent technology trends, and market activity, you can go directly to see the 5 Hot Tech Stocks to Buy Now.
The technology sector is going through a major transition with the advent of generative artificial intelligence. There have been rapid developments in the sector since the launch of OpenAI’s ChatGPT, a large language model (LLM), launched in November 2022. The platform received widespread acceptance with tens of millions of users flocking to the model. Alphabet Inc.’s (NASDAQ:GOOG) followed up with Google Bard which is giving strong competition to other LLMs.
With significant investment from Microsoft Corporation (NASDAQ:MSFT) in OpenAI, reportedly to the tune of billions of dollars, OpenAI has made significant improvements to its model. In addition, Microsoft has integrated some of the features of the LLM into its suit of products. Artificial intelligence is seen to be the main factor in the recent performance of Microsoft Corporation’s (NASDAQ:MSFT) share price as well as quarterly results.
Several other companies are working on their own LLMs or have already launched their own models for different purposes. In addition, companies are focusing on utilizing the power of generative AI to improve processes, products and services, and experiences, in any shape and form. This has suddenly raised the demand for higher computational power and the hardware required to run it. NVIDIA Corporation (NASDAQ:NVDA) is one of the biggest beneficiaries of this surge in demand as some of the biggest tech companies are among its customers.
You can read more about the latest trends in the technology arena in our recent article: Top 15 Tech Trends In 2023
Global markets have been going through a rough patch with rising inflation and aggressive monetary policies implemented by central banks. Despite that, 2023 has been a year of recovery for the US stock markets with NASDAQ-100 index, heavily weighted by tech stocks, leading the charge. The NASDAQ-100 index is up nearly 42% year-to-date and 7.8% up in November so far.
The companies picked in this list are at the forefront of their market segments and industries and hold significant competitive advantage over their peers based on strong technological capabilities. The companies have strong fundamentals and have exhibited high growth in the past with the potential to make breakthroughs in the future as well. Majority of these companies are benefiting from the AI boom in one form or another.
The list includes some of the biggest technology companies including smartphone and personal devices maker Apple Inc. (NASDAQ:AAPL), software and tech giant Microsoft Corporation (NASDAQ:MSFT), several chipmakers including NVIDIA Corporation (NASDAQ:NVDA), and Advanced Micro Devices, Inc. (NASDAQ:AMD), among others.
A close-up of a computer chip, its intricate components safeguarding digital security.
Methodology
We first used stock screeners to identify tech stocks that have gained at least 5% year to date in 2023 and have an average 3-month volume of more than 5 million as of November 10. From this resultant dataset we picked the stocks with highest volumes and share price gains. The list is ranked in ascending order of average 3-month share volume.
11. Shopify Inc. (NYSE:SHOP)
3-Month Average Volume: 11.43M
YTD Performance: 73.93%
Number of Hedge Fund Holders: 74
Shopify Inc. (NYSE:SHOP) is a leading provider of internet infrastructure for commerce, offering tools to start, grow, market, and manage a retail business of any size. Its platform and services are used by millions of businesses across 175 countries.
As of Q2 2023, 74 of the 910 hedge funds tracked by Insider Monkey owned shares of Shopify Inc. (NYSE:SHOP), valued at $3.9 billion. This is what Baron Funds, an investment management firm, had to say about Shopify Inc. (NYSE:SHOP) in its Q3 2023 investor letter:
“[W]e believe that Shopify will continue to benefit from its position as the commerce operating system for its merchants. Rather than replacing Shopify, various selling channels, including TikTok, are managed within the platform, which should enable Shopify to maintain its competitive advantage over the long term [. . .] We remain shareholders due to Shopify’s strong competitive positioning, innovative culture, and long runway for growth, as it still holds less than a 2% share of the global commerce market.”
10. IonQ, Inc. (NYSE:IONQ)
3-Month Average Volume: 12.05M
YTD Performance: 225.51%
Number of Hedge Fund Holders: 19
College Park, Maryland-based IonQ, Inc. (NYSE:IONQ) is a technology company focused on the development of quantum computers designed to solve the world’s most complex problems. It has produced six generations of trapped-ion quantum computers since inception in 2015. IonQ’s current generation quantum computer, IonQ Forte, is the latest in a line of cutting-edge systems, boasting an industry-leading 29 algorithmic qubits.
On November 8, IonQ, Inc. (NYSE:IONQ) released its financial results for the third quarter of 2023. Its total revenue surged by 122% y-o-y to $6.1 million, while it reported a net loss of $44.8 million. The company achieved $26.3 million in new bookings for the quarter, which brings total new bookings during the nine months to $58.4 million.
IonQ, Inc. (NYSE:IONQ) has had the best YTD performance out of the 11 stocks on our list of hot tech stocks to buy now. The stock has gone up 225.51% since the beginning of the year and analysts expect it to grow further with the average analyst target price of $15.87 which represents a potential upside of 41.32%.
9. Micron Technology, Inc. (NASDAQ:MU)
3-Month Average Volume: 13.16M
YTD Performance: 47.20%
Number of Hedge Fund Holders: 86
Boise, Idaho-based Micron Technology, Inc. (NASDAQ:MU) is a leading semiconductor manufacturer providing memory and storage solutions. It delivers a portfolio of high-performance DRAM, NAND and NOR memory and storage products through Micron® and Crucial® brands.
In September, Micron Technology, Inc. (NASDAQ:MU) reported the financial results for the quarter ended August 31, 2023. It generated a revenue of $4.0 billion and a net loss of $1.4 billion. Normalized EPS of -$1.07 for the quarter, surpassed the consensus estimates by $0.11.
Following the earnings release, Rosenblatt analyst Hans Mosesmann reiterated a ‘Buy’ rating for Micron Technology, Inc. (NASDAQ:MU) shares while maintaining a $100 target price which represents a potential upside of 35.92% based on the share price on November 8.
According to the Insider Monkey data on 910 leading hedge funds, 86 hedge funds were long Micron Technology, Inc. (NASDAQ:MU) shares as of Q2 2023, with the total shares held by hedge funds valued at $4.0 billion. Ken Griffin’s Citadel Investment Group was the largest shareholder on record with ownership of 6.7 million shares valued at $425 million.
8. Affirm Holdings, Inc. (NASDAQ:AFRM)
3-Month Average Volume: 14.90M
YTD Performance: 157.08%
Number of Hedge Fund Holders: 22
San Francisco, California-based Affirm Holdings, Inc. (NASDAQ:AFRM) is a pay-over-time financial services provider enabling customers to pay in installments. It boasts more than 266,300 merchants and more than 16.9 million active customers on its platform.
On November 2, Affirm Holdings, Inc. (NASDAQ:AFRM), announced an extended partnership with ecommerce giant Amazon.com, Inc. (NASDAQ:AMZN) that makes Affirm the first pay-over-time option available at checkout on Amazon Business, a B2B store for businesses of all sizes.
On November 8, Affirm Holdings, Inc. (NASDAQ:AFRM) released its financial results for the quarter ended September 30. Its revenues increased by 37% y-o-y to $497 million, while its net loss shrunk by 32% y-o-y to $172 million. The normalized EPS was recorded at -$0.56, which surpassed the consensus by $0.05.
7. Uber Technologies, Inc. (NYSE:UBER)
3-Month Average Volume: 18.32M
YTD Performance: 102.39%
Number of Hedge Fund Holders: 144
San Francisco, California-based, Uber Technologies, Inc. (NYSE:UBER) provides technology platforms matching consumers looking for rides and independent ride services providers. It also offers other forms of transportation including public transit, bikes, and scooters. Other offerings include food delivery on demand, freight services, business fleet services, and same day delivery options. It operates in over 70 countries worldwide and boasts more than 142 million monthly active platform consumers.
On November 7, Uber Technologies, Inc. (NYSE:UBER) released its financial results for Q3 2023. Even though the company narrowly missed both the top and bottom line consensus estimates, it showed strength in other key operational metrics such as gross bookings which exceeded the company’s guidance at $35.3 billion, up 21% y-o-y.
As of Q2 2023, 144 of the 910 hedge funds tracked by Insider Monkey were long Uber Technologies, Inc. (NYSE:UBER), holding shares worth $7.7 billion. Brad Gerstner’s Altimeter Capital Management was the largest shareholder with ownership of 13.3 million shares valued at $576 million.
6. Microsoft Corporation (NASDAQ:MSFT)
3-Month Average Volume: 22.53M
YTD Performance: 50.40%
Number of Hedge Fund Holders: 300
Redmond, Washington-based Microsoft Corporation (NASDAQ:MSFT) is a leading technology company with products include operating systems, cross-device productivity applications, server applications, business solution applications, desktop and server management tools, software development tools, and video games.
Microsoft Corporation (NASDAQ:MSFT) is among the leaders in the AI race following its partnership with OpenAI, the creator of Chat GPT – an artificial intelligence powered chatbot. Microsoft Corporation (NASDAQ:MSFT) is using its AI capabilities to improve its existing products and services including Bing Search, Cloud, as well as its Office Suite.
In its Q3 2023 investor letter, Baron Funds, an investment management company, made the following comments about Microsoft Corporation (NASDAQ:MSFT):
“Microsoft was traditionally known for its Windows and Office products, but over the last five years, it has built an over $60 billion cloud business, including its Azure cloud infrastructure service and its Office 365 and Dynamics 365 cloud-delivered applications. [. . .] Microsoft continues to execute at a high level, navigating a challenging macro backdrop while aggressively investing in long-term growth, and we remain confident that Microsoft is well positioned to leverage AI over the medium to long term as it infuses Open AI and other generative AI technologies across its entire product portfolio.”
As of Q2 2023, Microsoft Corporation (NASDAQ:MSFT) ranks highest on our list of 11 hot tech stocks to buy now in terms of hedge fund sentiment as it was the most sought-after stock among the 910 hedge funds tracked by Insider Monkey. 300 of these hedge funds held shares in the software giant, valued at $70 billion.
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Disclaimer. None. 11 Hot Tech Stocks to Buy Now is originally published on Insider Monkey.