On April 21, Chris Davis of Davis Advisors appeared on ‘The Exchange’ on CNBC to talk about selectivity in today’s market. Davis pointed out that putting companies in groups like the MAG7 covers their underlying businesses, which can have different fundamentals and therefore prospects. For this reason, he acknowledged that he owns certain stocks from MAG7 but not all. Davis also clarified that his overall focus is on value and growth, which leads him to a diverse set of holdings and not just tech, such as financials and healthcare names. He then argued that the market is shifting back toward selectivity and active management. He suggested that active management is positioned for a resurgence because the indexes have become highly concentrated and richly valued.
Davis acknowledged that while he cannot predict the market’s short-term movements, the present environment is ideal for stock pickers who can identify resilient businesses that are trading at reasonable valuations. He sees this as an opportunity for active management to outperform, as investors move away from momentum-driven index investing toward a more selective approach. He noted the growing popularity of actively managed ETFs as evidence that investors are beginning to act on this shift away from index concentration. He also believes that within the MAG7, only a few companies are truly well-positioned. Similarly, within the S&P 500, only 5% to 10% of companies possess the resiliency and durability needed for such volatile times.
Davis laid out what he sees as the major transitions shaping the current investment environment. First, he described the shift from nearly 15 years of free money to a more normal interest rate environment. Second, he pointed to the end of a multi-decade era of globalization, which was replaced by deglobalization, rising nationalism, and geopolitical tensions. Third, he highlighted the impact of AI. He said that these transitions are occurring against a backdrop of market complacency, with high valuations and concentrated growth expectations.
He believes that this is a time for investors to focus on resiliency, valuation, and the underlying business model of companies. That being said, we’re here with a list of the 12 best stocks under $100 to buy according to hedge funds.
A financial adviser looking over a portfolio of securities and stocks.
Our Methodology
We first used the Finviz stock screener to compile a list of the top stocks that were trading under $100 as of April 22. We then selected the 12 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 1000 elite money managers.
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).
12 Best Stocks Under $100 to Buy According to Hedge Funds
12. Micron Technology Inc. (NASDAQ:MU)
Share Price as of April 22: $66.74
Number of Hedge Fund Holders: 94
Micron Technology Inc. (NASDAQ:MU) designs, develops, manufactures, and sells memory and storage products. It operates through four segments: Compute & Networking Business Unit, Mobile Business Unit, Embedded Business Unit, and Storage Business Unit. It markets its products through its direct sales force, independent sales representatives, distributors, and retailers.
Micron’s FQ2 2025 revenue was $8.1 billion, with DRAM revenue at $6.1 billion, which was up 47% year-over-year. NAND revenue was at $1.9 billion, which was up 18%. HBM revenue exceeded $1 billion for the first time, which marked a 50% sequential improvement. The company is the sole high-volume shipper of low-power data center DRAM. It has sold out of 2025 HBM output and is developing HBM4, which boasts a 60% bandwidth increase.
The company plans further growth in DRAM and NAND bit shipments in FQ3, with revenue forecasted at ~$8.8 billion. On March 16, Baird analyst Tristan Gerra reaffirmed a Buy rating on the company with a $130 price target due to its growth potential in AI-related memory products. On April 17, Micron Technology Inc. (NASDAQ:MU) announced that it will be concentrating on the AI-linked demand for its memory chips from large-scale cloud providers.
Parnassus Value Equity Fund stated the following regarding Micron Technology, Inc. (NASDAQ:MU) in its Q2 2024 investor letter:
“Micron Technology, Inc. (NASDAQ:MU) posted fiscal-third-quarter results that met expectations. Micron’s DRAM (dynamic random access memory) and NAND (non-volatile storage technology) segments grew revenue strongly, continuing the company’s recovery from a cyclical downturn last year. We believe Micron is well positioned to capitalize on AI-driven demand for greater memory.”
11. PayPal Holdings Inc. (NASDAQ:PYPL)
Share Price as of April 22: $60.28
Number of Hedge Fund Holders: 94
PayPal Holdings Inc. (NASDAQ:PYPL) is a technology platform that enables digital payments for merchants and consumers worldwide. It operates a two-sided network at scale that connects merchants and consumers. It provides payment solutions under the PayPal, PayPal Credit, Braintree, Venmo, Xoom, Zettle, Hyperwallet, Honey, and Paidy names.
PayPal has more than $11 billion in cash and assets on its balance sheet, along with ~$5 billion in annual free cash flow. The company now has 432 million active accounts in 200+ countries. In 2024, PayPal’s branded checkout segment saw consistent quarterly growth in transaction margin dollars, with US growth particularly accelerating in Q4.
Upgraded checkout experiences, which are now live for more than 25% of US traffic, reduce latency by 40% when fully implemented and boost conversion rates by 1%. Fastlane, which is PayPal Holdings Inc.’s (NASDAQ:PYPL) streamlined checkout feature, also reached around 2,000 merchants and attracted 75% new or re-engaged PayPal users. Guidance for 2025 suggests that the company now has a focus on becoming a commerce platform and expanding into B2B bill pay.
Wedgewood Partners stated the following regarding PayPal Holdings, Inc. (NASDAQ:PYPL) in its Q1 2025 investor letter:
“PayPal Holdings, Inc. (NASDAQ:PYPL) was a leading detractor from performance for portfolios during the quarter. The Company’s branded checkout grew by a healthy +6% while total payment volumes grew by +7% during the Company’s most recent quarter. PayPal also outlined several reinvestment initiatives across its platform that continue to accelerate its branded checkout volume growth back to double digits. In addition, the Company has authorized nearly $20 billion in share repurchases which represents nearly a third of its market cap as of quarter end. We continue to hold PayPal as one of our largest active weights in portfolios.”