In this article, we discuss the 5 best booming stocks to buy now. If you want to read our detailed analysis of these stocks, go directly to the 10 Best Booming Stocks to Buy Now.
5. DraftKings Inc. (NASDAQ:DKNG)
Number of Hedge Fund Holders: 37
Percentage Increase in Share Price Over Past Six Months: 78%
DraftKings Inc. (NASDAQ:DKNG) operates a digital sports entertainment and gaming company. Over the past two quarters, the company has beat expectations on earnings and raised guidance numbers, wooing investors who had shed the stock because of valuation concerns last year in light of recession fears. Since the beginning of the year, the shares have skyrocketed, driven by a strong football season.
On May 22, investment advisory UBS upgraded DraftKings (NASDAQ: DKNG) stock to Buy from Neutral and raised the price target to $30 from $19, backing the firm to deliver 20%-plus annual revenue growth through 2026.
At the end of the first quarter of 2023, 37 hedge funds in the database of Insider Monkey held stakes worth $1.1 billion in DraftKings Inc. (NASDAQ:DKNG), compared to 32 in the preceding quarter worth $707 million.
In its Q1 2023 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and DraftKings (NASDAQ: DKNG) was one of them. Here is what the fund said:
“We re-initiated a position in former Fund holding DraftKings Inc. (NASDAQ:DKNG), a leading online sportsbook, digital casino, and daily fantasy sports operator. DraftKings’ mobile applications offer consumers the ability to wager on a wide variety of sporting events and play hundreds of real-money casino games. The company has spent the past three years building a proprietary technology stack that improves the customer experience and delivers best-in-class breadth of bet types (such as parlays, same-game parlays, and player props). State-level online sports betting (OSB) and iCasino legalization, along with a multi-year consumer adoption timeline in active states, has supported a 90% revenue growth rate for DraftKings since 2020. The opportunity for OSB legalization remains significant, with under 50% of the U.S. population currently having legal mobile sports betting. We expect 65% to 80% of the population will eventually have access to OSB. ICasino is currently legal in just seven states representing roughly 13% of the population. ICasino product adoption in legalized states has been robust, with the average user spending twice as much as a sports bettor. While the pace of legalization for iCasino has been slower, we believe additional states will pass regulation in the coming years.
As U.S. states began to legalize sports betting, the DraftKings management team moved quickly to build widespread brand awareness. DraftKings is the #2 operator in both OSB and iCasino by a wide margin, and has demonstrated improving market share trends across almost all states. When a new state legalizes sports betting, DraftKings has a first mover advantage as many of its customers are converted from the DraftKings daily fantasy sports offering. The quality of their sportsbook product along with increasingly targeted promotional spending results in strong customer retention and high lifetime values. In states where iCasino is legal, DraftKings can cross-sell OSB customers. DraftKings’ scale and product advantages are creating a flywheel that will enable the company to continue to out-invest the competition in acquisition marketing, retention, and research and development. The high barriers to entry are resulting in a consolidated industry that will eventually lead to a highly profitable business. This is evidenced by older-vintage state contribution margins that are already approaching 40%. Longer term, we believe DraftKings can generate EBITDA margins between 20% and 30% with strong free-cash-flow conversion.”
4. Exact Sciences Corporation (NASDAQ:EXAS)
Number of Hedge Fund Holders: 38
Percentage Increase in Share Price Over Past Six Months: 83%
Exact Sciences Corporation (NASDAQ:EXAS) provides cancer screening and diagnostic test products in the United States and internationally. In early May, the firm posted first quarter earnings that beat expectations on the top and bottom levels. It also raised 2023 guidance in the process. The firm now expects 2023 revenue of $2.38 billion to $2.42 billion, against estimates of $2.3 billion. The previous guidance was $2.265 billion to $2.315 billion.
On May 15, investment advisory Piper Sandler maintained a Neutral rating on Exact Sciences Corporation (NASDAQ:EXAS) stock and raised the price target to $80 from $70. The price target was raised after an impressive earnings report.
At the end of the first quarter of 2023, 38 hedge funds in the database of Insider Monkey held stakes worth $1.4 billion in Exact Sciences Corporation (NASDAQ:EXAS), compared to 39 in the preceding quarter worth $1.3 billion.
In its Q1 2023 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Exact Sciences Corporation (NASDAQ:EXAS) was one of them. Here is what the fund said:
“We initiated a position in Exact Sciences Corporation (NASDAQ:EXAS), a cancer diagnostics company whose flagship product is Cologuard, a stool-based DNA colon cancer screening test. Colon cancer is the second leading cause of cancer deaths in the U.S. Patients who are diagnosed early are more likely to have a complete recovery. Exact has a large opportunity to screen patients with Cologuard. There are roughly 110 million Americans between the ages of 45 and 85 who are at average risk for colon cancer. At a three-year screening interval and an average revenue per test of roughly $500, this represents a potential $18 billion annual revenue opportunity for Cologuard. Recently, the Cologuard business has exhibited strong momentum with several tailwinds driving growth, including demand from health systems, which are incentivized to comply with screening guidelines for enhanced payments, the American Cancer Society guideline change lowering the age of recommended screening from 50 to 45, increased adoption of electronic ordering, and a growing rescreening opportunity. Later this year, Exact expects to report clinical trial data on Cologuard 2.0, a second-generation screening test that management believes will have enhanced specificity and boost gross margins. Exact also plans to participate in the market for minimal residual disease testing and multi-cancer early detection, two large new market opportunities for the company. After many years of heavy investments in its laboratories, IT, and distribution, the company recently turned adjusted EBITDA positive and expects to turn free cash flow positive next year. Long term, management targets 80% gross margins and 40% adjusted EBITDA margins for the business.”
3. MongoDB, Inc. (NASDAQ:MDB)
Number of Hedge Fund Holders: 52
Percentage Increase in Share Price Over Past Six Months: 166%
MongoDB, Inc. (NASDAQ:MDB) provides general purpose database solutions. The firm has posted strong earnings in the past few months because of gains in managed databases and strong customer additions. Potential AI headwinds are also benefiting the stock. The cloud-based Atlas program of the firm is registering robust growth numbers, in addition to other notable programs like GitHub Copilot.
On June 2, investment advisory RBC Capital maintained an Outperform rating on MongoDB, Inc. (NASDAQ:MDB) stock and raised the price target to $400 from $235, noting the firm delivered an impressive earnings beat in the first quarter.
At the end of the first quarter of 2023, 52 hedge funds in the database of Insider Monkey held stakes worth $1 billion in MongoDB, Inc. (NASDAQ:MDB), up from 48 in the previous quarter worth $1.1 billion.
In its Q3 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and MongoDB, Inc. (NASDAQ:MDB) was one of them. Here is what the fund said:
“We made limited changes to the portfolio in the third quarter. New buys included embryonic positions in several rapid growers — MongoDB, Inc. (NASDAQ:MDB) and Clear Secure (YOU) — whose valuations have come in quite dramatically. MongoDB is a company we followed for many years before its 2017 IPO. The stock looks very attractive trading at a third of its recent peak in November 2021. The company’s database software is growing rapidly and taking share in a $50 billion plus global market.”
2. General Electric Company (NYSE:GE)
Number of Hedge Fund Holders: 59
Percentage Increase in Share Price Over Past Six Months: 56%
General Electric Company (NYSE:GE) operates as a high-tech industrial company in Europe, China, Asia, the Americas, the Middle East, and Africa. The stock has gained in the past few months after the firm announced plans to spin off the energy and power divisions into standalone companies. This would allow the firm to develop itself as an aerospace powerhouse and deliver strong growth in this rapidly evolving space.
On April 27, Citi analyst Andrew Kaplowitz maintained a Buy rating on General Electric Company (NYSE:GE) stock and raised the price target to $114 from $109, backing the firm for a relatively sustainable earnings growth runway.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Pzena Investment Group is a leading shareholder in General Electric Company (NYSE:GE) with 12 million shares worth more than $1.1 billion.
In its Q1 2023 investor letter, Vulcan Value Partners, an asset management firm, highlighted a few stocks and General Electric Company (NYSE:GE) was one of them. Here is what the fund said:
“General Electric Company (NYSE:GE) was a material contributor during the quarter. With the successful spin-off of GE HealthCare in early January, the company operates in two major markets: GE Aerospace and GE Vernova. GE Aerospace powers three out of every four commercial flights. GE Vernova helps generate 30% of the world’s electricity and has a meaningful role to play in the energy transition. The company’s service activities, which are higher margin and more resilient, represent approximately 60% of revenue and 85% of its backlog. The company reported strong fourth quarter 2022 results and management’s 2023 outlook is positive.”
1. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 132
Percentage Increase in Share Price Over Past Six Months: 145%
NVIDIA Corporation (NASDAQ:NVDA) provides graphics, computing and networking solutions. Recent reports suggest that tech giant Microsoft is stepping up investments in artificial intelligence with a deal to boost cloud computing infrastructure. The deal, worth billions, is being considered with start-up CoreWeave, an NVIDIA-backed company.
On May 31, Bank of America analyst Vivek Arya maintained a Buy rating on NVIDIA Corporation (NASDAQ:NVDA) stock and raised the price target to $500 from $450, noting that ethernet-based AI cloud environments further bolster the AI position of the company.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in NVIDIA Corporation (NASDAQ:NVDA) with 17.9 million shares worth more than $4.9 billion.
In its Q1 2023 investor letter, Fred Alger Management, an asset management firm, highlighted a few stocks and NVIDIA Corporation (NASDAQ:NVDA) was one of them. Here is what the fund said:
“NVIDIA Corporation (NASDAQ:NVDA) is a leading supplier of graphics processing units (GPUs) for a variety of end markets, such as gaming, PCs, data centers, virtual reality and high-performance computing. The company is leading in most secular growth categories in computing, and especially artificial intelligence and super-computing parallel processing techniques for solving complex computational problems. Simply put. Nvidia’s computational power is a critical enabler of Al and therefore critical to Al adoption, in our view. As such, we believe Nvidia is a long-term high unit volume growth opportunity. During the period, NVIDIA reported fiscal fourth-quarter results that met expectations, as the company navigated. through an inventory correction associated with the broad macroeconomic slowdown. Moreover, management gave fiscal year earnings guidance that was better than analyst estimates. noting strong year-over-year growth in gaming and data centers. Management’s constructive assessment of 2023 prospects. coupled with the rapid rollout and adoption of generative Al offerings, led to positive share price performance.”
You can also take a peek at Billionaire Stan Druckenmiller’s Top 10 Stock Picks and Billionaire Julian Robertson On Interest Rates and His Top Stock Picks For 2021.
