5 Best Hot Stocks To Buy Now

In this article, we discuss 5 best hot stocks to buy now. If you want to see more stocks in this selection, check out 13 Best Hot Stocks To Buy Now. 

5. Peloton Interactive, Inc. (NASDAQ:PTON)

Average 3-month Volume as of February 6: 13.62 million

YTD Share Price Gains as of February 6: 90.79%

Number of Hedge Fund Holders: 45

Peloton Interactive, Inc. (NASDAQ:PTON) is a New York-based company that operates interactive fitness platforms in North America and internationally, under the Peloton Bike, Peloton Bike+, Peloton Tread, and Peloton Tread+ names. Peloton Interactive, Inc. (NASDAQ:PTON) is one of the best momentum stocks to monitor. For FQ3 2023, the company expects revenue in the range of $690 million to $715 million, versus a consensus of $694.51 million. 

On February 2, Needham analyst Bernie McTernan increased the firm’s target price for Peloton Interactive, Inc. (NASDAQ:PTON) to $20 from $14 while maintaining a Buy rating after the release of its Q2 results. The analyst noted that the company’s revenue exceeded expectations and progress has been made in improving product gross margins. The analyst pointed out that previously, declining product margins and rising fixed costs overshadowed the benefits of a Peloton subscription, but this trend is now diminishing.

According to Insider Monkey’s data, Peloton Interactive, Inc. (NASDAQ:PTON) was part of 45 hedge fund portfolios as of the end of the third quarter of 2022, compared to 39 in the prior quarter. Anand Desai’s Darsana Capital Partners is a prominent stakeholder of the company, with 10 million shares worth $69.30 million. 

Here is what Merion Road Capital specifically said about Peloton Interactive, Inc. (NASDAQ:PTON) in its Q3 2022 investor letter:

“Peloton Interactive, Inc. (NASDAQ:PTON) is quite a different story. You may recall from my Q1 letter that I initiated a position in the stock given the potential for a new CEO to leverage the company’s passionate and engaged user base. The investment had meaningful upside potential (multiples of the then trading price), but also presented real downside risk; as such, I kept our exposure to just a few percentage points of the portfolio. Fast forward six months and underlying trends like churn, engagement, and new users weakened dramatically. I sold our shares as the likelihood for the company to achieve financial success has become increasingly remote.”

4. Warner Bros. Discovery, Inc. (NASDAQ:WBD)

Average 3-month Volume as of February 6: 28.81 million

YTD Share Price Gains as of February 6: 60.64%

Number of Hedge Fund Holders: 61

Warner Bros. Discovery, Inc. (NASDAQ:WBD) is a New York-based media company that delivers content across multiple platforms in around 50 languages worldwide. It creates, develops, and distributes feature films, television shows, video games, and other content in a variety of physical and digital formats through basic networks, direct-to-consumer channels, theatrical releases, TV programming, and gaming licenses. Warner Bros. Discovery, Inc. (NASDAQ:WBD) is one of the best momentum stocks to consider. 

On January 31, Macquarie analyst Tim Nollen raised the firm’s price target on Warner Bros. Discovery, Inc. (NASDAQ:WBD) to $20 from $16 and kept an Outperform rating on the shares as part of the firm’s Q4 media networks preview. The results “may be challenging,” but the firm believes that the negative impact of the merger is “over” and that the upcoming combined HBO Max/Discovery+ streaming service has the potential to showcase the value of its content and distribution assets. Macquarie considers Warner Bros. Discovery, Inc. (NASDAQ:WBD) to be its top choice in the media industry.

According to Insider Monkey’s third quarter database, 61 hedge funds were long Warner Bros. Discovery, Inc. (NASDAQ:WBD), compared to 68 funds in the last quarter. 

O’keefe Stevens Advisory made the following comment about Warner Bros. Discovery, Inc. (NASDAQ:WBD) in its Q4 2022 investor letter:

“Several positions within the portfolio deserve some reflection; however, the one deserving the most attention is Warner Bros. Discovery, Inc. (NASDAQ:WBD). Not surprisingly, it was one of the worst-performing stocks in our portfolio over the past year.

Warner Brothers Discovery (WBD) – One concept learned from Jeremy Raper at Raper Capital (@Puppyeh1 on Twitter) is “when there’s a massive pivot in biz model and under-delivery vs. clear IPO targets, it’s generally a big red flag.” While WBD is not a recent IPO, it went through a dramatic business model change. I recall two examples of companies that pivoted strategies…” (Click here to read the full text)

3. Shopify Inc. (NYSE:SHOP)

Average 3-month Volume as of February 6: 21.29 million

YTD Share Price Gains as of February 6: 46.95%

Number of Hedge Fund Holders: 62

Shopify Inc. (NYSE:SHOP) is a Canadian commerce company that offers a commerce platform and services in Canada, the United States, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. On January 3, Shopify Inc. (NYSE:SHOP) launched a new integration aimed at large retailers. The Canadian e-commerce company stated that its new Commerce Components will enable big retailers to incorporate parts of Shopify into their own current systems. This move is a significant step towards establishing partnerships with major retailers and increasing the appeal of its technology for smaller retailers and sellers.

On February 1, Scotiabank analyst Kevin Krishnaratne initiated coverage of Shopify Inc. (NYSE:SHOP) with a Sector Perform rating and a $43 price target. The analyst thinks that Shopify Inc. (NYSE:SHOP) should be a key technology holding because it is a leading player in the process of transforming the retail industry. However, the neutral rating reflects the stock’s high valuation following a 40% increase in its value this year, as well as its proximity to double the September lows. The analyst wrote in its research note that while the recent rise in subscription plan prices might result in some upward revisions to revenue estimates for the Subscription Solutions division, there are still risks to revenue for the Merchant Solutions division because of declining consumer spending trends.

According to Insider Monkey’s data, 62 hedge funds were long Shopify Inc. (NYSE:SHOP) at the end of the third quarter of 2022, compared to 60 funds in the prior quarter. Cathie Wood’s ARK Investment Management is the largest position holder in the company, with 14.5 million shares worth $391.50 million. 

Artisan Partners made the following comment about Shopify Inc. (NYSE:SHOP) in its Q3 2022 investor letter:

“Shopify Inc. (NYSE:SHOP) is a leading e-commerce platform supporting over 2 million merchants with software, online storefronts and payments technology. Like Uber, Shopify returned to mid-cap territory during Q2 as the company’s profit cycle and share price have faced significant pressure. Earlier this year, the company began a phase of investments to support a range of future growth drivers, including Shopify Plus for larger brands, logistics services, international expansion, point-of-sale payments and social media-based commerce. With high inflation putting pressure on consumer spending, and with e-commerce activity normalizing after a massive pandemic spike, Shopify’s earnings have fallen sharply. While we have outstanding questions about the likelihood of success for the company’s capital-intensive logistics investments, we decided to take advantage of the stock’s >75% YTD decline and initiate a GardenSM position at a deep discount to our PMV estimate. Our thesis is predicated on our belief there is still a long runway for commerce to move online, and Shopify is well-positioned to win share of this market. The company has created an ecosystem of products (payment processing, financing, shipping, customer engagement tools, etc.), partners (TikTok, Google, Meta), sales channels and over 6,000 apps to help its merchants sell online and establish direct relationships with customers.”

2. Tesla, Inc. (NASDAQ:TSLA)

Average 3-month Volume as of February 6: 149.29 million

YTD Share Price Gains as of February 6: 79.51%

Number of Hedge Fund Holders: 88

Tesla, Inc. (NASDAQ:TSLA) is a company that creates, designs, manufactures, and sells electric cars, energy storage, and generation systems worldwide, including in the United States and China. Tesla, Inc. (NASDAQ:TSLA) sold 66,051 electric vehicles manufactured in China in January, according to data from the China Passenger Car Association. The company intends to produce an average of 20,000 units per week at its Shanghai factory for the next two months. It is one of the best momentum stocks to invest in. 

On February 6, RBC Capital analyst Tom Narayan raised the price target on Tesla, Inc. (NASDAQ:TSLA) to $223 from $186 and maintained an Outperform rating on the shares. He believes that Tesla, Inc. (NASDAQ:TSLA)’s ability to drive demand and maintain margins above 20% is a positive factor for the company’s short and long-term prospects. The analyst is also cautious about the sustainability of competitor’s price cuts in light of declining profit margins.

According to Insider Monkey’s data, 88 hedge funds were bullish on Tesla, Inc. (NASDAQ:TSLA) at the end of the third quarter of 2022, compared to 73 funds in the prior quarter. Philippe Laffont’s Coatue Management is a significant position holder in the company, with 3.5 million shares worth $940.5 million. 

Alger Capital made the following comment about Tesla, Inc. (NASDAQ:TSLA) in its Q4 2022 investor letter:

“Tesla, Inc. (NASDAQ:TSLA) is an electric vehicle manufacturer with a significant technological lead in its large and rapidly growing addressable market. Shares underperformed during the quarter as it confronted transportation capacity issues that caused deliveries to fall short of estimates, as well as developing demand softness. Moreover, the demand softness became evident in increased Model 3 and Y discounts, the introduction of supercharging credits, some consumers deferring purchases until the Inflation Reduction Act EV purchase incentives become effective in January 2023, and other consumers who may be influenced by higher financing rates or deterred from initiating a high-ticket purchase. Despite these near-term difficulties, we remain constructive on EV innovation, adoption, and Tesla’s growth prospects over the long-term.”

1. Meta Platforms, Inc. (NASDAQ:META)

Average 3-month Volume as of February 6: 36.88 million

YTD Share Price Gains as of February 6: 49.88%

Number of Hedge Fund Holders: 177

Meta Platforms, Inc. (NASDAQ:META) is one of the hottest stocks to invest in. On February 2, Meta Platforms, Inc. (NASDAQ:META) saw a 22% increase in its stock price after the release of better-than-expected fourth-quarter results and positive guidance. The company is close to reaching a $500 billion market capitalization. Meta expects first quarter 2023 total revenue to be in the range of $26 billion to 28.5 billion, versus a $27.25 billion consensus. 

On February 2, Deutsche Bank analyst Benjamin Black raised the firm’s price target on Meta Platforms, Inc. (NASDAQ:META) to $200 from $125 and maintained a Buy rating on the shares. The analyst believes that the company’s fourth quarter results show that its challenges are temporary and that its investments in privacy preserving solutions and growing on-platform signals, combined with increased Reels monetization, will help overcome these challenges in the long run.

According to Insider Monkey’s third quarter database, 177 hedge funds were long Meta Platforms, Inc. (NASDAQ:META), compared to 185 funds in the last quarter. Ken Fisher’s Fisher Asset Management is the leading position holder in the company, with 11.8 million shares worth $1.60 billion. 

Giverny Capital made the following comment about Meta Platforms, Inc. (NASDAQ:META) in its Q4 2022 investor letter:

“Even if sector weightings explain most of our underperformance, I made some dubious decisions during the year. Most notably, I added to our holding in Meta Platforms, Inc. (NASDAQ:META), which declined 64% for the year. Meta began the year as a 4.3% weighting and ended as a 2.5% weighting, despite our incremental purchases.

I got plenty wrong about Meta, including the magnitude of the impact that Apple’s changes to privacy tracking would have on Meta’s value to advertisers. Meta’s two giant social media platforms, Facebook and Instagram, arguably may be weaker businesses than they were a year ago, thanks to Apple and the rising popularity of TikTok. Nevertheless, Meta remains an enormously profitable enterprise, with firehose levels of cash flow. It may be squandering some of that cash flow trying to develop the metaverse, but expense control problems are easier to address than a lack of cash flow. Belatedly, CEO Mark Zuckerberg seems to have recognized the need to match expense growth a little more closely to revenue growth. I never want to see anyone lose their job, but Meta hired many thousands of people to support growth that may not materialize. When Meta announced layoffs late in 2022, the stock began to recover.

To repeat what I wrote to you last quarter, aside from Meta, I don’t see any of our bottom five performers losing market share or competitive position.”

Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily enewsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also check out Dividend Challengers List Ranked By Yield and 16 Largest Photography Companies in the World.