In this article, we will take a look at the 5 best investments for beginners. To see more such companies, go directly to 11 Best Investments for Beginners.
5. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 175
NVIDIA Corporation (NASDAQ:NVDA) hardly needs any mention of growth catalysts that are expected to boost the stock price in the coming months and years. NVIDIA Corporation (NASDAQ:NVDA) has become a symbol of the AI boom that is just getting started.
As of the end of the second quarter 175 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in NVIDIA Corporation (NASDAQ:NVDA).
According to Yahoo Finance data, NVIDIA Corporation (NASDAQ:NVDA)’s one-year average price estimate is $584, which shows huge upside potential from the current levels.
Harding Loevner Global Equity Strategy made the following comment about NVIDIA Corporation (NASDAQ:NVDA) in its Q2 2023 investor letter:
NVIDIA Corporation (NASDAQ:NVDA) has been the biggest beneficiary this year in terms of its stock run and projected revenue gains. More companies- including, perhaps, some not yet in existence-will certainly join the ranks over time.
In the meantime, NVIDIA has emerged as the unrivaled global leader in providing the technologies at the center of the Al arms race. NVIDIA’s competitive advantage is the result of investments that began two decades ago, when it recognized an early opportunity to repurpose its video-game graphics chips for the heavy-load computing done in scientific research. This led management to expand the GPU business. It also spent years and significant resources developing a free software platform that’s exclusive to its chips called CUDA that allows developers to easily program its GPUs for a variety of computationally intensive applications. Researchers then began using both NVIDIA’s chips and CUDA to train the human-brain-inspired neural networks that power Al models.
Now, due to an explosion of demand related to generative Al and LLMs from across its customer base, NVIDIA projects that data-center revenue for its fiscal second quarter ending in July will surge to US$11 billion. Not only is that more than double last quarter’s total, but the forecast also shattered the average analyst estimate that called for about US$7 billion. Taking advantage of the stock’s meteoric rise, we reduced our holding (it has risen tenfold since we first purchased in 2018)…” (Click here to read the full text)
4. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 204
Search. Cloud. AI. Autonomous cars. Healthcare ventures. Smartphone software. Apps. These are just some of the catalysts that are expected to keep boosting Alphabet Inc. (NASDAQ:GOOGL) stock price in the months and years to come.
In August, BofA increased its price target on Alphabet Inc. (NASDAQ:GOOGL) to $146 from $142 and kept a Buy rating on the stock. At its Cloud Next event Alphabet highlighted its AI/ML capabilities, partnerships with NVIDIA Corporation (NASDAQ:NVDA), SAP SE (NYSE:SAP) and Workday Inc. (NYSE:WDAY), among other projects.
A total of 204 hedge funds tracked by Insider Monkey had stakes in Alphabet Inc. (NASDAQ:GOOGL) as of the end of the second quarter.
Artisan Global Value Fund made the following comment about Alphabet Inc. (NASDAQ:GOOG) in its Q2 2023 investor letter:
“Our best performing stocks this quarter were Meta, Alphabet Inc. (NASDAQ:GOOG) and Heidelberg Materials. The rise in Alphabet’s share performance was primarily driven by the AI frenzy. Earlier this year, there were some doubts about Alphabet’s ability to compete with OpenAI’s ChatGPT product. This was a bit ironic since Alphabet has been using AI technology to improve its Google search results and advertising business for years. Indeed, the technology that underpins OpenAI’s ChatGPT actually came from Alphabet more than five years ago. But sometimes the market needs a reminder, and Alphabet provided tangible evidence of its capabilities. At a recent developer conference, it launched Bard, a consumer-oriented generative AI version of its search engine, as well as several other concrete examples of how AI could improve its current business. As with Meta, the long-term implications of AI on Alphabet’s business model are still far from certain. But we do believe that it is a technology leader in this field and will participate in whatever direction the technology develops.”
3. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 225
Meta Platforms, Inc. (NASDAQ:META) is a safe investment in the stock market for beginners since the social media giant has several upcoming growth catalysts, including AI. Morgan Stanley said Meta Platforms, Inc. (NASDAQ:META) could generate as much as $20 per share in earnings by 2024, driven by Reels, Click to Message and the company’s “core” ads business.
Morgan Stanley analyst Brian Nowak set a $375 price target on Meta Platforms, Inc. (NASDAQ:META).
Artisan Global Value Fund made the following comment about Meta Platforms, Inc. (NASDAQ:META) in its Q2 2023 investor letter:
“Our best performing stocks this quarter were Meta Platforms, Inc. (NASDAQ:META), Alphabet and Heidelberg Materials. Meta was the largest contributor to performance. Its shares have almost fully recovered from last year’s declines, rising 35% during the quarter and 138% YTD. During the quarter, the company reported earnings that showed a return to growth and healthy user engagement metrics. Most importantly, profitability appears to have stabilized and is poised to improve as significant cost reduction actions implemented over the past six months begin to have an impact. Separate from fundamental performance, there is excitement over AI’s potential to help the company’s business. While Meta’s technology prowess and massively scaled media platform certainly position the company to take advantage of AI, we believe it’s far too early to estimate any discrete tangible benefits. Overall, we view AI as one of several drivers that will contribute to Meta’s continued growth.”
2. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 278
Ecommerce giant Amazon.com, Inc. (NASDAQ:AMZN) ranks 2nd in our list of the best investments for beginners in the stock market. Recently, reports emerged that the FTC was preparing to file a lawsuit against Amazon.com, Inc. (NASDAQ:AMZN). But Wedbush’s analyst Scott Devitt sees that as a potential buying opportunity.
“There is evidence that U.S. retail continues to function as a highly competitive market both online and offline despite Amazon’s success. We would be buyers of Amazon shares on any weakness related to the headlines of an FTC case,” Devitt said.
A total of 278 hedge funds tracked by Insider Monkey had stakes in Amazon.com, Inc. (NASDAQ:AMZN), according to Insider Monkey’s proprietary database of hedge funds.
Diamond Hill Large Cap Strategy made the following comment about Amazon.com, Inc. (NASDAQ:AMZN) in its Q2 2023 investor letter:
“Among our top contributors were insurance company American International Group (AIG), auto retailer CarMax and global online retailer Amazon.com, Inc. (NASDAQ:AMZN).
Amazon’s management team has been working to improve retail profitability, and Q1 results showed progress. In the case of Amazon’s web services (AWS), the market has shifted its focus from where growth will bottom in the near term to how AI can help accelerate the adoption of public cloud services in the future. We believe Amazon’s competitive advantages will continue to grow and that the business has the potential to grow faster than the overall economy in the coming years.”
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 300
Microsoft Corporation (NASDAQ:MSFT) is perhaps the most sough-after investment in the stock market purported by Wall Street analysts these days amid the company’s clear growth catalysts on the back of AI. Goldman Sachs recently reiterated its Buy rating on Microsoft Corporation (NASDAQ:MSFT) with a $400 price target following the company’s Envision conference. Microsoft Corporation (NASDAQ:MSFT) said it left the conference with clarity that Microsoft has a rich product line in the AI, and especially praised the company’s Microsoft 365 Copilot and Fabric which are expected to go live by the end of year.
As of the end of the second quarter of 2023, 300 hedge funds tracked by Insider Monkey had stakes in Microsoft Corporation (NASDAQ:MSFT).
Harding Loevner Global Equity Strategy made the following comment about Microsoft Corporation (NASDAQ:MSFT) in its Q2 2023 investor letter:
“Most notably, Microsoft Corporation (NASDAQ:MSFT) was able to gain an immediate leadership position in generative Al by making a US$10 billion investment in OpenAI, the company behind ChatGPT, earlier this year. Microsoft’s Bing search engine has since introduced ChatGPT into its web index data-a collection so large that it is rivaled by the dataset of only one other business in the world, Alphabet’s Google. Data are the feedstock of Al models, and an Al-enhanced search engine trained on so much data may attract more users to Bing, allowing Microsoft to sell more ads on the service. Microsoft is also adding generative Al to other products, including the Azure cloud service, enabling business customers who use Azure to easily integrate OpenAl models to glean more insights from their data and automate functions such as certain IT tasks. These added capabilities should motivate more businesses to migrate their data to the cloud and make Azure more competitive with Amazon.com’s AWS and Google Cloud.”
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