5 Best NASDAQ Stocks To Buy In 2024

In this article, we discuss 5 best NASDAQ stocks to buy in 2024. If you want to read our discussion on the stock market and NASDAQ’s performance, head directly to 12 Best NASDAQ Stocks To Buy In 2024. 

5. NVIDIA Corporation (NASDAQ:NVDA)

Number of Hedge Fund Holders: 180

NVIDIA Corporation (NASDAQ:NVDA) is a global provider of graphics, compute, and networking solutions. It is one of the best NASDAQ stocks to buy. On February 9, NVIDIA Corporation (NASDAQ:NVDA) reported that it is establishing a new division dedicated to creating tailored chips for cloud computing firms and other entities, specifically focusing on advanced AI processors. In the expanding generative AI field, companies such as OpenAI, Microsoft, Alphabet, and Meta Platforms are all vying to leverage Nvidia chips to stay competitive.

According to Insider Monkey’s third quarter database, 180 hedge funds were bullish on NVIDIA Corporation (NASDAQ:NVDA), compared to 175 funds in the prior quarter. Rajiv Jain’s GQG Partners is the largest stakeholder of the company, with 14 million shares worth $6.10 billion. 

Polen Focus Growth Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its fourth quarter 2023 investor letter:

“Apple and NVIDIA Corporation (NASDAQ:NVDA) alone drove over 1,100 basis points of the Russell 1000 Growth Index’s 42% return, so not owning them was a meaningful headwind to our relative return in 2023. NVIDIA shares rocketed higher by well over 200% in 2023 although they slightly underperformed our Portfolio and the Russell 1000 Growth in the fourth quarter. Generative AI has been a huge boon for NVIDIA as the use of LLMs like ChatGPT and others requires tremendous processing power that, today, is mostly provided by NVIDIA’s GPUs. All large cloud service providers, AI factories, and many large consumer internet companies are laying the foundation for generative AI by deploying NVIDIA GPUs and other parallel processing chips to be able to do large scale generative AI either for internal use (i.e., Meta) or as a service for others (i.e., AI factories) or both (cloud service providers such as Amazon, Microsoft, and Google).

Given many of NVIDIA’s customers or its end customers are still very much in the experimentation phase with generative AI, it is unclear how sustainable the current demand for GPUs truly is. At the same time, it is known that NVIDIA has historically been highly cyclical. By the end of 2024, we believe NVIDIA will already account for roughly half the market for datacenter chips, servers, and networking equipment, which is unprecedented. Even though the valuation at 25x forward earnings doesn’t look very demanding at first glance, it assumes NVIDIA will own virtually the entire datacenter chip market in just the next few years and will sustain year-on-year growth despite being a cyclical business that is currently experiencing much higher new peaks.

We believe NVIDIA is a highly advantaged business, but we also believe the long-term growth outcomes are currently too variable, and the expectations built into the company’s $1.2 trillion valuation as of this writing assume the most optimistic of those scenarios.”

4. Alphabet Inc. (NASDAQ:GOOGL)

Number of Hedge Fund Holders: 221

Alphabet Inc. (NASDAQ:GOOGL) is one of the top NASDAQ stocks to invest in. These CLASS A shares are accompanied by voting rights, allowing shareholders to have a say in corporate decisions during shareholder meetings. Class A shares typically have one vote per share. According to Insider Monkey’s third quarter database, 221 hedge funds were bullish on Alphabet Inc. (NASDAQ:GOOGL), compared to 204 funds in the prior quarter. 

Madison Sustainable Equity Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its fourth quarter 2023 investor letter:

“Alphabet Inc. (NASDAQ:GOOG) was positive during the quarter but had a more modest gain in the fourth quarter following a strong third quarter and as a result, lagged the Technology sector more broadly. Alphabet’s third quarter included solid Search and YouTube results while Cloud growth was a bit softer, growing at 22% year-over-year. Google continues to incorporate AI in its core search businesses. It has been rolled out to a wide number of users across multiple geographies. We will continue to watch how Google adapts AI in its businesses and monitor cloud growth.”

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

Number of Hedge Fund Holders: 234

Meta Platforms, Inc. (NASDAQ:META) ranks 3rd on our list of the best NASDAQ stocks in 2024. On February 1, Meta Platforms, Inc. (NASDAQ:META) reported a Q4 GAAP EPS of $5.33, exceeding Wall Street estimates by $0.39. In the fourth quarter of 2023, revenue amounted to $40.11 billion, marking a 25% year-over-year increase. For the full year 2023, the revenue reached $134.90 billion, reflecting a 16% year-over-year growth. Additionally, Meta’s board of directors announced a cash dividend of $0.50 per share. This dividend is set to be paid on March 26, to shareholders of record as of February 22.

According to Insider Monkey’s third quarter database, Chase Coleman’s Tiger Global Management is a notable position holder in the company, with 8.9 million shares worth $2.6 billion. Overall, 234 hedge funds were bullish on the stock.

The FPA Crescent Fund stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its fourth quarter 2023 investor letter:

“Meta Platforms, Inc. (NASDAQ:META) saw a welcome recovery in engagement and revenue year-to-date following a tough 2022. The company has continued to offer new solutions that allow advertisers to target customers effectively and efficiently via one of the world’s leading digital platforms. Moreover, operating profits are rising due to an organization-wide focus on improving productivity and accelerating the time to market for new products. However, overall profitability continues to be weighed down by losses in the Reality Labs segment. But, there is a positive optionality that Meta will emerge from the AI arms race as one of the leading players in the industry.”

2. Amazon.com, Inc. (NASDAQ:AMZN)

Number of Hedge Fund Holders: 286

Amazon.com, Inc. (NASDAQ:AMZN) is one of the best NASDAQ stocks to watch. On February 2, Piper Sandler analyst Thomas Champion observed that there was an acceleration in Amazon.com, Inc. (NASDAQ:AMZN)’s larger new deals, and the management remains optimistic about offering a variety of AI model options to customers. Champion, who has an Overweight rating on Amazon shares, set a $220 price target.

According to Insider Monkey’s third quarter database, 286 hedge funds reported owning stakes in Amazon.com, Inc. (NASDAQ:AMZN), compared to 278 funds in the last quarter. Ken Fisher’s Fisher Asset Management is the leading stakeholder of the company, with a position worth $5.25 billion. 

Polen Focus Growth Strategy stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its fourth quarter 2023 investor letter:

“For the full year, the top relative and absolute contributors were Amazon.com, Inc. (NASDAQ:AMZN), Salesforce, and ServiceNow. Amazon shares appreciated 88% in 2023, driven primarily by rapidly expanding operating profit margins and free cash flow growth. After the pandemic, Amazon experienced a period of inefficiency and over investment in its distribution and logistics infrastructure. Amazon is now leveraging these investments as growth returned to its e-commerce business in 2023 after a highly unusual 2022. At the same time, Amazon’s rapidly growing and high-margin advertising business is contributing strongly to the entire company’s operating profit growth. The AWS (Amazon Web Services) cloud infrastructure and services business continued to slow in 2023 as customers anticipating a more difficult economic environment looked to save money on their cloud spend, but these cloud spending optimizations began to stabilize in the second half of 2023. We now expect customer interest in generative AI will begin to contribute to growth.”

1. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 306

Microsoft Corporation (NASDAQ:MSFT) ranks 1st on our list of the best NASDAQ stocks to buy in 2024. On January 30, Microsoft Corporation (NASDAQ:MSFT) announced financial results for the quarter ended December 31, 2023. The company reported GAAP EPS of $2.93 and a revenue of $62.02 billion, outperforming Wall Street estimates by $0.16 and $890 million, respectively. Microsoft is set to pay a $0.75 per share quarterly dividend on March 14, to shareholders of record on February 15. 

According to Insider Monkey’s third quarter database, 306 hedge funds were bullish on Microsoft Corporation (NASDAQ:MSFT), compared to 300 funds in the last quarter. Bill & Melinda Gates Foundation Trust is the largest stakeholder of the company, with 39.2 million shares worth $12.4 billion. 

Madison Sustainable Equity Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its fourth quarter 2023 investor letter:

“Microsoft Corporation’s (NASDAQ:MSFT) sustainable scorecard was updated with an unchanged rating of Above Average. The company’s board has an official Environmental, Social, and Public Policy Committee in addition to the traditional Audit, Compensation, and Governance committees. For ten years, Microsoft has publicly released data measuring the diversity of its workforce. With the prominence of Artificial Intelligence (AI), the company has launched a 5-point blueprint for governing AI to address public policy and regulation. Environmentally, Microsoft has multiple programs to be carbon negative by 2030. The company has signed Purchase Power Agreements for carbon-free energy totaling 13.5 Gigawatts.”

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 13 Best Big Company Stocks to Buy and 20 Best Ways to Generate Passive Income for Beginners.