In this article, we discuss 5 best NASDAQ stocks to buy now. If you want to see more best NASDAQ stocks to buy, the risk/reward, and methodology of this list, go directly to 15 Best NASDAQ Stocks to Buy Now.
5. CSX Corporation (NASDAQ:CSX)
Number of Hedge Fund Holders: 61
CSX Corporation (NASDAQ:CSX) is one of the leading railroads in America. Given the railroad industry is an oligopoly, CSX Corporation (NASDAQ:CSX) has substantial pricing power and a wide moat that allows it to earn fairly attractive margins.
With a forward P/E of 16.41, CSX Corporation (NASDAQ:CSX) is arguably undervalued given its business quality and normalized earnings potential in the long term.
4. PepsiCo, Inc. (NASDAQ:PEP)
Number of Hedge Fund Holders: 72
Beverage and snack maker PepsiCo, Inc. (NASDAQ:PEP) shares are near an all time high despite the broader market weakness. In Q3, the company’s net sales grew 8.8% year over year and its organic revenue surged 16% year over year. For full year, PepsiCo, Inc. (NASDAQ:PEP) expects core constant currency earnings per share to rise 10% year over year, up from the previous estimate of 8% year over year growth.
72 hedge funds in our database owned shares of PepsiCo, Inc. (NASDAQ:PEP) at the end of Q3, ranking the stock #4 on our list of 15 Best NASDAQ Stocks to Buy Now.
3. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 177
While its shares have declined substantially this year, Meta Platforms, Inc. (NASDAQ:META) is still a quality stock given its normalized earnings power. In terms of its earnings potential, analysts estimate Meta Platforms, Inc. (NASDAQ:META) will earn $9.10 per share in 2022, $8.15 per share in 2023, and $10.34 per share in 2024.
ClearBridge Investments commented on Meta Platforms, Inc. (NASDAQ:META) in a Q3 2022 investor letter,
We initiated a new position in Meta Platforms, Inc. (NASDAQ:META), in the communication services sector, which operates the Facebook and Instagram social media platforms and is a leading digital advertising provider. We have been carefully watching the company over the last few quarters and believe headwinds from lower monetizing in Facebook and Instagram Reels and pressures from consumer privacy measures are poised to lessen. We believe the company has begun to fully acclimate to this new environment, will achieve greater effectiveness in Reels monetization and find ways to adapt to new privacy standards which will rebound advertising efficiency. Combined with a greater focus on cost control, we believe these initiatives will help contribute to further margin expansion and leave the company well-positioned moving forward.
2. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 269
Amazon.com, Inc. (NASDAQ:AMZN) is a quality stock given its leading cloud business, Amazon Web Services, is growing rapidly. If AI applications increase in the future, demand for cloud processing could also increase, meaning potentially even more growth for Amazon.com, Inc. (NASDAQ:AMZN).
Although inflation has been a headwind for Amazon.com, Inc. (NASDAQ:AMZN)’s retail business’ growth, the company nevertheless has long term upside if it maintains its market share in cloud computing and e-commerce.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 269
Microsoft Corporation (NASDAQ:MSFT) ranks #1 on our list of 15 Best NASDAQ Stocks to Buy Now given 269 hedge funds in our database owned shares of the software giant at the end of Q3. With the success of OpenAI’s ChatGPT, there could be more demand for Microsoft Corporation (NASDAQ:MSFT)’s cloud computing division Azure, which helps provide processing power for the application.
Baron Funds commented on Microsoft Corporation (NASDAQ:MSFT) in a Q3 2022 investor letter,
Shares of Microsoft Corporation (NASDAQ:MSFT) pulled back with the overall software industry on the back of macroeconomic issues, including inflation concerns and rising interest rates. The company reported another strong quarter, highlighted by total revenues growing 16% on a constant currency basis and Microsoft Cloud revenues, now 48% of total sales, growing 33%, with Azure (Microsoft’s infrastructure cloud) growing 46%. These results were driven by strong demand for large commercial cloud contracts, as more businesses are standardizing on Microsoft’s platform and the company is signing larger and longer deals. Initial fiscal year 2023 guidance calls for healthy double-digit revenue and operating income growth. Both foreign exchange and personal computer headwinds were contemplated in the guidance and have continued to worsen, but we have conviction in the company’s strong competitive positioning, durable growth drivers, and margin expansion opportunity over the mid- to long term.
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