5 Best Quality Stocks to Buy Now

In this article, we will take a look at the 5 best quality stocks to buy now. If you want to see more stocks in this selection, go to the 11 Best Quality Stocks to Buy Now.

5. NVIDIA Corporation (NASDAQ:NVDA)

Number of Hedge Fund Holders: 89

NVIDIA Corporation (NASDAQ:NVDA) is a Santa Clara, California-based company that is considered a pioneer in the field of graphic processing units (GPUs).

On November 17, Rajvindra Gill at Needham increased the target price for NVIDIA Corporation (NASDAQ:NVDA) from $155 to $200 and reiterated a Buy rating on the stock. The analyst highlighted that the company’s Q3 2022 results were strong, with the revenue guidance for the data center industry looking slightly higher than anticipated. Despite the macroeconomic challenges, NVIDIA Corporation (NASDAQ:NVDA) is performing well, which makes it one of the best quality stocks to buy now. NVIDIA Corporation (NASDAQ:NVDA) will also be a beneficiary of the new product cycle in the gaming and data center industry, with an expectation of quarter-over-quarter (QoQ) growth in 2023.

Here’s what ClearBridge Investments said about NVIDIA Corporation (NASDAQ:NVDA) in its Q2 2022 investor letter:

“Chipmaker Nvidia (NASDAQ:NVDA) has also been pressured by multiple compression of higher growth companies and weakness in its gaming business. While Nvidia has grown into a top 10 position with its strong performance through late 2021, we have been consistently trimming the position to derisk against short-term volatility in its gaming business. The company is clearly exposed to the semiconductor cycle but also participates in the secular growth of cloud and AI adoption through its data center business. With these secular drivers intact and new products ramping up in the second half of the year, we are maintaining an overweight to the company.”

4. S&P Global Inc. (NYSE:SPGI)

Number of Hedge Fund Holders: 90

S&P Global Inc. (NYSE:SPGI) is a New York-based credit rating agency that is known for publishing research and analysis on bonds, commodities, and stocks.

On November 7, Simon Clinch at Atlantic Equities upgraded S&P Global Inc. (NYSE:SPGI) stock from a Neutral to an Overweight rating. The analyst also increased the target price from $356 to $386 after the company reported strong Q3 2022 results. Clinch pinpointed the improved valuation of the diversified and high-quality business. Furthermore, the aggressive capital return program and self-help opportunities warranted an upgrade for S&P Global Inc. (NYSE:SPGI) stock. Clinch concluded that the stock looks attractive on a risk-adjusted basis compared to its competitors and provides a potential upside opportunity of over 11.1% from the closing price as of November 30. S&P Global Inc. (NYSE:SPGI) is in the final phase of the multiyear restructuring plan that will unlock value for investors.

Baron Funds has a long-term bullish outlook on S&P Global Inc. (NYSE:SPGI) as one of the best quality stocks. Here’s what the firm said about the company:

“Shares of rating agency and data provider S&P Global Inc. (NYSE:SPGI) fell 9% during the third quarter due to continued weak debt issuance activity and headwinds to the Indices business from equity market declines. Credit markets were exceptionally soft during the quarter with non-financial corporate bond issuance down 36% for investment grade and down 84% for high yield, reflecting greater investor risk aversion, rising interest rates, and a drop-off in M&A activity. We believe this ratings weakness is temporary and diversification benefits from the acquisition of IHS Markit should support earnings growth next year. Over the long term, the company should continue benefiting from the secular trends of increasing bond issuance, growth in passive investing, and demand for data and analytics, while enjoying meaningful and durable competitive advantages that, in our view, are only strengthening following the merger with IHS Markit.”

3. Apple Inc. (NASDAQ:AAPL)

Number of Hedge Fund Holders: 140

Apple Inc. (NASDAQ:AAPL) is a Cupertino, California-based technology giant.

Apple Inc. (NASDAQ:AAPL) is considered amongst the best quality stocks as it has performed considerably well as opposed to its mega-cap rivals, which have lost around 30% to 75% this year. In comparison, Apple Inc. (NASDAQ:AAPL) has lost only 16% of its value YTD. In a research note published on November 22, T. Michael Walkley at Canaccord commented that the demand for the premium-priced iPhone 14 Pro and iPhone 14 Pro Max is hovering around elevated levels. However, the production of these models has come under pressure due to the fresh restrictions in China following the COVID-19 outbreak. This will cause a delay in deliveries and push the sales into the March quarter. However, Apple Inc. (NASDAQ:AAPL) is expected to overcome the supply-chain issues in the near future and continue on its growth trajectory. The analyst has given Apple Inc. (NASDAQ:AAPL) stock a Buy rating with a target price of $200.

Here’s what Wedgewood Partners said about Apple Inc. (NASDAQ:AAPL) in its Q3 2022 investor letter:

“Apple Inc. (NASDAQ:AAPL) grew revenues +5% (foreign exchange adjusted and excluding Russia) driven by record iPhone revenues that were up about +3% on an exceptional year ago comparison of +50%. Apple’s installed base is over 1.8 billion devices which helps drive a software and services business that has generated almost $80 billion of revenue over the past 4 quarters. As we have highlighted in the past, Apple’s relentless focus on the development and integration between hardware (especially ICs) as well as software, continues to add significant value for customers of its products and services. We expect this favorable competitive dynamic to continue for the foreseeable future.”

2. Mastercard Incorporated (NYSE:MA)

Number of Hedge Fund Holders: 146

Mastercard Incorporated (NYSE:MA) is a Harrison, New York-based payment processing company that has the distinction of being the second biggest payment processing entity in the world.

In an update issued to investors on October 28, Ashwin Shirvaikar at Citi assigned Mastercard Incorporated (NYSE:MA) a target price of $400 and maintained a Buy rating on the stock. Mastercard Incorporated (NYSE:MA) posted strong Q3 results that outperformed consensus estimates. Furthermore, numerous data points in the results highlighted the resiliency of the average consumer spending pattern. Like other market observers, the analyst was surprised by the company’s “expense guidance” for Q4 2022. However, he thinks that there is still significant upside potential to be offered by Mastercard Incorporated (NYSE:MA) stock.

Baron Funds shared its outlook on one of the best quality stocks in its Q2 2022 investor letter. Here’s what the firm said:

“The Fund’s holdings in the Payments and Information Services themes also contributed to relative performance. Within Payments, lower exposure to this lagging theme and outperformance of Mastercard Incorporated (NYSE:MA) added the most value. These global payment networks are viewed as safe havens during market downturns but are also benefiting from resilient payment volumes and a sharp rebound in international travel.”

Akre Capital Management was the leading hedge fund investor in Mastercard Incorporated (NYSE:MA) during Q3 2022.

1. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 269

Microsoft Corporation (NASDAQ:MSFT) is a Redmond, Washington-based diversified technology company.

The company is betting on the expanding gaming industry through its $68.7 billion acquisition of Activision Blizzard, Inc. (NASDAQ:ATVI) announced in January 2022. The deal is currently in the middle of regulatory approval. Furthermore, Microsoft Corporation (NASDAQ:MSFT) is preparing for the next growth frontier by expanding the footprint of its cloud computing platform Azure. Organizations around the world are adopting cloud computing solutions to avoid high expenditures on IT infrastructure. On November 22, Colin Sebastian at Baird upgraded Microsoft Corporation (NASDAQ:MSFT) stock to an Outperform rating and assigned a target price of $95.

Here’s what Diamond Hill Capital said about Microsoft Corporation (NASDAQ:MSFT) in its Q3 2022 investor letter:

“Also among our bottom contributors were media and technology giant Alphabet, software and IT services provider Microsoft Corporation (NASDAQ:MSFT) and insurance company American International Group (AIG). Microsoft shares declined in Q3, along with other tech companies, as rising interest rates impacted the near-term outlook. We expect the business to continue to generate strong revenue growth and benefit from operating leverage. Microsoft’s cloud computing services business, Azure, is generating robust growth, confirming its competitive positioning.”

Microsoft Corporation (NASDAQ:MSFT) was held by 269 hedge funds as of Q3 2022.

You can also take a peek at the 10 Best Artificial Intelligence Stocks Under $10 and the 10 Best Cryptocurrency Stocks To Invest In.

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