5 Best Stocks To Buy For The Next 3 Months

In this article, we discuss 5 best stocks to buy for the next three months. If you want to see more stocks in this selection, check out 10 Best Stocks To Buy For The Next 3 Months. 

5. Alphabet Inc. (NASDAQ:GOOG)

Number of Hedge Fund Holders: 152

Alphabet Inc. (NASDAQ:GOOG) posted a Q4 GAAP EPS of $1.05 and a revenue of $76.05 billion, falling short of Wall Street estimates by $0.14 and $440 million, respectively. While the revenue missed market consensus, revenue for Google Search, YouTube Ads, Google Network, Google Advertising, Google Services, and Google Cloud all exceeded Q3 figures. 

According to Wells Fargo analyst Brian Fitzgerald, despite the underwhelming rollout of Bard, the hype cycle for Generation AI (Gen AI) presents an opportunity for Alphabet Inc. (NASDAQ:GOOG). This is because there is a potential for Gen AI deployment without disrupting search monetization, and Alphabet Inc. (NASDAQ:GOOG) has a leading position in conversational AI technology. Additionally, there is a misapprehension about the drivers of search share. The analyst reiterated an Overweight rating on Alphabet’s shares on February 9, with a price target of $150.

According to Insider Monkey’s Q4 data, 152 hedge funds were long Alphabet Inc. (NASDAQ:GOOG), compared to 156 funds in the prior quarter. Chris Hohn’s TCI Fund Management is the biggest stakeholder of the company, with 54.5 million shares worth $4.8 billion. 

Diamond Hill Large Cap Strategy made the following comment about Alphabet Inc. (NASDAQ:GOOG) in its Q4 2022 investor letter:

“Other bottom contributors included media and technology giant Alphabet Inc. (NASDAQ:GOOG), apparel and footwear company V.F. Corporation and utility operator Dominion Energy. We believe Alphabet’s shares underperformed on concerns of a weakening macroeconomic environment. The company also reported weaker-than-expected earnings and revenue for Q3 2022. Longer-term, we expect Alphabet’s search engine advertising, YouTube advertising and other initiatives to continue driving revenue growth. As such, we used the share price weakness this quarter to add to our position.”

4. Visa Inc. (NYSE:V)

Number of Hedge Fund Holders: 177

Visa Inc. (NYSE:V), an American multinational financial technology giant, is one of the best stocks to buy according to elite hedge funds. On January 26, Visa Inc. (NYSE:V) reported a FQ1 non-GAAP EPS of $2.18, beating market estimates by $0.17. The revenue of $7.9 billion climbed 11.9% year-over-year, outperforming Street forecasts by $200 million. Visa Inc. (NYSE:V) is also set to pay a $0.45 per share quarterly dividend on March 1, to shareholders of record as of February 10. 

On January 29, Barclays analyst Ramsey El-Assal raised the firm’s price target on Visa Inc. (NYSE:V) to $270 from $266 and maintained an Overweight rating on the shares. The updated target is based on management’s revised Q2 guidance and an unchanged fiscal 2023 outlook, according to the analyst’s note to investors.

Among the hedge funds tracked by Insider Monkey, Visa Inc. (NYSE:V) was part of 177 public stock portfolios at the end of Q4 2022, compared to 165 in the earlier quarter. Warren Buffett’s Berkshire Hathaway is a prominent stakeholder of the company, with 8.2 million shares worth $1.7 billion. 

Baron FinTech Fund made the following comment about Visa Inc. (NYSE:V) in its Q4 2022 investor letter:

“Shares of global payment network Visa Inc. (NYSE:V) increased after reporting strong quarterly results, with 19% growth in revenue and EPS despite currency headwinds and the suspension of operations in Russia. Payment volume grew 16% in local currency (excluding Russia and China) with notable strength in cross-border volumes driven by rebounding international travel. Management also provided encouraging guidance for the next fiscal year. We continue to own the stock due to Visa’s long runway for growth and significant competitive advantages.”

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

Number of Hedge Fund Holders: 194

Meta Platforms, Inc. (NASDAQ:META) reported its December quarter results on February 1. The company announced Q4 GAAP earnings per share of $1.76, missing Wall Street estimates by $0.48. Revenue for the period came in at $32.17 billion, outperforming market consensus by $480 million. Meta Platforms, Inc. (NASDAQ:META) expects first quarter 2023 total revenue to be in the range of $26 billion to 28.5 billion, compared to a $27.25 billion consensus. It is one of the best stocks to invest in according to smart investors. 

After Meta Platforms, Inc. (NASDAQ:META) announced on February 19 that it is testing a new subscription service on Facebook and Instagram, Meta Verified, BofA said the firm is “intrigued by this offering” and sees a 12 million potential subscriber opportunity by the end of 2023 to early 2024. Though the firm noted some potential audience size limitations, it believes Meta Platforms, Inc. (NASDAQ:META) could outperform the subscriber ramp as a percent of users of peer subscription offerings given a broader audience reach and bigger revenue opportunity for creators. Noting that Meta Platforms, Inc. (NASDAQ:META) “continues to take more aggressive action to grow earnings in the year of efficiencies,” BofA maintained a Buy rating and $220 price target on Meta shares on February 21. 

According to Insider Monkey’s fourth quarter database, 194 hedge funds were long Meta Platforms, Inc. (NASDAQ:META), compared to 177 funds in the preceding quarter. Boykin Curry’s Eagle Capital Management is a significant position holder in the company, with 9.11 million shares worth over $1 billion. 

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

“During the quarter we sold Meta Platforms, Inc. (NASDAQ:META) after owning the business for over four years. The fundamentals of our investment case were based on the tremendous number of users that spent time on its various properties and the advertising dollars that flowed to the company as a result. We believed its competitive advantage was that the platform was, more or less, a monopoly on people’s time and attention. The rise of TikTok and other emerging platforms has given us pause on the company’s ability to maximize that advantage. From our perspective, the idea of “one platform to rule them all” may now be a thing of the past as social offerings have become more fragmented.

In addition, though our research has indicated that much of the initial damage done from Apple’s iOS 14.5 privacy changes has been repaired, we remain concerned with Apple’s influence over the digital advertising ecosystem. Apple is one of the largest gatekeepers to Meta’s mobile services, and it has become more difficult for us to gauge the pace of change emerging from Apple relating to privacy, as well as evaluating Apple’s ambitions in advertising…” (Click here to read the full text)

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

Number of Hedge Fund Holders: 240

In July 2022, Amazon.com, Inc. (NASDAQ:AMZN) agreed to acquire One Medical (NASDAQ:ONEM), a primary care platform that operates on a membership basis, for $18 per share. On February 22, Amazon.com, Inc. (NASDAQ:AMZN) completed the acquisition for a total cost of $3.9 billion. The company’s Q4 2022 revenue of $149.2 billion climbed 8.6% year-over-year, topping Wall Street estimates by $3.43 billion.

On February 14, Loop Capital analyst, Rob Sanderson, reiterated a Buy rating and a $140 price target on Amazon.com, Inc. (NASDAQ:AMZN), following its Q4 results earlier this month. 

According to Insider Monkey’s fourth quarter database, 240 hedge funds held stakes in Amazon.com, Inc. (NASDAQ:AMZN), compared to 269 funds in the earlier quarter. Harris Associates is a prominent stakeholder of the company, with 19.3 million shares worth $1.6 billion. 

Diamond Hill Large Cap Strategy made the following comment about Amazon.com, Inc. (NASDAQ:AMZN) in its Q4 2022 investor letter:

“At Amazon.com, Inc. (NASDAQ:AMZN), recessionary and inflationary headwinds drove weaker demand and higher costs for its AWS (Amazon Web Services) and retail businesses. While over investment in the retail business during the pandemic and continued growth of investments in AWS could lead to near-term pressure on profitability, we believe Amazon’s competitive advantages will continue to grow and that the business has the potential to grow much faster than the overall economy in the coming years.”

1. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 259

Microsoft Corporation (NASDAQ:MSFT) announced on February 22 that it has released new applications for its Bing search engine and Edge web browser, which are powered by artificial intelligence, for both iOS and Android devices. The new apps include features that are powered by ChatGPT. Additionally, Microsoft Corporation (NASDAQ:MSFT) has stated that its Skype app will receive an AI-powered chat experience. Earlier this month, Microsoft Corporation (NASDAQ:MSFT) began rolling out ChatGPT functionality to users of its Bing search engine on desktop computers.

On February 13, Morgan Stanley analyst Keith Weiss forecasted that Microsoft Corporation (NASDAQ:MSFT)’s EPS growth will accelerate in each of the next five quarters, starting from the Q2 low point. The analyst attributed this projection to several factors, including easier comparisons, price increases, a decrease in foreign exchange headwinds, and a slowdown in operating expenses. According to Morgan Stanley, refining its cloud and overall gross margin models at the end of Q2 makes achieving the Q3 target seem possible. Morgan Stanley maintained its Overweight rating and a $307 price target on Microsoft. The firm also noted that it sees more positive aspects of the company than just its artificial intelligence capabilities.

According to Insider Monkey’s Q4 data, 259 hedge funds were bullish on Microsoft Corporation (NASDAQ:MSFT), compared to 269 funds in the prior quarter. Bill & Melinda Gates Foundation Trust is the biggest stakeholder of the company, with 39.2 million shares worth $9.4 billion. 

Polen Global Growth Strategy made the following comment about Microsoft Corporation (NASDAQ:MSFT) in its Q4 2022 investor letter:

“In the case of Microsoft Corporation (NASDAQ:MSFT), the company is performing very well. Azure now represents nearly 25% of the total business and continues to compound at a higher rate. Although growth is moderating a bit recently (as it is for AWS and Google Cloud Platform as well), these three platforms collectively generated more than $140 billion in revenue during the last 12 months and are still growing at a healthy rate. Further, Microsoft Cloud, or commercial cloud (which includes Azure and other cloud services, Office 365 Commercial, the commercial portion of LinkedIn, Dynamics 365, and other cloud properties) continues to grow roughly 30% and is now about half the business. Mathematically, commercial cloud could decelerate to 20% growth with all other segments decelerating to zero growth and total company revenue growth would still be at least double digits. We believe Microsoft is positioned to compound underlying earnings per share at a mid teens rate over the next five years. At 22x earnings, we felt the valuation was attractive and that it should be a large 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 11 High Growth Energy Stocks to Buy and 12 High Growth Financial Stocks to Buy.