In this article, we discuss 5 best upside stocks to buy right now. If you want to see more best upside stocks to buy right now, the risk/reward, and methodology of this list, go directly to 10 Best Upside Stocks to Buy Right Now.
5. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 89
NVIDIA Corporation (NASDAQ:NVDA) has substantial upside given the potential increase in demand for AI processing. Currently, AI applications like ChatGPT run on the cloud which in turn often uses NVIDIA Corporation (NASDAQ:NVDA) GPUs for some processing.
In the future, if apps like ChatGPT realize more demand, cloud processing demand will increase and demand for NVIDIA Corporation (NASDAQ:NVDA)’s GPUs will likely increase if the company can maintain its market share in the rapidly growing sector.
Baron Funds commented on NVIDIA Corporation (NASDAQ:NVDA) in a Q3 2022 investor letter,
NVIDIA Corporation (NASDAQ:NVDA) is a fabless semiconductor company and a leader in gaming and accelerated computing. NVIDIA is powering the growth of AI from the data center to the edge. Shares detracted due to inventory right sizing in NVIDIA’s gaming segment coupled with the broader market sell-off in growth stocks. Given NVIDIA’s end-to-end AI platform and its leading market share in gaming, data centers, and autonomous machines, along with the size of these markets, we believe the company can sustain its growth trajectory. See further discussion of NVIDIA in the top net purchases section below.
During the third quarter, we took advantage of its stock sell-off to add to NVIDIA Corporation, a fabless semiconductor mega cap that is a global leader in gaming cards and accelerated computing hardware and software. The sell-off was driven by a near-term inventory correction in gaming as a result of a COVID-related pull forward in demand as well as the shift in the Ethereum cryptocurrency from proof-of-work to proof-of-stake. Additionally, investors are concerned over the potential slowdown in data center revenues as a result of a weaker macroeconomic environment as well as the recently announced limitations on semiconductor shipments to China. Despite the near-term uncertainty, we believe that NVIDIA’s end-to-end AI platform and its leading market share in gaming, data centers, and autonomous machines, along with the size of these markets, would enable the company to benefit from durable growth for years to come and therefore view the stock price where we added shares as a compelling value for long-term investors. With demand for computing power doubling every one to two years, and Moore’s Law slowing down, there is more need for computing than ever. At the same time, “near free” supply growth (that was possible thanks to Moore’s Law) has slowed dramatically. NVIDIA’s accelerated architecture, with parallel computing at scale, answers that need.
4. S&P Global Inc. (NYSE:SPGI)
Number of Hedge Fund Holders: 90
S&P Global Inc. (NYSE:SPGI) stock has retreated 28.5% year to date given the decline in many other financial stocks which has decreased the leading credit agency’s relative value. The company also lowered FY22 adjusted EPS to $11-$11.15 from the previous $11.35-$11.55 given the challenging inflation and rising interest rate environment. Nevertheless, S&P Global Inc. (NYSE:SPGI) believes it can achieve annual adjusted EPS growth in the low to mid teens by 2025-2026 which could offer long term upside if the company can achieve it.
90 hedge funds in our database owned shares of S&P Global Inc. (NYSE:SPGI) at the end of Q3, ranking the stock #4 on our list of 10 Best Upside Stocks to Buy Right Now.
3. The Walt Disney Company (NYSE:DIS)
Number of Hedge Fund Holders: 112
The Walt Disney Company (NYSE:DIS) shares have declined nearly 44% year to date given higher than expected costs and weaker demand for the company’s many entertainment assets. If there is a recession next year, demand could continue to be weak.
Nevertheless, The Walt Disney Company (NYSE:DIS) has many quality assets in the long term and analysts expect The Walt Disney Company (NYSE:DIS) to earn $3.78 per share in 2022, $4.17 per share in 2023, $5.33 per share in 2024, and $6.30 per share in 2025. If it can achieve strong EPS growth, there’s potential for long term upside.
2. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 177
Meta Platforms, Inc. (NASDAQ:META) shares have declined over 64% year to date given rising interest rates have caused capital to move from big tech stocks into Treasury bonds. Furthermore, the company’s substantial metaverse spending and competition from TikTok has led to lower future earnings estimates than before.
Nevertheless, Meta Platforms, Inc. (NASDAQ:META) still has upside in the long term if it keeps its user base and the company further monetizes its user base with future AI services. Shares trade for a forward P/E ratio of 15.1, which is fairly attractive for a company with Meta Platforms, Inc. (NASDAQ:META)’s quality businesses and its potential.
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 269
Amazon.com, Inc. (NASDAQ:AMZN) shares have declined over 50% from their peak as high inflation has caused a slowdown in the company’s e-commerce business while weaker than expected demand has led to the company’s cloud business to underperform in the near term.
Nevertheless, Amazon.com, Inc. (NASDAQ:AMZN) has a lot of value given its leading e-commerce market share. If the company uses future technologies such as AI, robots, and drones to significantly reduce costs and shipping times, the company’s e-commerce business could be substantially more profitable than it is today.
If AI demand continues to grow and the company maintains its market share in the cloud, Amazon.com, Inc. (NASDAQ:AMZN) could benefit from more AI cloud demand. Although OpenAI uses Microsoft’s Azure for its cloud processing, future AI companies could potentially use AWS for their processing needs.
269 hedge funds in our database owned shares of Amazon.com, Inc. (NASDAQ:AMZN) at the end of September, ranking the stock #1 on our list of 10 Best Upside Stocks to Buy Right Now.
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