In this article, we discuss 5 best Vanguard stocks to buy now. If you want to see more of the top Vanguard holdings, click 11 Best Vanguard Stocks to Buy Now.
5. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 158
Percentage of Vanguard’s Stake: 4.17%
Alphabet Inc. (NASDAQ:GOOG) is an American multinational technology conglomerate that specializes in artificial intelligence, automation, autonomous cars, biotechnology, cloud computing, computer hardware, corporate venture capital, robotics, and software via its subsidiaries. Vanguard owned over 12.5 million shares of Alphabet Inc. (NASDAQ:GOOG) Class A and Class C shares, worth about $35 billion, representing 4.17% of the total portfolio.
On April 26, Alphabet Inc. (NASDAQ:GOOG) reported its Q1 results, announcing earnings per share of $24.62, missing estimates by $0.93. The revenue grew about 23% year-over-year to $68.01 billion, topping market forecasts by $124.63 million.
Guggenheim analyst Michael Morris on April 27 maintained a Buy rating on Alphabet Inc. (NASDAQ:GOOG) but lowered the firm’s price target on the stock to $3,000 from $3,350 after the company’s Q1 revenue growth of 22.8% came in below his consensus estimates. He noted that underperformance across Google Services was partially compensated by modest outperformance in Cloud. He still views Alphabet Inc. (NASDAQ:GOOG) as “a top technology leader”, the analyst told investors.
According to Insider Monkey’s Q4 data, 158 hedge funds were long Alphabet Inc. (NASDAQ:GOOG), up from 156 funds in the last quarter. Chris Hohn’s TCI Fund Management held the biggest stake in the company in the December quarter, with a position worth $8.5 billion.
Here is what Farrer Wealth Advisors has to say about Alphabet Inc. (NASDAQ:GOOG) in its Q1 2022 investor letter:
“Alphabet: We won’t waste much time trying to explain to our clients why Alphabet is such a phenomenal business, we believe that is quite self-evident. The better explanation is why we never bought Alphabet before. The reason was a personal bias we held based on three beliefs (which we now believe to be incorrect)
Growth in YouTube would stall as the increased ad-load would turn-off viewers (the double ad-load at the beginning of videos for example). Consumers will focus on discovery rather than search to purchase new items. For example – using Instagram/TikTok to decide what new clothes to buy instead of ‘googling’ for clothes. Other Bets: In general, we felt that capital spent on “Other Bets” has been a bit wasteful with the segment earning just around $3.1bn in revenue versus nearly $21bn in operating losses over the last five years…” (Click here to see the full text)
4. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 91
Percentage of Vanguard’s Stake: 2.33%
Tesla, Inc. (NASDAQ:TSLA), an American company specializing in electric vehicles, energy generation, and storage, is one of the top holdings of Vanguard S&P 500 ETF. The fund reported owning 18.30 million Tesla, Inc. (NASDAQ:TSLA) shares at the end of March, worth $19.7 billion, representing 2.33% of the total holdings.
On April 20, Tesla, Inc. (NASDAQ:TSLA) reported earnings for the first fiscal quarter of 2022. The company posted an EPS of $3.22, beating market estimates by $0.95. The revenue grew 80.54% from the prior-year quarter to $18.76 billion, outperforming analysts’ predictions by $917.76 million.
Berenberg analyst Adrian Yanoshik initiated coverage of Tesla, Inc. (NASDAQ:TSLA) on May 10 with a Hold rating and a $900 price target. The analyst started seven automakers with a “positive bias”. Despite market concerns about demand, supply chain tightness, and cost inflation, pricing power and “deep” order books can generate free cash flow and finance the transformation of “legacy businesses into the electrified arena”, the analyst told investors.
Among the hedge funds tracked by Insider Monkey, 91 funds were bullish on Tesla, Inc. (NASDAQ:TSLA) at the end of December 2021, compared to 60 funds in the earlier quarter. Cathie Wood’s ARK Investment Management is a significant shareholder of the company, owning about 2 million shares worth $2 billion.
Here is what Fiduciary Management Small Cap Equity has to say about Tesla, Inc. (NASDAQ:TSLA) in its Q1 2022 investor letter:
“Remarkably, the Nasdaq-100 and Russell 2000 indices are up 6.25% and 3.90% through 3/31/22, respectively, since the war started. Tesla, Inc. (NASDAQ:TSLA) went up 57% from its low on February 24 ($700) to the close on March 29th ($1099), which equates to an advance of $413 billion. To put that in perspective, the 24-trading day gain in Tesla was greater than the entire market value of Walmart, Inc.! Tesla trades for 120 times estimated 2022 GAAP2 earnings, compared to Walmart’s (NYSE:WMT) 21.8 multiple (1/2023 fiscal year).”
3. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 279
Percentage of Vanguard’s Stake: 3.69%
Vanguard owns more than 9.5 million shares of Amazon.com, Inc. (NASDAQ:AMZN), worth $31.20 billion, representing 3.69% of the total securities. The tech giant is the third largest holding in Vanguard’s portfolio.
Amazon.com, Inc. (NASDAQ:AMZN) reported Q1 2022 results on April 28, posting a loss per share of $7.56, missing market estimates by $16.05. The revenue grew 7.30% year-over-year to $116.44 billion, but it fell short of analysts’ predictions by $67.09 million.
On May 2, Wedbush removed Amazon.com, Inc. (NASDAQ:AMZN) from its Best Ideas List given its investment price discipline. Analyst Michael Pachter maintained an Outperform rating and a price target of $3,500 on the shares.
According to the fourth quarter database of Insider Monkey, 279 hedge funds were long Amazon.com, Inc. (NASDAQ:AMZN), compared to 242 funds in the preceding quarter. Fisher Asset Management held a notable stake in the company, with 2.16 million shares worth $7.2 billion.
Here is what Oakmark Fund has to say about Amazon.com, Inc. (NASDAQ:AMZN) in its Q1 2022 investor letter:
“Amazon is the leading e-commerce and cloud-computing provider in the world. In e-commerce, two-thirds of U.S. households are Amazon Prime subscribers, and over half of all online product searches now start on Amazon. We believe the company’s strong customer loyalty and massive infrastructure are significant barriers to entry in a growing e-commerce market. Separately, Amazon Web Services (AWS) controls nearly half of the market in cloud computing. We believe AWS has become utility-like in nature and scale, and we expect healthy growth moving forward as IT workloads continue moving to the cloud. More recently, concerns about rising investment spending have weighed on the stock-as they have in times past-providing us another opportunity to purchase shares at an attractive multiple of normalized earnings and a discount to its peer-weighted enterprise value-to-sales multiple.”
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 262
Percentage of Vanguard’s Stake: 5.98%
Microsoft Corporation (NASDAQ:MSFT) is an American firm that is categorized as one of the Big Five US tech giants. Vanguard reported owning about 164 million Microsoft Corporation (NASDAQ:MSFT) shares in the March 2022 quarter, worth $50.5 billion, representing 5.98% of the total holdings.
Microsoft Corporation (NASDAQ:MSFT) reported its financial results for the first fiscal quarter of 2022, posting earnings per share of $2.22, beating estimates by $0.02. The revenue climbed 18.35% year-over-year to $49.36 billion, topping market consensus by $311.18 million.
On April 27, Wedbush analyst Daniel Ives maintained an Outperform rating on Microsoft Corporation (NASDAQ:MSFT) but lowered the firm’s price target on the shares to $340 from $375 to reflect a lower multiple following Q1 results. The analyst noted that Microsoft Corporation (NASDAQ:MSFT) delivered a robust cloud guidance “for the ages” that will pacify investors and was a bullish data point for the company, and importantly the entire tech sector moving forward.
Among the hedge funds tracked by Insider Monkey, 262 funds were long Microsoft Corporation (NASDAQ:MSFT) at the end of Q4 2021, up from 250 funds in the preceding quarter. Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital is a significant shareholder of the company, with a position worth $5.7 billion.
Here is what Baron Opportunity Fund has to say about Microsoft Corporation (NASDAQ:MSFT) in its Q4 2021 investor letter:
“Shares of Microsoft Corporation, a cloud-software leader and provider of software productivity tools and infrastructure, rose during the quarter, following a strong earnings report highlighting solid demand for its broad product stack and continued momentum migrating its business to the cloud. Microsoft’s results continued to be strong across the board, with total revenue growing 20% in constant currency, beating Street estimates by 3%; an acceleration in Commercial Cloud revenue to 34% constant-currency growth; operating margins expanding to just under 45%; earnings growth of 23%; and free cash flow growth of 30%. We believe the company is positioned to deliver 13% to 15% organic growth over the next three years, underpinned by total addressable market expansion and continued market share gains across its disruptive cloud product portfolio.”
1. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 134
Percentage of Vanguard’s Stake: 7.00%
Vanguard’s Apple Inc. (NASDAQ:AAPL) stake consists of more than 339 million shares, worth $59.2 billion, representing 7% of the total holdings. Apple Inc. (NASDAQ:AAPL) is the biggest stock in Vanguard’s Q1 2022 portfolio.
On April 28, Apple Inc. (NASDAQ:AAPL) reported earnings for the first fiscal quarter of 2022, announcing an EPS of $1.52, beating market estimates by $0.09. The Q1 revenue grew 8.59% year-over-year to $97.28 billion, surpassing Street forecasts by $3.29 billion.
Apple Inc. (NASDAQ:AAPL) declared on April 28 a $0.23 per share quarterly dividend, a 4.5% increase from its last dividend of $0.22. The dividend is distributable on May 12, for shareholders of the company as of May 9. Apple Inc. (NASDAQ:AAPL) also authorized an additional $90 billion to its existing share buy back program.
Morgan Stanley analyst Katy Huberty maintained an Overweight rating on Apple Inc. (NASDAQ:AAPL) and a $195 price target on the shares on May 3. The analyst said that based on data from Sensor Tower, she estimates Apple Inc. (NASDAQ:AAPL)’s App Store net revenue growth increased to 8% year-over-year in April, compared to the March quarter growth of 6% year-over-year. The analyst’s June quarter forecast for App Store growth of 15% year-over-year remains unchanged.
According to Insider Monkey’s Q4 data, 134 hedge funds were bullish on Apple Inc. (NASDAQ:AAPL), and Warren Buffett’s Berkshire Hathaway is the biggest shareholder of the company, with a position worth $157.5 billion.
Here is what Berkshire Hathaway has to say about Apple Inc. (NASDAQ:AAPL) in its Q4 2021 investor letter:
“Apple Inc. (NASDAQ:AAPL) – our runner-up Giant as measured by its year end market value – is a different sort of holding. Here, our ownership is a mere 5.55%, up from 5.39% a year earlier. That increase sounds like small potatoes. But consider that each 0.1% of Apple’s 2021 earnings amounted to $100 million. We spent no Berkshire funds to gain our accretion. Apple’s repurchases did the job. It’s important to understand that only dividends from Apple are counted in the GAAP earnings Berkshire reports – and last year, Apple paid us $785 million of those. Yet our “share” of Apple’s earnings amounted to a staggering $5.6 billion. Much of what the company retained was used to repurchase Apple shares, an act we applaud. Tim Cook, Apple’s brilliant CEO, quite properly regards users of Apple products as his first love, but all of his other constituencies benefit from Tim’s managerial touch as well.”
You can also take a look at 10 Dividend Paying Consumer Defensive Stocks and 10 UK Dividend Stocks To Buy.
