In this article, we will take a look at the 5 stocks with huge catalysts on the way. To see more such companies, go directly to 10 Stocks With Huge Catalysts on the Way.
5. Apple Inc. (NASDAQ:AAPL)
Earlier this year Morgan Stanley analyst Erik Woodring had said that he sees at least five ‘underappreciated’ catalysts for Apple Inc. (NASDAQ:AAPL) shares heading into the next year. The analyst was anticipating “a catalyst-rich event path over the next 12 months that is underappreciated by investors.” Among the notable catalysts expected by the analyst include an improvement in Apple Inc. (NASDAQ:AAPL)’s margins helped by an expected decline in FX headwinds.
The analyst also said that Apple Inc. (NASDAQ:AAPL)’s software revenue could gain and thanks to increasing update cycles Apple’s new iPhones are expected to see pent-up demand.
A total of 135 hedge funds in Insider Monkey’s database of hedge funds had stakes in Apple Inc. (NASDAQ:AAPL) as of the end of the second quarter.
Choice Equities Capital Management made the following comment about Apple Inc. (NASDAQ:AAPL) in its second quarter 2023 investor letter:
“Dramatic valuation differences across market cap sizes continue. This has been the case for some time now. Perhaps I have spent too much time discussing these dichotomies, as generally, I feel like if we pick the right stocks and manage market exposures thoughtfully, our equities- oriented portfolio will prosper across various market cycles. However, when markets become as lopsided as they have lately, I feel additional discussion on the market environment is worthwhile, if only to help highlight the opportunities that are available and the likely path forward. I expect future discussions to soon be focused again on our moderately concentrated portfolio. But for now, let’s take one last in-depth look at how far reaching these valuation dichotomies have again become.(Please note: charts that accompany the following can be found in the Appendix.)
Take Apple Inc. (NASDAQ:AAPL) for example. It is the largest stock by market cap, and fairly considered one of the best companies in the world. The company has been extraordinarily successful and improved standards of living everywhere in the process with their ubiquitous products. Along the way, shareholders have been richly rewarded, with shares increasing nearly fourteen-fold over the last ten years while generating an annualized total shareholder return of 31%, including dividends.
On the back of another big quarter for large cap tech, it is now the first stock to surpass the $3T market cap threshold. This makes its weighting in the ~$37T market cap of the S&P 500, ~8%. It also means this one stock’s market cap is larger than that of the entire ~$2.98T market cap of the Russell 2000 index, the first time in history a single stock has outweighed the Russell 2000 – aside from two brief days in September 2020 when Apple’s market cap then accomplished the same…” (Click here to read the full text)
4. Meta Platforms, Inc. (NASDAQ:META)
JMP Securities analyst Andrew Boon in July this year said Meta Platforms, Inc. (NASDAQ:META) is in “early stages” of many catalysts that could boost the company’s stock price. These catalysts include Reels content and the effects of Meta Platforms, Inc. (NASDAQ:META)’s cost cutting measures. Boon analyzed data and said Meta Platforms, Inc. (NASDAQ:META)’s Reels engagement is strong, “adding incremental time and impression growth” to Meta. The analyst also said AI was playing a key role in the amount of time people spend watching Reels content, thanks to improved recommendation algorithm. Meta Platforms, Inc. (NASDAQ:META) invested heavily in Reels last year and the company is ready to enjoy the fruits of its investments. The analyst said the growth in Reels has contributed “toward revenue neutrality with the Feed, which we believe is still on pace to be achieved by year end.”
Artisan Global Value Fund made the following comment about Meta Platforms, Inc. (NASDAQ:META) in its Q2 2023 investor letter:
“Our best performing stocks this quarter were Meta Platforms, Inc. (NASDAQ:META), Alphabet and Heidelberg Materials. Meta was the largest contributor to performance. Its shares have almost fully recovered from last year’s declines, rising 35% during the quarter and 138% YTD. During the quarter, the company reported earnings that showed a return to growth and healthy user engagement metrics. Most importantly, profitability appears to have stabilized and is poised to improve as significant cost reduction actions implemented over the past six months begin to have an impact. Separate from fundamental performance, there is excitement over AI’s potential to help the company’s business. While Meta’s technology prowess and massively scaled media platform certainly position the company to take advantage of AI, we believe it’s far too early to estimate any discrete tangible benefits. Overall, we view AI as one of several drivers that will contribute to Meta’s continued growth.”
3. Alphabet Inc. (NASDAQ:GOOGL)
There are several growth catalyst for Alphabet Inc. (NASDAQ:GOOGL) in the coming months and years, including AI, Cloud and search, but Morgan Stanley recently highlighted two catalysts for the stock that could boost the stock price. These include the potential release of Alphabet Inc. (NASDAQ:GOOGL)’s Gemini Model and the wider availability of search generative experience. Later this year Google is expected to roll out SGE for everyone in an effort to integrate more AI into its search results.
Out of the 910 hedge funds tracked by Insider Monkey, 204 hedge funds out of the 910 funds tracked by Insider Monkey were long Alphabet Inc. (NASDAQ:GOOGL). The biggest stakeholder of Alphabet Inc. (NASDAQ:GOOGL) was Natixis Global Asset Management’s Harris Associates which owns a $3.2 billion stake in the company.
2. Amazon.com, Inc. (NASDAQ:AMZN)
Analysts believe the Prime day event of 2023 and and AWS event scheduled for this year could be strong growth catalysts for AMZN.
Diamond Hill Large Cap Strategy made the following comment about Amazon.com, Inc. (NASDAQ:AMZN) in its Q2 2023 investor letter:
“Among our top contributors were insurance company American International Group (AIG), auto retailer CarMax and global online retailer Amazon.com, Inc. (NASDAQ:AMZN).
Amazon’s management team has been working to improve retail profitability, and Q1 results showed progress. In the case of Amazon’s web services (AWS), the market has shifted its focus from where growth will bottom in the near term to how AI can help accelerate the adoption of public cloud services in the future. We believe Amazon’s competitive advantages will continue to grow and that the business has the potential to grow faster than the overall economy in the coming years.”
1. Microsoft Corporation (NASDAQ:MSFT)
AI remains the biggest growth catalyst for Microsoft Corporation (NASDAQ:MSFT) which has already gained on the back of the AI boom this year, thanks to the company’s investments in Open AI and its head-on approach in the emerging industry. Citi analysts opened a 90-day catalyst watch on MSFT recently. Some growth catalysts for Microsoft Corporation (NASDAQ:MSFT), according to Citi, include a stabilizing PC market, improved Azure inputs, and a revenue-acceleration trend. Citi analysts set a $420 price target on Microsoft Corporation (NASDAQ:MSFT).
Microsoft Corporation (NASDAQ:MSFT) is the most popular stock among the elite hedge funds tracked by Insider Monkey. A total of 300 funds in Insider Monkey’s database had stakes in Microsoft Corporation (NASDAQ:MSFT).
ClearBridge Value Equity Strategy made the following comment about Microsoft Corporation (NASDAQ:MSFT) in its Q2 2023 investor letter:
“We initiated a small position in Microsoft Corporation (NASDAQ:MSFT) during the quarter, which may seem surprising given our concerns about index concentration. However, we seized the opportunity on a compelling entry point below our business value estimate, due to an anticipated acceleration of demand for Microsoft’s Azure cloud business and incremental revenues from integration of Microsoft’s AI Copilot program into its office platform. We believe this could support double-digit growth, while simultaneously solidifying Microsoft’s competitive position as an AI winner. Even as a small position, we believe Microsoft provides a large portfolio construction benefit given low correlation to the rest of the portfolio.”
You can also take a peek at 15 Most Innovative Companies in Canada and 15 Best Casino Stocks To Buy Heading Into 2024.
