On one hand, some investors view the status quo as a bear market, and on the other, some analysts hold a bullish view. While caution is necessary, blue chip stocks with historically solid results have an edge in the risk department.
The Status Quo Calls for Safer Investing
Geopolitical tensions on the one hand and economic turmoil on the other, have created a concerning situation for investors. On September 3, Tom Lee, Fundstrat Global Advisors managing partner and head of research, appeared in an interview on CNBC to share his outlook of the market. Lee is particularly concerned about the job market, the surprise inflation has in store for the economy, and weak growth projections.
Lee emphasized that investors must remain cautious for the next eight weeks or so, especially with elections and rate cuts, he predicts that the general public is bound to be nervous and confused. While his timeline may not be exact, he expects economic conditions and political turmoil to settle within the suggested time frame.
He further added that it is safer to be cautious than to make hasty decisions at the moment. He also stated that the oil industry is particularly weak due to geopolitical tensions despite a massive rise in production. Lee added that increasing production levels does not indicate a booming global economy, because, previously, production increased only because prices were rising which led to more drilling and activity in the sector.
Lee recommended that investors will be able to buy long, and therefore it is best to remain cautious. He further added that we already had 7% corrections twice this year, and there is a possibility of another 7% to 10% correction in the market. He did agree that the market is currently testing investors’ patience and he predicts something close to a 5% pullback.
How Must Investors Navigate Moving Forward?
On September 6, Liz Ann Sonders, Charles Schwab’s chief investment strategist, appeared in an interview on CNBC to discuss how investors should navigate the market right now. Sonders held a particularly bullish view of the market. She further added that while there has been significant weakness and churn on the surface, it is concealed by cap-weighted index returns.
Sonders suggested that the market level declines were most likely a set-up for the broadening out we have witnessed. She shared her point of view on the market, which is rather bullish, and emphasized that stocks in the consumer discretionary, technology, and communication services sectors are doing particularly well. Sonders, however, did point out that the market may see an exhaustion in the mega-cap tech trade.
She then suggests that investors must let go of the perception that to succeed they must invest in mega-cap tech stocks. She states that there are a myriad of opportunities outside of the mega-cap tech that are high quality. Finally, Sonders believes that a recession is not on the cards and that the current situation is nothing more than a growth scare.
Now that we have assessed the market, let’s take a look at the 7 best stocks for beginners with little money according to analysts. You can also take a look at the best defensive stocks to buy.
A broker trading stocks on a financial trading floor, representing the investment approach of the company.
Our Methodology
To come up with the 7 best stocks for beginners with little money according to analysts we sifted over multiple similar rankings and ETFs to come up with safe and blue chip stocks. The rationale behind this was that investors with little money don’t afford to lose a lot and are more likely to invest in stocks that are safer or risk-free. We then sorted our stocks based on their upside potential. We have also included the hedge fund sentiment around each stock, as of Q2 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
7 Best Stocks for Beginners with Little Money According to Analysts
7. NIKE, Inc. (NYSE:NKE)
Analyst Upside as of September 10: 15%
Number of Hedge Fund Folders: 66
NIKE, Inc. (NYSE:NKE) is one of the best stocks for beginners with little money according to analysts. NIKE, Inc. (NYSE:NKE) is an athletic footwear and apparel company based in the United States. For the year ended 2023, the company held a market share of almost 35% in the sports footwear category in the United States.
For the fiscal year ended 2024, the company logged over $51 billion in revenue, up by 1% year-over-year. In the fiscal fourth quarter of 2024, the company made $12.6 billion in revenue, of which wholesale revenues were $7.1 billion, and direct revenues were $5.1 billion.
While the company experienced a decline in revenue for the Nike brand in North America, it was offset by the growth in China and the APLA (Asia Pacific and Latin America) region. Despite moderate revenue growth, NIKE, Inc. (NYSE:NKE) managed to deliver $6.4 billion to shareholders in fiscal 2024. Of this, $2.2 billion was paid in dividends and a share repurchase worth $4.3 billion was executed.
NKE is a consumer favorite for its high-quality athletic wear. While its sales may come across as saturated, its consistent performance is an implication of its loyal and solid customer base. Analysts are bullish on NKE and their 12-month median price target of $92 points to a 15% upside from current levels. In Q2 2024, there were 66 hedge funds that held positions in the stock with total stakes amounting to $3.19 billion. As of June 30, Fisher Asset Management was the largest shareholder with a position worth $732.6 million.
Mar Vista Investment Partners’ Mar Vista Focus strategy stated the following regarding NIKE, Inc. (NYSE:NKE) in its Q2 2024 investor letter:
“NIKE, Inc.’s (NYSE:NKE) stock declined following management’s revised forecast for fiscal year 2025, projecting negative mid-single-digit revenue growth instead of the previously anticipated positive growth. The company has observed a marked slowdown in lifestyle product sales since April, a trend that persisted into June. Our current projections indicate that both sales and earnings will fall 15-20% below the conservative estimates set by management just a quarter ago. This substantial downward revision in sales and earnings is attributed to insufficient product innovation, wholesale channel shift, and intentional reduction of supply in lifestyle franchises. While the negative adjustments to guidance could potentially act as a clearing event for the stock, the degree of conservatism in the new projections remains uncertain.
Nike maintains its position as the global leader in sportswear. However, its revenue growth has been hampered by a lack of innovation, and its recovery is further complicated by deteriorating macroeconomic conditions in the US and China. The company’s renewed focus on innovation and efforts to re-engage with wholesale channels may eventually help restore growth, but we believe increased skepticism regarding management’s ability to execute is justified”
6. Bank of America Corporation (NYSE:BAC)
Analyst Upside as of September 10: 15%
Number of Hedge Fund Folders: 92
Bank of America Corporation (NYSE:BAC) is a financial services company that ranks sixth on our list of the best stocks for beginners with little money according to analysts. The company is a multinational investment and wealth management bank that provides services to individuals, institutions, small to medium-sized businesses, large corporations, and the government.
The Tier 1 investment company is among the top credit card issuers in the United States and has one of the best retail networks across the country. The company provides its services across four major segments including Global Wealth and Investment Management, Global Banking, Global Markets, and Consumer Banking.
In the second quarter of 2024, Bank of America Corporation (NYSE:BAC) added another 278,000 net new checking accounts, bringing its fiscal half-year 2024 total to 500,000. As for the wealth management segment, the company maintained 6,100 new relationships and added thousands of small businesses in its commercial business sector. Bank of America now manages $5.7 trillion in client balances, loans, deposits, and investments in its consumer and wealth management segments.
Bank of America Corporation’s (NYSE:BAC) position in the market is evident from its 69-million-individual customer base, 3,800 retail locations, and 15,000 ATMs across the United States. Overall, the company has 58 million verified digital users, with 47 million active mobile users. Bank of America also opened 11 new financial centers during the quarter and renovated another 243.
Analysts are also bullish on BAC and their 12-month median price target of $45.5 points to a 15% upside from current levels. In Q2 2024, there were 92 hedge funds that held positions in the stock with total stakes amounting to $48.1 billion. As of June 30, Berkshire Hathaway was the largest shareholder with a position worth $41.1 billion.
ClearBridge Investments’ ClearBridge Value Equity Strategy stated the following regarding Bank of America Corporation (NYSE:BAC) in its first quarter 2024 investor letter:
“We added several new positions during the quarter. Our largest new addition was Bank of America Corporation (NYSE:BAC), one of the world’s leading financial institutions, serving some 66 million consumer and small business clients across the U.S. as well as large corporations, financial institutions and governments globally. We believe that the interest rate pressure that Bank of America faced in early 2023 has subsided, and risks surrounding deposit outflows have abated, which should allow the company to improve its book value and capital growth as well as benefit from a rebound of capital markets activity.”
5. Merck & Co., Inc. (NYSE:MRK)
Analyst Upside as of September 10: 22%
Number of Hedge Fund Folders: 96
Merck & Co., Inc. (NYSE:MRK) is a pharmaceutical company headquartered in the United States. The company specializes in the production of vaccines and provides hospital care services.
Merck & Co., Inc. (NYSE:MRK) is constantly striving to innovate and expand into new avenues. Its new pneumococcal conjugate vaccine for adults just received approval from the FDA. The company also closed its acquisition of EyeBio, in an attempt to venture into the ophthalmology industry and invent a treatment for retinal conditions. Its Animal Health segment also closed the acquisition of Elanco’s aqua business, presenting Merck & Co., Inc. (NYSE:MRK) as a leader in the animal health business.
Overall, in the second quarter of 2024, the company’s Human Health business grew by 11%, its Animal Health segment saw a 6% increase in sales, and its star cancer drug went up by 21% reaching $7.3 billion in sales. Merck & Co., Inc.’s (NYSE:MRK) commitment to innovation is what helps it stand out. The company launched a new vaccine for adult patients with pulmonary arterial hypertension earlier this year. The vaccine was only approved by the FDA on March 26 and logged over $70 million in sales in the quarter. 40% of these sales came from doses administered to patients and the remainder to distributors.
Analysts are bullish on MRK and their 12-month median price target of $141 points to a 22% upside from current levels. 96 hedge funds hold the stock as of Q2 2024. As of June 30, Fisher Asset Management was the largest shareholder with a position worth $1.77 billion.
Baron Funds’ Baron Health Care Fund stated the following regarding Merck & Co., Inc. (NYSE:MRK) in its first quarter 2024 investor letter:
“Global pharmaceutical company Merck & Co., Inc. (NYSE:MRK), Inc. contributed on the continued growth of Keytruda, the company’s key asset and the leading immuno-oncology agent used to treat a variety of cancers. The FDA’s late March approval of pulmonary arterial hypertension drug sotatercept, also drove share gains. We retain conviction as Merck has started to transition from prioritizing its Keytruda franchise to building a more diversified business, with a focus on the Gardasil vaccine, pneumococcal vaccine development, and cardiovascular drug development, well in advance of the scheduled expiration of patent protection/exclusivity rights.”
4. Chevron Corporation (NYSE:CVX)
Analyst Upside as of September 10: 23%
Number of Hedge Fund Folders: 64
Chevron Corporation (NYSE:CVX) ranks fourth on our list of the best stocks for beginners to buy with little money according to analysts. The energy and petroleum company is headquartered in California, United States, and is present in more than 180 countries.
In the second quarter of 2024, Chevron Corporation (NYSE:CVX) grew global production by 11%, year-over-year. Such is attributable to the integration of PDC Energy and the deal with Permian and Denver-Julesburg (DJ) Basins. The company also forged alliances in Namibia, Brazil, Equatorial Guinea, and Angola to expand its exploration base and enhance its acreage position. As for the United States, Chevron’s (NYSE:CVX) net oil-equivalent production increased by 353,000 barrels a day from a year ago. Again, the company attributes this to its successful acquisitions and strategic alliances.
Chevron Corporation (NYSE:CVX) is also making strides in clean and renewable energy. Previously in May, the company operated a gas turbine on a 60% hydrogen fuel blend, significantly reducing emissions. Moreover, the company also owns a 16.5-megawatt wind farm that can power more than 13,000 homes annually.
Overall, Chevron Corporation (NYSE:CVX) reported revenue worth $51.8 billion, up by 4.67% year-over-year, and ahead of market consensus by $453.45 million, in this quarter. The stock has huge potential in the clean energy industry, making it one of the best stocks to buy with little money.
Analysts are bullish on CVX and their 12-month median price target of $175 points to a 23% upside from current levels. In Q2 2024, there were 64 hedge funds that held positions in the stock with total stakes amounting to $22.41 billion. As of June 30, Berkshire Hathaway was the largest shareholder with a position worth $18.55 billion.
3. Amazon.com Inc (NASDAQ:AMZN)
Analyst Upside as of September 10: 26%
Number of Hedge Fund Folders: 308
Amazon.com Inc (NASDAQ:AMZN) is a technology company that specializes in e-commerce, online retail, streaming, and data cloud services. Its e-commerce platform is functional in 20 countries and ships to over 100 countries. Its proprietary cloud service, Amazon Web Services, on the other hand, is used by millions of active customers and has over 130,000 AWS partners across 200 countries.
The company was first launched in 1994 and is on track to capture over 40% of the e-commerce market in the United States. As for its cloud segment, Amazon Web Services (AWS) increased its revenue by 17.2%, year-over-year in Q1 to 18.8% in Q2. AWS has logged 30% plus operating margins consistently for the past five quarters, making it a star performer.
Amazon.com Inc (NASDAQ:AMZN) is also making strides on the AI front. Over the past few months, the company has partnered with AI startups like Anthropic and signed deals with the US government to test new AI models. In July, the e-commerce giant processed a new server design, similar to the ones produced by NVIDIA. As for AI hardware, the company has produced several AI chips including Trainium and Inferentia, allowing it to reduce its dependence on other companies.
Analysts are bullish on AMZN and their 12-month median price target of $220 points to a 26% upside from current levels. Overall, AMZN was held by 308 hedge funds and Fisher Asset Management was the largest shareholder.
Diamond Hill Select Strategy stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q2 2024 investor letter:
“Among our top individual contributors in Q2 were Amazon.com, Inc. (NASDAQ:AMZN), Texas Instruments and Mr. Cooper Group. Internet retail and cloud infrastructure company Amazon is benefiting from strong profitability, particularly in its Amazon Web Services (AWS) business. Shares also received a boost amid growing optimism around the demand for AWS as Amazon customers’ investments in generative AI projects continue growing.”
2. The Walt Disney Company (NYSE:DIS)
Analyst Upside as of September 10: 30%
Number of Hedge Fund Folders: 92
The Walt Disney Company (NYSE:DIS) is a multinational mass media company that ranks second on our list of the best stocks for beginners with no money according to analysts. The diversified business operates across five major segments including media networks, parks and resorts, studio entertainment, consumer products, and interactive media.
In the fiscal third quarter of 2024, the company reported revenue worth $24.5 billion, up by 7% year-over-year. Its revenue was partially driven by its world-famous parks, which are highly attractive to tourists from across the globe. Its domestic parks and cruise chips segment accounted for 60% of operating income.
Walt Disney’s (NYSE:DIS) influence and position in the market is not unknown. Previously, in late July, the National Basketball Association (NBA) signed an 11-year media agreement with the company. All of the NBA’s and WNBA’s live events and programming will be streamed on ESPN’s consumer platform set to launch in 2025. The company also received 183 Emmy nominations for its top-class shows like Shotgun and The Bear.
Overall, The Walt Disney Company’s (NYSE:DIS) is a company like no other. Its services are unique and its target market is large, making it one of the best stocks to buy with little money. Analysts are bullish on DIS and their 12-month median price target of $115 points to a 30% upside from current levels. 92 hedge funds held positions in the stock at the end of Q2 2024. As of June 30, Fisher Asset Management was the largest shareholder with a position worth $787.9 million.
Mar Vista Investment Partners’ Mar Vista Focus strategy stated the following regarding The Walt Disney Company (NYSE:DIS) in its Q2 2024 investor letter:
“The Walt Disney Company’s (NYSE:DIS) shares declined after its earnings release, even though the company exceeded recently upgraded financial forecasts. While Disney+ and Hulu reached a milestone by turning their first quarterly profit, the company cautioned about theme park attendance returning to pre-pandemic norms. This signals a deceleration following a period of exceptional growth, impacting the stock as theme parks and experiences account for roughly 60% of Disney’s earnings. Despite broader consumer worries, Disney’s stock is still trading with a significant discount to fair value. We expect the gap between Disney’s market price and its intrinsic value to shrink as its streaming division evolves and increases profitability over time.”
1. NVIDIA Corporation (NASDAQ:NVDA)
Analyst Upside as of September 10: 42%
Number of Hedge Fund Folders: 179
NVIDIA Corporation (NASDAQ:NVDA) is one of the most popular stocks at the moment, also referred to as the AI star. The GPU maker is known for its cloud solutions, chip systems, and growing role in producing artificial intelligence solutions.
The company’s Advanced AI platform for Enterprise improves productivity, streamlines AI workflows, and ensures faster deployment and processing of AI. Its networking platform for AI, Spectrum X, is projected to become a multi-billion dollar entity in a year. Moreover, earlier this year, the company introduced its Blackwell graphics processing unit (GPU), backed by six different technologies. NVIDIA Corporation (NASDAQ:NVDA) expects to ramp production of Blackwell in the fiscal fourth quarter and ship several billion dollars in Blackwell revenue. Currently, the demand for its GPUs exceeds the supply.
Overall, the company logged $ 26.3 billion in data center revenue, up 16% from the previous quarter and 154% year-over-year. The revenue growth was driven by strong demand for Nvidia’s GPU Computing platform. Compute revenue grew by 2.5x and networking revenue expanded by 2x compared to the previous year. NVIDIA Corporation (NASDAQ:NVDA) logged $30 billion in revenue during the FQ2 of 2025, up by 122% year-over-year, well above its outlook of only $28 billion.
Analysts are bullish on NVDA and their 12-month median price target of $150 points to a 42% upside from current levels. At the close of Q2 2024, 179 investors were bullish on NVDA, with total stakes amounting to $53.7 billion. Of those, Ken Griffin’s Citadel Investment Group was the highest stakeholder with a position of $18.35 billion.
At Insider Monkey, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
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