We recently compiled a list of the 10 Best Stocks for Beginners with Little Money According to Hedge Funds. In this article, we are going to take a look at where Netflix, Inc. (NASDAQ:NFLX) stands against the other beginner-friendly stocks.
Headlines from the US Stock Market
Uncertainty sweeps across the US with the incoming administration’s potential policies. Simultaneously, the Federal Reserve has decided to pause its rate-cutting cycle and the decision to resume easing is doubtful amidst Trump’s trade policies which are being deemed inflationary. Tariffs on foreign imports are considered a risk of reviving inflation. According to Reuters, Dustin Reid, chief strategist of fixed income at Mackenzie Investments in Toronto, reiterated the uncertainty looming as follows:
“Everything that is going on right now, from economic data to markets news and tariffs, adds up to a lot more uncertainty across all markets”
Recently, technology stocks benefitting from the business potential of AI witnessed a deep shock as Chinese startup DeepSeek revealed a large language model that can compete with American AI giants but at a fraction of the cost of OpenAI’s, Google’s, or Meta’s popular AI models. DeepSeek unveiled a free, open-source large language model that it claims took only two months and less than $6 to build.
The event raised a lot of concerns over America’s leadership in the AI sector and how big tech giants are investing heavily in AI models and data centers while DeepSeek somehow developed a highly competitive model without having as much compute as U.S. hyperscalers, as pointed out by Srini Pajjuri, semiconductor analyst at Raymond James. While the US has been trying to limit China’s access to the chips powering advanced AI systems, the news about DeepSeek’s chatbot making it to most-downloaded free app in the US on Apple’s App Store demonstrates the country’s rapid gains in the sector.
Our Methodology:
In order to compile a list of the 10 best stocks for beginners with little money according to hedge funds, we used a consensus of similar rankings as well as blue-chip ETFs. Moving on, we shortlisted the top 10 stocks from our list which had the highest number of hedge fund holders. The 10 best stocks for beginners with little money according to hedge funds have been arranged in ascending order of their hedge fund holders as of Q3.
At Insider Monkey we are obsessed with 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).
A home theater with family members enjoying streaming content together.
Netflix, Inc. (NASDAQ:NFLX)
Number of Hedge Fund Holders: 121
Netflix, Inc. (NASDAQ:NFLX) is a global streaming entertainment service with more than 300 million paid memberships in over 190 countries enjoying TV series, films, and games across various genres and languages. Netflix started its journey in 1997 as a DVD-rental-by-mail firm and began streaming in the US in 2007 and internationally in 2010 and it became global in 2016.
With streaming entertainment replacing the linear TV experience potentially for an enduring period, Netflix expects to be one of the leading firms of the streaming entertainment era. The firm has been at a scale where it can economically create original content for Netflix since 2013 thereby reaping the benefits of originals. Netflix, Inc. (NASDAQ:NFLX) has a major advantage over its linear competitors as its shows don’t compete for scarce prime-time slots like on linear TV. Furthermore, the reach is vast with Netflix being virtually everywhere except for Russia and China.
The company ended 2024 with 302 million memberships. In Q4 of 2024, operating income rose 52% year-over-year. The Q4 slate ended up outperforming expectations with Squid Game 2 being on track to becoming one of its most-watched original series seasons, the Jake Paul vs. Mike Tyson fight becoming the most-streamed sporting event ever and delivering the two most-streamed NFL games in history on Christmas Day. With a steady drumbeat of hit titles from countries globally, healthy member engagement, and a large strong core business, Netflix, Inc. (NASDAQ:NFLX) is poised for growth.
Overall NFLX ranks 9th on our list of the best stocks for beginners with little money according to hedge funds. While we acknowledge the potential of NFLX as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than NFLX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
Disclosure: None. This article is originally published at Insider Monkey.