We recently published a list of the 10 Best US Stocks Under $10 to Buy Right Now. In this article, we are going to take a look at where Snap Inc. (NYSE:SNAP) stands against other US stocks under $10 to buy right now.
On March 12, Stephanie Guild of Robinhood and Marci McGregor of Bank of America Merrill Lynch shared their perspectives on the current state of the market and strategies for navigating uncertainty. Guild explained that retail investors’ approach to buying the dip has shifted in line with changing market dynamics. While clients are still investing, they are focusing on specific names they favor. At the same time, she noted an increased tendency toward diversification, with investors allocating funds to index investments more than ever before. Additionally, many are taking advantage of Robinhood’s 4% cash yield, which reflects a balanced approach to investing during uncertain times.
McGregor emphasized the importance of focusing on long-term trends rather than reacting to short-term headlines, which often create unnecessary noise. She attributed some weak economic data from January to weather-related factors, calling it a temporary head fake. While acknowledging ongoing uncertainty around trade policy, McGregor highlighted key drivers for market recovery. She pointed out that 6 of the 11 S&P 500 sectors posted double-digit year-over-year earnings growth in Q4 and noted that market broadening is underway. Year-to-date, 63% of S&P constituents have outperformed the index compared to less than 30% over the last two years. This broadening trend signals potential strength in the market. Looking ahead, McGregor predicts a gradual easing of financial conditions later this year, potentially supported by a weaker dollar and improving corporate conditions. She suggested that if soft economic data begins to manifest more clearly, it could lead to Fed rate cuts. Factors such as deregulation, a merger cycle, and potential tax cut extensions may also contribute to recovery. Despite uncertainties, McGregor advised clients to buy on weakness and stay diversified. This includes exposure to international markets like Europe while maintaining confidence in the US as a leading market.
Our Methodology
We used the Finviz stock screener to compile a list of the top US stocks that were trading below $10 as of March 24. We then selected the 10 US stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A young adult family using a Camera to record moments of their daily life.
Snap Inc. (NYSE:SNAP)
Share Price as of March 24: $9.33
Number of Hedge Fund Holders: 44
Snap Inc. (NYSE:SNAP) is a technology company that is best known for its visual messaging app called Snapchat. It allows users to communicate through short videos and images. It also offers subscription services, eyewear products, and a range of advertising solutions, which include AR ads and various video and image ad formats.
The company’s Direct Response (DR) Advertising saw a 14% year-over-year increase in Q4 2024, which contributed to a total of $1.41 billion in advertising revenue. For the full year 2024, DR ad revenue grew 16% year-over-year, which fueled the total $5.36 billion revenue. The company is enhancing DR capabilities through optimizations like Pixel Purchase and App Purchase, with app-based purchase revenue up over 70% year-over-year. Lead generation products also saw a 6x increase in leads generated for advertisers in Q4, with a 40% average reduction in cost per lead.
Small and medium-sized businesses (SMBs) contributed the most to ad revenue growth in 2024. Tools like Snap Promote simplify ad buying for SMBs. Snap Inc. (NYSE:SNAP) is also implementing automation to improve campaign performance. The company is also testing new ad placements like Sponsored Snaps and Promoted Places, which show promising early results, with a 30% average increase in reach in the US.
Overall, SNAP ranks 6th on our list of the best US stocks under $10 to buy right now. While we acknowledge the growth potential of SNAP, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SNAP 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 30 Best Stocks to Buy Now According to Billionaires
Disclosure: None. This article is originally published at Insider Monkey.
