In this article, we will take a detailed look at Top 10 Stocks Everyone’s Talking About.
Investors are on tenterhooks amid the latest selloff as they keep up with President Donald Trump’s volatile tariff policies and assess the slowing enthusiasm in the AI trade. Trivariate’s Adam Parker said in a latest program on CNBC that while he wants to be bullish on the stocks for a rebound, he believes we haven’t seen the bottom yet. The analyst recommends going on the defense:
“I mean every part of me wants to get bullish again, right? You know, we had the good call of saying the market will be down in the first half and choppy with concerns about tariffs and all that. And you know, now we’ve seen a lot of people who were bullish before throwing in the towel and getting bearish, and I really want to do it, right? But I can’t. And the reason is because I don’t think we’ve seen enough of a blowoff on the positioning. I mean, if you look at the companies that were talking at big conferences in March, a lot of things are slowing. And so I think this is more than a growth scare already—this is actually like a growth slowdown. And so the question is, will we get negative guidance in April? Will we see companies guide down and the stocks not go down? If I see that behavior, then I’ll probably want to get more risk on. But until then, I think we have to play a little bit more defense.”
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For this article, we picked 10 stocks Wall Street analysts are showing interest in. With each stock, we have mentioned their hedge fund sentiment. 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).
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10. Altria Group Inc (NYSE:MO)
Number of Hedge Funds Investors: 32
Aquiles Larrea from Larrea Wealth Management explained in a latest program on Schwab Network the reasons why investors are flocking to Altria Group Inc (NYSE:MO).
“When people see this type of volatility and market calamity, they want to be in stable investments that have made them money over the years. If you look at the 6% plus dividend along with the growth that occurs when there’s a flight to quality, fund managers and hedge fund managers are all moving in at the moment. This might just be a quick trade for them, but they’re going to pick up 1% to 5% in an era of calamity during this short-term volatility that’s happening right now. We’re looking for them to make anywhere between 6% to 8% conservatively this year, and that may or may not include the dividend, which I believe is closer to 7% right now.”
Ashva Capital stated the following regarding Altria Group, Inc. (NYSE:MO) in its Q3 2024 investor letter:
“At Ashva Capital, our focus on intrinsic value–rather than market sentiment or temporary price metrics– sets our portfolio apart from peers. For example, we hold Altria Group, Inc. (NYSE:MO), which has demonstrated resilience and strong performance within our portfolio, particularly following a robust Q3 earnings report. Altria’s results highlighted increased demand for smokeless products, underscoring both the adaptability of its business model and its long-term growth potential—a key factor in our investment decision.
This approach to intrinsic value echoes insights from renowned value investor Bill Miller, whose strategy emphasized fundamental value over market-driven factors. Key principles from Miller’s approach that inform our strategy include:..” (Click here to read the full text)
9. UiPath Inc (NYSE:PATH)
Number of Hedge Funds Investors: 34
Cathie Wood’s Ark Invest recently sold over 550,000 shares of UiPath (NYSE:PATH). The stock is down 16% so far this year.
Ark Invest sold a total of 558,280 shares across three of its actively managed exchange traded funds. The flagship ARK Innovation ETF (NYSEARCA:ARKK) accounted for the largest portion, selling 400,811 shares. The ARK Next Generation Internet ETF (NYSEARCA:ARKW) sold 115,790 shares, while the ARK Autonomous Technology & Robotics ETF (BATS:ARKQ) unloaded 41,679 shares of the New York-based company.
8. Caterpillar Inc (NYSE:CAT)
Number of Hedge Funds Investors: 50
Aquiles Larrea from Larrea Wealth Management said in a latest program on Schwab Network that he sees growth potential for Caterpillar Inc (NYSE:CAT) in the long term.
“Here’s your opportunity for an entry. We that you’re going to get into this stock. Dividend is not too much to speak of—about 2% or so—but let’s talk about the growth. The growth opportunity—just take a look at the last two years that have occurred with this. There’s plenty of opportunity here. It’s not like your Home Depot of the world that are going to be really hit by the upcoming tariffs, but there’s still opportunity with Caterpillar to make more money. We’re looking to make close to double-digit returns in the long term, going out 12 to 18 months.”
Diamond Hill Large Cap Strategy stated the following regarding Caterpillar Inc. (NYSE:CAT) in its Q3 2024 investor letter:
“Other top Q3 contributors included HCA Healthcare and Caterpillar Inc. (NYSE:CAT). Heavy construction machinery manufacturer Caterpillar has held up better than industry peers against a challenging macroeconomic backdrop and a generally slowing construction environment.”
7. AppLovin Corp (NASDAQ:APP)
Number of Hedge Funds Investors: 51
AppLovin (NASDAQ:APP) shares are down 14% so far this year, but some analysts are reiterating their bullish view on the stock.
Citi Research remains bullish on the digital advertising and e-commerce company, keeping a Buy rating and a $600 price target.
Citi attributes the decline in stock value to “a series of bearish reports that, we believe, make spurious claims about AppLovin and a broader sell-off in momentum stocks.”
“Based on peer’s revenue growth rates, EBITDA margins and equity values, AppLovin should be worth $550 a share,” Citi analysts, led by Jason Bazinet, wrote in a note to investors. “The prevailing equity value (of $260) suggests the market is ascribing a ~50% likelihood that AppLovin’s equity is worth $0. That strikes us as remarkably high. We suspect this has less to do with the merits of the bears’ claims. More likely, in our view, it stems from AppLovin’s rapid success, opaque business model and investors’ long-held skepticism about AdTech business models.”
ClearBridge Mid Cap Strategy stated the following regarding AppLovin Corporation (NASDAQ:APP) in its Q4 2024 investor letter:
“Stock selection in IT was the greatest contributor to performance on strength in AppLovin Corporation (NASDAQ:APP) and Marvell. AppLovin is the world’s leading mobile game and app advertising platform, providing software for marketing and monetization, powered by its proprietary AI targeting engine Axon. We see opportunity for AppLovin to continue to expand and grow its share of the market for mobile app marketing at a time when mobile gaming ad spend is recovering from a higher-rate-driven trough. We also see the potential for the company to expand its addressable market to include e-commerce advertising, around which initial forays have been encouraging. With strong incremental margins and management keeping expenses controlled, the company should be able to drive significant free cash flow growth as revenue continues to scale.”
6. Toll Brothers Inc (NYSE:TOL)
Number of Hedge Funds Investors: 54
Jim Cramer in a latest program on CNBC said that Toll Brothers Inc (NYSE:TOL) shares lost value amid rising interest rates but the stock can rebound amid the changing environment:
“If you take up a chart of Toll Brothers, if you look at a chart right now, that is just a year and a half. Okay, so it’s now lost everything that it made since July of last year. That was, that’s a rather remarkable. Now, it did trade as low as 75, you know, two years ago, but it’s important to remember we’re sitting here and we’re saying, “Oh my God, oh my God.” Well, one, interest rates are going the direction of the Bulls. Just when interest rates are going now, are people going to buy, not buy homes because they’re worried? Sure, but how about if mortgage rates go lower? Maybe they think they have their chance. So, I just want to urge people to realize that it isn’t like the market woke up and said, “Oh my God, the president’s anti-stocks.” The president’s been consistent the whole way, terrible for the market, terrible. So, if people wake up today and say, “Oh my God, he’s terrible,” I would say, “You know what, where you been?” And that the markets figure that out, right? And if interest rates plummet, then I don’t care what Trump says. I know the consumer’s weak. I’m sure the numbers are going to be bad, but there doesn’t have to stay the way.”
Baron Real Estate Fund stated the following regarding Toll Brothers, Inc. (NYSE:TOL) in its Q4 2024 investor letter:
“As noted earlier in this letter, we chose to decrease the Fund’s homebuilder exposure in D.R. Horton, Inc., Lennar Corporation, and Toll Brothers, Inc. (NYSE:TOL) in the most recent quarter following exceptional share price performance over the prior two years. From September 30, 2022, through September 30, 2024, shares of Toll Brothers, Lennar, and D.R. Horton increased 269%, 155%, and 184%, respectively. Homebuilder valuations for our investments had approached near peak valuations from prior cycles (at or above 2 times tangible book value). We also have concerns that the recent 100 basis point increase in interest rates will further crimp housing affordability. This could lead to flattening home prices and elevated homebuilder incentives to entice buyers to purchase a home. Further, the new administration policy decisions around tariffs, immigration, and deportation may increase the cost for labor and materials. The issues cited above may lead to pressure on homebuilder gross margins in 2025.
The shares of several homebuilders and residential-related building product/ services companies foreshadowed some of these concerns in the fourth quarter and valuations are becoming more compelling. We are monitoring developments closely and may look to acquire additional shares in 2025…” (Click here to read the full text)
5. Crowdstrike Holdings Inc (NASDAQ:CRWD)
Number of Hedge Funds Investors: 74
Josh Brown, co-founder and CEO of Ritholtz Wealth Management, said in a latest program on CNBC that he’s a holder of Crowdstrike Holdings Inc (NASDAQ:CRWD) and would not react to price target cuts on the stock from Wall Street.
“Look, it’s in this cohort of high beta, high octane growth stocks, and when they sell eight of them, the other two don’t get spared. These things are traded in baskets. Also, you have a sell-the-news situation. You have a company that had really good earnings, but everyone expected them—really good earnings, you know that based on how much the stock had gone up over the prior six months. So that’s really all it takes: sell the news, profit taking, momentum washout. Why would CrowdStrike be higher? Makes no sense. What I do in situations like this: I already own it, so I’m not adding to it. I own it in the low hundreds. But take the $361 mentally and just say, all right, $36 stock. The average Wall Street price target, let’s say, is like $420 to $440. Can a $36 stock recover quickly to $42? Yes, obviously yes. So it’s a big dollar amount. The shares have pulled back in the last week or two, but in the grand scheme of things, we’re still in a major uptrend here, and I would not be reacting to sell-side price target cuts.”
Aristotle Atlantic Core Equity Strategy stated the following regarding CrowdStrike Holdings, Inc. (NASDAQ:CRWD) in its Q4 2024 investor letter:
“CrowdStrike Holdings, Inc. (NASDAQ:CRWD) provides cybersecurity products and services that offer endpoint protection and threat intelligence solutions, enabling customers to prevent damage from targeted attacks, detect advanced malware and search all endpoints. The company’s open cloud architecture enables it and third-party partners to rapidly innovate, build and deploy new cloud modules that can provide customers with enhanced functionality across a myriad of use cases.
We see the cloud cybersecurity market as positioned to experience strong growth over the next few years, driven by continued migration from on-premises to cloud-based architecture. We believe CrowdStrike can benefit from this trend due to its early-mover advantage, multiple product offerings and native integrations with leading cloud platforms. The increasing threats from state-sanctioned cybercriminals using high-performance computing and AI necessitate higher spending on advanced cybersecurity products. The total addressable market (TAM) is projected to grow significantly over the next four calendar years. Additionally, CrowdStrike’s cloud-native architecture and unified platform approach provide competitive advantages, resulting in high customer retention and widespread adoption of multiple modules.”
4. Tesla Inc (NASDAQ:TSLA)
Number of Hedge Funds Investors: 99
Itay Michaeli, TD Cowen analyst, recently explained in a program on CNBC his rationale behind a $388 price target on Tesla Inc (NASDAQ:TSLA). He also has a Buy rating on the stock that is down 40% so far this year.
“Tesla is always a highly debated stock, but what we find really helps it work are sentiment-shifting catalysts. The stock is down about 50% from its highs, and while the upcoming quarter will be challenging—that’s pretty widely known—we see several potentially significant catalysts beyond the first quarter, both on the EV and AV sides. The setup actually reminds us of last year when the stock faced a lot of pressure in the first half before sentiment improved in the second half. We see a similar pattern here and want to be positioned for these potential catalysts when they come.”
Analysts are looking beyond Elon Musk’s big claims and digesting the harsh reality facing the company. Tesla’s sales are falling all over the world despite the broader industry growth. For example, in California, the largest U.S. market for electric vehicle adoption and sales, Tesla sales fell about 12% year over year in 2024, causing its market share to drop from 60.1% in 2023 to 52.5% in 2024. Was it because Californians are buying fewer EVs? No. Californians purchased more than 2 million electric cars during the year, almost double when compared to the past two years.
Things aren’t looking good for Tesla in Europe, too. For example, in Germany, Tesla delivered just 1,429 new cars in February, down 76% from the same month last year. In contrast, battery-electric vehicle (BEV) registrations surged 30.8% during the month.
Tesla Inc’s (NASDAQ:TSLA) product lineup is showing signs of stagnation, with over 95% of sales still coming from the Model 3 and Model Y. Meanwhile, competitors are rolling out more advanced models. According to Reuters, Tesla’s market share in Europe is slipping as legacy automakers like BMW post stronger sales. Chinese competitor BYD is also gaining ground in Europe, despite talk of tariffs.
Polen Focus Growth Strategy stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its Q4 2024 investor letter:
“The largest relative detractors in the quarter were Tesla, Inc. (NASDAQ:TSLA) (not owned), Thermo Fisher Scientific, and Broadcom (not owned). We’ve spoken at length about our rationale for not owning Tesla. The stock enjoyed a 54% return during the quarter, with effectively all of the share price performance strength coming in the post-election period, as the market expressed a positive view on Elon Musk’s prominent role in the incoming Trump administration and its potential implications for Tesla. While we agree this development should be a net positive for Tesla and recognize the company’s interesting future prospects for autonomous driving and humanoid robots, its current valuation demands that shareholders pay primarily for potential innovations that have yet to materialize, with uncertain risks and timelines, presenting a different type of risk profile than we are comfortable with. Today, Tesla is an automobile manufacturer limited to the higher-income segment and is increasingly challenged to sell vehicles when interest rates are not zero. As such, we continue to question the company’s long-term growth profile, its ability to scale a large robotaxi service (which seems to be the source of euphoria in Tesla shares), and its corporate governance.”
3. Broadcom Inc (NASDAQ:AVGO)
Number of Hedge Funds Investors: 128
Steven Dickens from HyperFRAME Research explained in a latest program on Schwab Network why he is bullish on Broadcom Inc (NASDAQ:AVGO).
“We’re starting to see some of the macro trends play out here. Obviously, the VIX is up, there’s a lot of volatility, and people are worried about some of the tariffs and some of the posture. But I think what I track from a Broadcom perspective is: are they exposed to the right markets, have they got that product innovation cycle rolling, and are they executing? I think on all three of those, I give them a 10 out of 10. This company’s firing on all cylinders. Hock Tan is certainly starting to step up to be one of what I describe as the mag 8, we are gonna see this company continue to grow.”
Broadcom threw it out of the park with its latest quarterly results. The most important part of the report? The company expects strong AI semiconductor sales growth to continue. It sees AI semiconductor revenue of about $4.4 billion in fiscal Q2, which would be a 42% year-over-year growth. Broadcom reported $6 billion in free cash flow for the quarter. Its software business gross margin came in at about 90%. But what’s Broadcom’s moat? It makes ASIC, chips designed for specific applications and tasks. As major companies look for custom chips to break Nvidia monopoly and lower costs, Broadcom is positioned well to thrive. Many top AI spenders are teaming up with Broadcom to develop these chips, which are expected to be high-margin, high-volume products, potentially driving substantial growth in both revenue and profits.
Broadcom Inc (NASDAQ:AVGO) continues to be a leader in the AI ASCI and networking chips market. Broadcom Inc (NASDAQ:AVGO) has 3nm AI ASIC chip deals with Alphabet and Meta in addition to many other tech giants aiming massive spending for AI hyperscaling.
Columbia Threadneedle Global Technology Growth Strategy stated the following regarding Broadcom Inc. (NASDAQ:AVGO) in its Q4 2024 investor letter:
“Broadcom Inc. (NASDAQ:AVGO) soared after the company reported quarterly results in December that defied expectations and further solidified the company’s already compelling AI narrative. The technology infrastructure powerhouse with leading positions across wireless, data center networking, AI semiconductors and infrastructure software reported strong results, including the usual prodigious cash flow generation, resulting in a double-digit increase to its dividend. More importantly, investors cheered the increased clarity concerning the company’s AI market opportunity, now estimated at $60 to $90 billion by 2027, up from $15 to $20 billion in 2024. This sizable uptick — and increased confidence provided by the management team about the AI opportunity — drove a re-rating in the stock and the company’s market cap eclipsed $1 trillion in value.”
2. Apple Inc (NASDAQ:AAPL)
Number of Hedge Funds Investors: 158
Jim Cramer in a latest program on CNBC discussed Citi’s recent downgrade of Apple Inc (NASDAQ:AAPL) following the iPhone maker’s announcement that it’s delaying Siri upgrade.
“I think we now have to think about Apple. The reason why is because Citi has a mid-quarter update today, lowering estimates on a delayed Siri upgrade. What happens with something like this is people just say, “All right, they’re going to push out something that we didn’t think was going to be ready anyway and push it out till next year.” It becomes a great excuse to sell, especially because the stock is up 38% over one year and is only down 2% now. Do I think this is the right time to sell? I don’t know. People look at these things, they have baskets, and this stock has been the rock. There’s nothing near term that is so great.”
Apple’s latest quarterly results were helped by Services revenue in the latest quarter, but the key challenges haunting the company remain as they were. Many analysts believe just a few AI apps would not be enough to trigger a broader upgrade cycle for iPhone. Apple is dealing with currency headwinds as the stronger US dollar is expected to reduce top-line growth by 2.5% next quarter. For Q2 FY2025, management expects overall revenue to grow in the low to mid-single digits. Apple’s stock is trading at a premium valuation, with a price-to-earnings ratio of 39-40x, a price-to-free-cash-flow ratio of 33-34x, and a PEG ratio exceeding 3x. Upcoming quarters would be difficult for Apple and its current valuation is not justified.
Tsai Capital stated the following regarding Apple Inc. (NASDAQ:AAPL) in its Q4 2024 investor letter:
“We initiated our investment in Apple Inc. (NASDAQ:AAPL) in 2016 and elevated it to a core holding in 2018, the same year the company introduced its redesigned 13-inch and 15-inch MacBook Pro models. Under Tim Cook’s visionary leadership, Apple has consistently redefined innovation in hardware and software.
The September 2024 launch of the iPhone 16, with its groundbreaking AI capabilities, including enhanced image generation tools, marks another inflection point. We believe this transformative device is the foundation for an AI-driven supercycle and could entice approximately 100 million consumers to upgrade, reinforcing Apple’s leadership in the industry.
Today, Apple’s ecosystem spans over two billion active devices, supported by a rapidly-growing base of subscription services. This strategy has helped to turbocharge customer engagement and spending. In the most recent fiscal year, which ended in September 2024, Apple’s high-margin services division accounted for 39.3% of total gross profits, up from 32.8% just two years ago.
Apple’s financial footing remains exceptional, with approximately $50 billion in net cash and marketable securities. Looking ahead, we expect earnings-per-share growth to outpace revenue growth, driven by margin expansion and continued share buybacks.”
1. NVIDIA Corp (NASDAQ:NVDA)
Number of Hedge Funds Investors: 193
LikeFolio’s Megan Brantley said in a latest program on Schwab Network that her data shows an increased consumer interest in NVIDIA Corp (NASDAQ:NVDA) products and she believes the company is gaining momentum:
“I think that Nvidia has performed so well it’s natural for investors to say, “Okay, how much can this growth keep going at this pace, and at what point is this overvalued?” At these levels, we can look at things and the places that we can look for Nvidia are overall consumer demand. So, are people continuing to talk about Nvidia and its products—specifically its Blackwell line—at a higher rate, and are they visiting sites and showing signs of forward-looking interest for Nvidia? So far, at least in our metrics, they are. We see Nvidia web visits up by about 22% year-over-year, and this is actually accelerating if you look at this on a 30-day moving average versus a 90-day moving average. What’s impressive about this for us is that this is just a sign of momentum. For us, this tells us that demand is continuing to outpace supply. We look at this too, and what’s crazy is that Nvidia already has a really significant market share versus other players in this field, yet its growth rate remains the highest. It is nice to see AMD start to gain some traction there as well when it comes to consumer interests, but Nvidia is already the largest player in the game and it’s just extending its lead. So I think as an investor, that’s really powerful to know that this is the best of breed. At least on our end, the chatter and discussions related to its products continue to grow.”
However, web visits does not seem like a good indicator to gauge Nvidia AI chips demand.
The market will keep punishing Nvidia for not coming up to its gigantic (and sometimes unrealistic) growth expectations. About 50% of the company’s revenue comes from large cloud providers, which are rethinking their plans amid the DeepSeek launch and looking for low-cost chips. Nvidia’s Q1 guidance shows a 9.4% QoQ revenue growth, down from the previous 12% QoQ growth. Its adjusted margin is expected to be down substantially as well to 71%. Market does not like when Nvidia fails to post a strong quarterly beat. The stock will remain under pressure in the coming quarters when the company will report unimpressive growth.
Nvidia is facing challenges at several levels. Competition is one of them. Major competitors like Apple, Qualcomm, and AMD are vying for TSMC’s 3nm capacity, which could limit Nvidia’s access to these chips. Why? Because Nvidia also uses TSMC’s 3nm process nodes. Nvidia is also facing direct competition from other giants that are deciding to make their own chips. Amazon, with its Trainium2 AI chips, offer alternatives. Trainium2 chips could provide cost savings and superior computational power, which could shift AI workloads away from Nvidia’s offerings. Apple is reportedly working with Broadcom to develop an AI server processor. Intel is also trying hard to get back into the game with Jaguar Shores GPU process, set to be produced on its 18A or 14A node.
RiverPark Large Growth Fund stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q4 2024 investor letter:
“NVIDIA Corporation (NASDAQ:NVDA): NVDA was a top contributor in the fourth quarter following blowout 1Q results and guidance driven by strong data center sales (+427% year-over-year). The company reported revenue of $26 billion, up 262% year-over-year, and EPS of $6.12, up 462% year-over-year and 9% ahead of expectations. Revenue guidance for 2Q of $28 billion was 5% above very high expectations. The artificial intelligence arms race, kicked off by ChatGPT and Alphabet’s Bard, among others, has generated tremendous demand for Nvidia’s next generation graphic processors.
NVDA is the leading designer of graphics processing units (GPU’s) required for powerful computer processing. Over the past 20 years, the company has evolved through innovation and adaptation from a predominantly gaming-focused chip vendor to one of the largest semiconductor/software vendors in the world. Over the past decade, the company has grown revenue at a compound annual rate of over 20% while expanding operating margins and, through its asset light business model, producing ever increasing amounts of free cash flow. Following recent results, Jensen Huang, founder and CEO of NVIDIA stated in the company’s press release, “a trillion dollars of installed global data center infrastructure will transition from general purpose to accelerated computing as companies race to apply generative AI into every product, service and business process.”
While we acknowledge the potential of NVIDIA Corporation (NASDAQ:NVDA), our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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