In this article, we will take a detailed look at the Top 10 Stocks on Analysts’ Radar These Days.
Fundstrat’s Tom Lee said in a recent program on CNBC that he is still optimistic about the stock market despite recent selloffs. Here is how he explained some of the reasons behind his rationale:
“I can understand why investors are sitting on their hands. I mean, they don’t really know how severe these tariffs are going to be or how long they’ll last. But now we’re seeing a big price correction and a decline in sentiment. Then something like today happens—we get a bad ADP jobs report, and the market is actually up. So we’re rising on bad news, which is a good sign that a lot of bad news is already priced in.”
Lee believes the market’s near-term bottom is close as he talked about the importance of staying invested during the “best days.”
“In my mind, we put out a piece yesterday just talking about the 10 best days that happen every year. Last year, for instance, the 10 best days added up to 21 percentage points of the S&P. Without those 10 days, the market was only up 4%. So, you know, you don’t get 20% years because it’s good throughout the year—it’s just the 10 best days. I think the setup for a 10 best day is near because if the economy’s near stall speed, I think people realize the Trump put does come back because otherwise it has to unwind all this austerity. And if the job market’s soft, the Fed put comes back into play because the Fed doesn’t want to deal with stall speed.I think that’s what’s going to be the positive catalyst in the next couple of weeks. On top of that, we already know stocks will bottom before bad news peaks. So if we’re seeing the market not fade on bad news, it means we’ve already priced in a lot of things that would normally scare us.”
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For this article, we picked 10 stocks currently trending on the latest news. With each stock we have mentioned the number of hedge fund investors. 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. Bath & Body Works Inc (NYSE:BBWI)
Number of Hedge Funds Investors: 36
Lorraine Hutchinson, BofA Securities senior retail analyst, explained in a latest program on CNBC why she’s bullish on BBWI despite the selloff after the company’s latest earnings.
“The guidance came in a little bit below consensus, not because of tariffs, though. So the two reasons why the guidance came in below where we were expecting are, number one, they only put about half of the buybacks into the guide that we were expecting. What this means is they’ll have $300 million of dry powder, which they can use to either buy back stock or pay down debt as the year goes on. The second thing is some incremental IT investments that we didn’t have in our model for the back half of the year. Both of those things, to me, are easily fixable. I think what is important here, and I think what’s interesting about the stock today, is it’s sitting at a 10 P/E, there’s a 10% free cash flow yield, they talked about the quarter being off to a great start, and they guided sales growth positive for the first time in several years. So we think this is a great buying opportunity today on the weakness.”
9. HP Inc (NYSE:HPQ)
Number of Hedge Funds Investors: 42
Senior markets correspondent George Tsilis said in a latest program on Schwab Network that HP Inc (NYSE:HPQ) is becoming a value and income story.
“It’s trading around nine times forward earnings, so it’s already priced relative to basically flat growth in terms of sales and earnings, at best in the low to mid-single digits. I think the expectations for this company aren’t necessarily about growth—it really comes down to value and income. They do produce sufficient income to sustain their dividend, which is approximately $1.16 per share. If you look at earnings estimates for fiscal year 2025, prior to the reported earnings, it’s around $3.59, and for 2026, it’s $3.75. So for what it’s worth, it’s not showing significant topline sales or earnings growth, but it’s not a bad business if you consider it as an investment. You just have to be aware that it’s more of an income investment rather than a growth story. However, given the rising demands of artificial intelligence, many older CPUs—those from the past two to five years—may be outdated considering the increased computing power requirements AI brings.”
Greenlight Capital stated the following regarding HP Inc. (NYSE:HPQ) in its Q2 2024 investor letter:
“In addition to gold, we had four material winners in our long portfolio this quarter. HP Inc. (NYSE:HPQ) jumped from $30.22 to $35.02. After seven quarters of declines, PC sales turned marginally positive during the quarter. The industry appears to be in the early stages of an upcycle, perhaps to be enhanced by recently launched AI-enabled PCs that are expected to ramp up over the next several quarters.”
8. Coherent Corp (NYSE:COHR)
Number of Hedge Funds Investors: 51
Jefferies recently said in a note that it expects data center growth to drive higher networking demand as artificial intelligence pushes for faster interconnect speeds.
In this context, the firm started coverage of Coherent (NYSE:COHR) with a Buy rating.
“The bull thesis for COHR is not some flashy technology transition driving share, in fact it is quite the opposite,” Jefferies analysts, led by Blayne Curtis, wrote in a note. “COHR is dominant in the current transceiver market at 400G (and should be at 800G), but has been dragged down by a litany of failed acquisitions, restructuring, and unnecessary spending across the board.”
The analyst noted the company is confident that it can produce a 200G VCSEL product while growing its EML/SiPho business.
Jefferies cut its price target on Coherent Corp (NYSE:COHR) to $110 from $135.
Invesco Small Cap Value Fund stated the following regarding Coherent Corp. (NYSE:COHR) in its Q3 2024 investor letter:
“Coherent Corp. (NYSE:COHR): This laser company develops and manufactures optoelectronic components and devices used in the communications, electronics and industrial markets. The company has been benefiting from growing awareness of an improved growth outlook driven by artificial intelligence (AI), given that its optical transceivers are key enablers for networking of AI servers.”
7. Dell Technologies Inc (NYSE:DELL)
Number of Hedge Funds Investors: 60
Jim Kelleher from Argus said in a latest program on Schwab Network that Dell Technologies Inc (NYSE:DELL) AI catalysts are growing.
“Their participation in the AI server business—that’s really servers, racks, networking—doesn’t include their storage business. They are the biggest storage company in the world, and storage is a lagging indicator. I think they could get a minimum of 1 billion. They’re going to do about 18 billion in storage revenue this year, and you know, low single-digit percentage of that’s going to be AI. That’s going to grow over time, and eventually, AI will drive a lot of storage revenue. They’re really one of the leaders in the AI PCs. They have a unique model. They look like the old Hewlett-Packard in that they have both infrastructure for enterprise and a PC business, along with a peripherals business. So, they can bundle that. They’re very focused on commercial PCs, and that lends itself to the AI PC market. So, their overall AI exposure is bigger than the 15 billion I would say, and it’s kind of growing. So, there are positives in the story.”
Carillon Scout Mid Cap Fund stated the following regarding Dell Technologies Inc. (NYSE:DELL) in its Q2 2024 investor letter:
“Dell Technologies Inc. (NYSE:DELL) was a top contributor despite reporting disappointing first-quarter earnings results, because investors looked through the near-term disappointment and expected strong growth from AI-related servers and personal computers. We expect Dell to participate in the growth of artificial intelligence hardware, especially as enterprises invest more aggressively. We like the company’s depth and breadth of products and services, as well as its focus on keeping costs low.”
6. Snowflake Inc (NYSE:SNOW)
Number of Hedge Funds Investors: 71
Jim Cramer in a latest program on CNBC praised Snowflake Inc (NYSE:SNOW) and said the stock is rising because the company is seeing growth that the market expects.
“They have what we really want out of a company—24% revenue growth and a good forecast. And it’s a reminder that there are ways. Why is NVIDIA not up 20%? Why is Marc Benioff’s Salesforce not up? Well, that’s growing at 9%, while this is growing at the level people want. And I got to hand it to Sridhar Ramaswamy because he took this company over not that long ago from Frank Slootman. Yes, it had a little bit of a dip, but now it’s back. And Frank always said it would be back—that’s just the business.”
Baron Global Advantage Fund stated the following regarding Snowflake Inc. (NYSE:SNOW) in its Q3 2024 investor letter:
“Snowflake Inc. (NYSE:SNOW) is a leading cloud data platform predominantly used for data analytics. Shares fell 15.2% in the third quarter due to a cybersecurity incident, a shifting competitive landscape, a change in leadership, and general macro complexities which are pressuring customer IT budgets. With generative AI (Gen AI) front and center, both investors and customers are closely evaluating Snowflake’s positioning in the future data ecosystem. Databricks and other competitors whose core users are data scientists who are also key buyers of Gen AI technologies, are benefiting. In addition, while Snowflake’s product innovation push should fuel future growth, it may also lead to short-term headwinds to profitability. Management reported healthy demand for its core data analytics, evidenced by solid growth rates among current customers alongside new go-to-market initiatives that could support growth. We are optimistic the new CEO, Sridhar Ramaswamy, can lead the company towards an AI-centric strategy, and therefore remain shareholders.”
5. Tesla Inc (NASDAQ:TSLA)
Number of Hedge Funds Investors: 99
Anthony Sassine, Senior Investment Strategist at Kraneshares, said in a latest program on CNBC that Tesla Inc (NASDAQ:TSLA) shares are falling partly due to the impact of Elon Musk’s “misguided” steps at the company and his involvement in political activity.
“Because of Elon Musk’s activity in Tesla over the past few years, I think there’s been a series of misguided strategic initiatives. One of them is the focus on the Cybertruck and not focusing enough on a cheaper car with Tesla. This hasn’t allowed it to be competitive and compete with the new upcoming car companies. I think not having that cheaper car is definitely weighing down on sales today. And then add to that all the news flow that is coming from Elon Musk’s involvement in politics and the backlash from investors and buyers in the US and Europe.”
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.
Baron Partners Fund stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its Q4 2024 investor letter:
“Tesla, Inc. (NASDAQ:TSLA) designs, manufactures, and sells electric vehicles, related software and components, and solar and energy storage products. Shares rose on growth in the energy segment, the promise of new model launches in 2025, and increasing investor confidence in Tesla’s AI initiatives. Despite macroeconomic challenges, delivery data in major markets like China have shown considerable improvement. The energy and automotive segments demonstrated stronger-than-expected profitability. Tesla also expanded its advanced computing center in Texas, released improved version of its software-enhanced driving solution, and is set to launch new mass market vehicles years after the initial rollouts of Models 3 and Y. Expectations of deregulation under the incoming administration point to the potential acceleration of new technology rollouts, which could enhance Tesla’s leadership position in real world AI and bolster investor confidence that Tesla will benefit from these large and attractive growth opportunities.”
