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.”
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In
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.”
4. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Funds Investors: 116
Jackson Ader, Analyst at KeyBanc Capital Markets, explained in a latest program on CNBC why he continues to be bullish on Salesforce Inc (NYSE:CRM) following the latest quarterly report. The analyst has a $440 price target on the stock.
“I really like that Salesforce has a very specific use case in the front office. It’s not—it’s very easily definable. I would like this sales agent to give me a hundred new leads. I would like this marketing agent to write me some marketing copy so that I can send an automated email to a certain targeted list. The difference here is that Salesforce has very definable use cases, definable agents that can be deployed quickly, and then they also have the data underlying it in the Salesforce Data Cloud, where the agents can actually become very smart and use the Data Cloud as the retrieval-augmented generation model to then go out and do smart things, rather than a blanket of “I’m going to help you do your knowledge work with it,” which is sometimes what some of their other competitors are trying to roll out.”
Mar Vista Global Quality Strategy stated the following regarding Salesforce, Inc. (NYSE:CRM) in its Q4 2024 investor letter:
“Investors cheered a solid fiscal year Q3 performance from Salesforce, Inc. (NYSE:CRM), with results driven by strength in subscription revenues, current remaining performance obligations (CRPO), and operating margin. Both the Sales and Service Clouds returned to double-digit growth, fueled by strong adoption of multi-cloud and vertical-specific solutions. These results highlight Salesforce’s ability to address diverse customer needs and sustain growth across its core offerings.
Management expressed significant excitement about Agentforce, an organically developed generative AI product that is garnering enthusiasm from both system integrator partners and customers alike. This innovation underscores Salesforce’s commitment to delivering innovative solutions that enhance customer engagement and drive productivity. While Agentforce’s contributions to subscription revenues and CRPO bookings are still immaterial for now, the growing pipeline provides a solid foundation for optimism around Salesforce’s ability to productize and monetize its generative AI offerings.”
3. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Funds Investors: 193
Chris Caso, Wolfe Research senior analyst, said in a latest program on CNBC that while NVIDIA Corp (NASDAQ:NVDA) quarterly beat was not as impressive as it used to be in the past, the company can still see more growth in the future on the back of a potential increase in compute demand.
“One of the things that I thought was interesting, and Jensen brought it up in the spot you had about Deep Seek, is the move to reasoning models where the AI actually thinks itself. It doesn’t have the answer itself, but it could figure it out using a couple of steps. You know, what they said was that actually uses 10 times the compute power for inference, for actually running the models, and it does appear that that’s going to be one of the drivers as well.”
Caso said his price target for NVIDIA Corp (NASDAQ:NVDA) is $180 and that takes into account the possible revenue slowdown the company will see in the coming quarters.
“It’s a big gain, and even that just only factors in some deceleration of revenue growth, about, you know, in the 30s next year. So, you know, and that’s what’s compelling about Nvidia as an investment right now because you’re not seeing a bubble valuation, you’re seeing a really reasonable valuation on a company that’s been growing like crazy.”
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%. The 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, offers 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.
Brown Advisors Global Leaders Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q4 2024 investor letter:
“The main driver of our 2024 relative underperformance was not being invested in NVIDIA Corporation (NASDAQ:NVDA). Since ChatGPT introduced the power of generative artificial intelligence to the world on 30 November 2022, the Global Leaders Strategy has outperformed its benchmark despite being underweight the USA and specifically underweight the “Magnificent Seven”.7 2024 underperformance of -2.81% versus our benchmark was almost precisely matched by the individual outperformance of NVIDIA, which we did not own. On balance the rest of the portfolio is doing just fine albeit with areas of strength (AI) and weakness (EM financials) discussed below.
We wrote about the concentration within global indexes last year and this continued with only 29% of companies within the ACWI Index at the start of 2024 outperforming this benchmark over the year. Our capital allocation added value in 2024 as five of our top ten largest weights over the year were also in our top ten percentage winners. Conversely, within our ten worst performers, seven were also amongst our smallest ten weights. Capital allocation is critical when index hit rates are below 50%…” (Click here to read the full text)
2. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Funds Investors: 235
Charles Schwab’s Jeff Pierce in a latest program on Schwab Network discussed reports saying Meta Platforms Inc (NASDAQ:META) is planning to launch a standalone AI app. He believes the company is trying to compete directly with ChatGPT.
“They’re certainly wanting to compete with ChatGPT, one of the most downloaded AI applications out there. But, of course, you’ve got Google with their Gemini, you’ve got Bing, you’ve got Microsoft Copilot, all of those, you know, in that competitive space for this AI investment. Now, we know on the investment side of it, Meta has decided to spend about 60 to 65 billion in capex this year to support these AI efforts, as well as the rest of their business. That’s a huge increase from last year—about 39 billion was spent last year. Investors have shown some concern over that spending in AI across many of these names. However, it does seem to be paying off. We saw Meta had about a 14% rise in their average price per ad in Q4, compared to just a 2% rise in Q4 of 2023. So, we’re seeing some pickup that seems to be related to these AI pushes out of the company.”
Rowan Street Capital stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its Q4 2024 investor letter:
“Meta Platforms, Inc. (NASDAQ:META): Investment Initiated: April 2018: Internal Rate of Return (IRR*): 22% *IRR represents the annualized rate of return on an investment, accounting for the timing and magnitude of cash flows over the holding period.
For META, our 22% IRR aligns closely with the company’s compounded growth in earnings per share (EPS) and free cash flow per share during the 6 years holding period.
Looking ahead, Meta is expected to grow its revenues, earnings, and free cash flow per share at mid-teens rates over the next two years. There’s a good possibility that it could exceed these estimates, considering the breadth of growth initiatives currently in place, such as advancements in Al, monetization of Reels, expansion into business messaging, and the ongoing development of the metaverse…” (Click here to read the full text)
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Funds Investors: 286
During a recent interview, Brian Nowak, Morgan Stanley senior analyst, talked about Amazon.com Inc (NASDAQ:AMZN) smart home capabilities after the company’s latest event.
“What we’re seeing out of Amazon is now the next phase of what could be more agentic capabilities coming out of Amazon, really coming out of Alexa. I thought Andy Jassy did a great job explaining new sources of consumer utility and new use cases for customers that could ultimately drive more utility, more engagement, more consumer spend, and ultimately more monetization for Amazon. To me, the thing to watch here is, number one, it’s very notable that if you’re a Prime member, you’re going to get access to the Alexa Plus capabilities as part of your Prime membership—that was better than expected. And then, number two, the fact that all of the current Echo devices are going to be backward and forward compatible with this really opens up the available number of people who could use these new capabilities pretty quickly,” he said.
Mar Vista Global Quality Strategy stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q4 2024 investor letter:
“Amazon.com, Inc.’s (NASDAQ:AMZN) profitability was the key highlight of the third quarter financial results, with AWS and International Retail achieving record operating margins, and North America Retail posting its second-best margin in five years. Even more impressive was the fourth quarter operating income forecast, projecting up to $20 billion, significantly exceeding the expected $16 billion and suggesting a record 11% margin. This exceptional performance was driven by economies of scale, logistics efficiencies, successful AI implementations, increasing ad revenue, and accelerated AWS growth.
We keep our investment in Amazon due to several factors: AWS growth has further potential, Amazon Prime Video monetization is in its initial stages, and the company is expanding into promising sectors like Pharmacy and Logistics. Furthermore, with strengthening profitability and cash reserves exceeding $100 billion, the possibility of substantial capital returns increases. By continuing to innovate and invest in technologies like AI and cloud computing, Amazon is well-positioned to keep its competitive edge.”
While we acknowledge the potential of Amazon.com, Inc. (NASDAQ:AMZN) as an investment, 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 time frame. If you are looking for an AI stock that is more promising than AMZN 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.
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