In this article, we will take a detailed look at the Top 10 Stocks to Watch Ahead of May.
Aswath Damodaran from NYU Stern School of Business said in a latest interview with CNBC that while investors are “celebrating” positive results of a few major tech companies, the problems haunting these firms will take a while to show up in their results. However, Damodaran, also known as ‘Dean of Valuation,’ said it won’t be prudent to “give up” entirely on Mag. 7 companies.
“They can consolidate their advantage. In a weird way, again, all these troubles might play into the hands of the Mag 7, because the more troubles there are, the more flexibility gets rewarded. And as you pointed out, these companies are incredibly flexible, incredibly adaptable. We saw that with COVID, we saw that in 2022 with inflation, and I’m convinced you’re going to see it again. Doesn’t mean you load up on the Mag 7, but if you’ve never owned them, you had a chance to buy into at least one or two of them in the last month. You might have missed that chance, but the chance was there. So I wouldn’t give up that easily on the Mag 7.”
Damodaran said investors experienced a lot of “trauma” in April. He argued against reactionary investing and said that when investors respond to daily events and news cycles, they damage their portfolios.
“Maybe the best thing investors could have done is left at the start of the month, gone somewhere without internet service, and come back at the end of the month. Because everything we do is reactive, and often when you’re reacting to day-to-day events, you’re going to end up doing more damage to your portfolio than helping.”
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 Wall Street analysts are talking about as the chaotic month of April nears its close. With each stock, we have mentioned its latest 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).
Stock market reports printed on a sheet of paper. Photo by RDNE Stock Project on Pexels
10. Barrick Gold Corp (NYSE:GOLD)
Number of Hedge Funds Investors: 42
Jim Cramer in a latest program on CNBC said he likes Barrick Gold Corp (NYSE:GOLD):
“A gold company is—I mean, I hate to just say this because it really doesn’t take a weatherman to know which way the wind blows, does it—but gold, I think, is going higher still. Barrick Gold has a lot more room to run. I think it’s doing better. I wish they weren’t so far-flung. But I think GOLD is a good place to be.
Ariel Focus Fund stated the following regarding Barrick Gold Corporation (NYSE:GOLD in its Q4 2024 investor letter:
“Lastly, gold mining company, Barrick Gold Corporation (NYSE:GOLD) fell following an investor day where management reduced five-year guidance for gold production and raised cost estimates. Meanwhile, a dispute with the African government of Mali and associated negative headlines created an overhang on shares. Despite ongoing uncertainty, management remains laser focused on upgrading its mining operations and broadly improving efficiencies amid today’s rising prices for precious metals. The company also continues to prioritize capital returns to shareholders via dividends and share repurchases. At current valuation levels, we believe the risk/reward is priced in.”
9. United Parcel Service Inc (NYSE:UPS)
Number of Hedge Funds Investors: 43
A United Parcel Service Inc (NYSE:UPS) investor recently asked Jim Cramer on a call during a program on CNBC about his thoughts on the logistics company. Cramer told the caller to be “careful.”
“I do think that you’re going to run into a little trouble because world trade is not what we think it is. And look, I really like FedEx, and I’m not just sitting here pounding the table for FedEx either. So we got to be careful, but I appreciate your call. We got to be careful.”
River Road Large Cap Value Select Fund stated the following regarding United Parcel Service, Inc. (NYSE:UPS) in its Q4 2024 investor letter:
“As of December 31, the portfolio held 29 positions, up four positions from Q3. During Q4, the largest sector increase was 736 bps within industrials, while the largest decrease was -276 bps within consumer discretionary. We established five new positions and eliminated one position
We also initiated a position in United Parcel Service, Inc. (NYSE:UPS) (Cl B) (UPS, 3.0 conviction), the world’s largest package delivery company, which handles over six billion packages annually and can reach 90% of the world’s gross domestic product (GDP) within a day. After years of elevated network investments to expand capacity, UPS has refocused its strategy on growing return on invested capital (ROIC). We believe the stock will rerate higher as margins, which we believe have bottomed, are expected to expand with the price per package growing faster than the cost per package. In the interim, investors collect a 5% dividend, which has grown in 21 out of 24 years since UPS went public. The dividend is supported by healthy free cash flow and an investment grade balance sheet with ~1x net leverage.”
8. Simon Property Group Inc (NYSE:SPG)
Number of Hedge Funds Investors: 48
Jim Cramer in a latest program on CNBC said Simon Property Group Inc (NYSE:SPG) has some tariff exposure but still recommended the stock:
“They have some exposure because they have some retail, but you know what, I’ve got to tell you—they are a terrific company. Got a 5.7% yield. I think Simon Property should be bought, and bought right here.”
Here is what Baron FinTech Fund has to say about S&P Global Inc. (NYSE:SPGI) in its Q3 2023 investor letter:
“Shares of rating agency and data provider S&P Global Inc. gave back some gains from earlier this year due to investor concerns that rising interest rates will weigh on future debt issuance and asset-based fees. Management also removed its 2026 revenue target for the ESG segment due to a more uncertain regulatory landscape and political climate. On a positive note, S&P Global reported strong second quarter financial results, with 7% adjusted revenue growth and 11% EPS growth as ratings issuance returned to growth for the first time in six quarters. Management maintained fullyear guidance as a more favorable outlook for the Ratings and Indices segments offset slower growth in the Market Intelligence segment. We continue to own the stock due to the company’s long runway for growth and significant competitive advantages.”
7. Target Corp (NYSE:TGT)
Number of Hedge Funds Investors: 49
Jim Cramer was recently asked about Target Corp (NYSE:TGT). The CNBC host recommended caution amid the impact of tariffs:
“It’s down 30%. It sells at 10 times earnings, but the tariffs are going to hurt it. And I think their pricing is not reasonable enough, and that makes me reluctant to pound the table. I’ve got a lot of stocks where there’s questionable stuff, and I can’t pound the table on them. If anything’s questionable, everything’s got to be totally buttoned down.”
Carillon Eagle Growth & Income Fund stated the following regarding Target Corporation (NYSE:TGT) in its Q4 2024 investor letter:
“Target Corporation (NYSE:TGT) missed earnings dramatically. The company’s sales were positive, but margins were disappointing due to higher expenses. While traffic was up, prices were down; consumers continued to seek value and shop during promotional periods. A one-time decision to re-route inventory ahead of the East Coast port strike also explains a large part of the company’s performance.”
6. McDonald’s Corp (NYSE:MCD)
Number of Hedge Funds Investors: 60
Jim Cramer in a latest program on CNBC mentioned a positive analyst report on McDonald’s Corp (NYSE:MCD) and made some bullish comments about the stock:
“Very rarely do you get this, but BTIG has this note that I just absolutely loved. It said, “Our recent McDonald’s franchise checks conveyed a sharp inflection in April sales trends, more optimistic tone from operators, Minecraft promo helping to regain some big McDonald’s momentum.” This is it, David. This is what you’re looking for. You’re looking for a story—ironclad. No tariff. Numbers look up. Stock chart is good. There you go.”
Carillon Eagle Growth & Income Fund stated the following regarding McDonald’s Corporation (NYSE:MCD) in its Q3 2024 investor letter:
“McDonald’s Corporation (NYSE:MCD) performed well as it met the expectations of investors looking for improvements in relative market share trends. The company’s introductions of menu items at premium- and medium-price tiers are picking up pace, allowing it to capture value more effectively.”
5. Walmart Inc (NYSE:WMT
Number of Hedge Funds Investors: 88
CFRA’s Arun Sundaram said in a recent program on Schwab Network that Walmart Inc (NYSE:WMT) is among the big-box retailers that can absorb the impact of tariffs:
“We do think that Walmart and Costco have more levers to offset tariff risks. For Walmart, you know, first and foremost, Walmart is predominantly a food retailer in the US. 60% of Walmart’s US sales is grocery. It also makes, grows, or assembles about two-thirds of its goods in the US, so it only has about one-third of its mix is imported. But of that one-third of imports, China and Mexico are the two biggest import partners. So, there is some risk related to tariffs, but I think one big offset is the fact that Walmart is rapidly growing some of these newer alternative revenue streams. Think like digital advertising, which is a much higher margin business than selling grocery. And so, if they continue to grow this digital advertising business at a much faster rate than grocery, that’s good for overall margins. And so, it can probably absorb some tariff headwinds in its grocery business or its discretionary merchandise business if it continues to grow like, for example, its digital advertising.”
4. Tesla Inc (NASDAQ:TSLA)
Number of Hedge Funds Investors: 99
OptionsPlay’s Tony Zhang said in a recent program on Schwab Network that Tesla Inc (NASDAQ:TSLA) valuation is still high as the company faces market share challenges across the globe:
“There’s still significant downside from where we currently sit, and this is all on the back of the fact that, you know, the valuations still look incredibly rich, you know, on Tesla, whether you look at it on a multiple of earnings or multiple of revenue. Especially in an environment where deliveries have disappointed, you know, production has fell quite a substantial amount here for Q1, and we’re heading into a market environment that just is quite challenging for the EV market, especially as, you know, the Chinese competitors have continued to eat market share away from Tesla across almost all of the major markets that Tesla competes in, you know, especially Europe, Asia, and now even here in the US and Australia.”
Tesla’s EV sales are falling all over the world as the company faces challenges from competitors. Even if Elon Musk increases his focus to fix the company’s problems, it would take a lot of effort to come out of the demand crisis. 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, either. 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 (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.
Aristotle Atlantic Large Cap Growth Strategy stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its Q1 2025 investor letter:
“The underweight in Tesla, Inc. (NASDAQ:TSLA) contributed to performance in the first quarter of 2025. Tesla’s automobile sales declined in the quarter, in part due to factory changeovers that were required for updates to the company’s best-selling vehicle, the Model Y. This resulted in slower sales volume in the quarter. Competition from China’s BYD is causing market share losses for Tesla in several non-U.S. markets. The CEO’s position as an advisor to President Trump has damaged Tesla’s brand image among a cohort of traditional electric vehicle buyers.”
3. NVIDIA Corp (NASDAQ:NVDA)
Number of Hedge Funds Investors: 193
Kevin Hincks from TD Ameritrade said in a program on Schwab Network earlier in April that NVIDIA’s Corp (NASDAQ:NVDA) demand remains strong
“I think the Blackwell numbers for the fourth quarter last year were way better than expected. I think there’s still everyone, Tom, there’s no cracks in the demand story for NVIDIA Corp (NASDAQ:NVDA) and chips in general. Everyone is confirming that demand is crazy. OpenAI just—or yeah, OpenAI ChatGPT—they just confirmed their demand is still strong. So I just think there’s so many things, and Tom, here’s my question that I used to say about Tesla a lot, now I say about NVIDIA Corp (NASDAQ:NVDA): what’s in their pipeline? We know the Rubin chips are in their pipeline, and I’ll give investors, our viewers, one thought—what if they have a Palantir story, Tom? What if they take something that’s general to hyperscalers and make it for the general public? What if they start doing that? Think of what that could do to their demand, right? And so what’s the next generation of what NVIDIA Corp (NASDAQ:NVDA) is doing? Jensen Huang, really smart guy, is good at what he does. And so I think this is a sell-off with the rest of the market, a little bit heightened because of the popularity of NVIDIA Corp (NASDAQ:NVDA).”
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, set to be produced on its 18A or 14A node.
Alger Spectra Fund stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q1 2025 investor letter:
“NVIDIA Corporation (NASDAQ:NVDA) is a leading supplier of graphics processing units (GPUs) for a variety of end markets, such as gaming, PCs, data centers, virtual reality, and high-performance computing. The company is leading in most secular growth categories in computing, and especially artificial intelligence and super-computing parallel processing techniques for solving complex computational problems. In our view, Nvidia’s computational power is a critical enabler of AI and therefore essential to AI adoption. During the quarter, shares detracted from performance due to several factors. In January 2025, investor concerns grew regarding the emergence of advanced AI models from China, reportedly developed at lower costs and with reduced computing requirements, raising doubts about Nvidia’s market dominance. Additionally, U.S. President Donald Trump’s announcement of new tariffs targeting industries increased worries about higher operational costs. Despite these headwinds, Nvidia reported robust fiscal fourth-quarter results, highlighted by significant revenue growth driven by its data center segment. On the earnings call, CEO Jensen Huang emphasized the increasing computational requirements of future AI models, noting, “The more computation, the more the model thinks, the smarter the answer,” and adding that future reasoning models could demand substantially more compute resources. We believe Nvidia’s leadership in scaling AI infrastructure—including advancements in inference and reasoning during inference—continues to drive adoption among enterprises and startups, ensuring sustained demand for its high performance chips and software solutions. As older-generation chips are repurposed and new clusters deployed, we see Nvidia as well-positioned to capitalize on rising computational needs across AI applications.”
2. Taiwan Semiconductor Co Ltd (NYSE:TSM)
Number of Hedge Funds Investors: 158
Doug Clinton from Intelligence Alpha said in a recent program on Schwab Network that his AI models “like” Taiwan Semiconductor (NYSE:TSM) and explained some reasons behind his bullish view on the stock:
“The reason I think that our models like TSM is number one, you think about it from a valuation perspective. The stock has had a tough year so far, as have many chip stocks, and if you look at the forward earnings, we’re trading at about 16 times forward PE. That’s below the midpoint of the 10-year range for TSM, so valuation-wise, we’re in a reasonable place. But number two, structurally, you just think about TSM as a company and AI in general. Any chip builder who is making these leading-edge chips, they have to use TSM. There’s really no alternative, and so I think from a monopolistic standpoint, it’s a great business trading at a cheap valuation. I think it’ll be rocky from here because there’ll be more tariff news, but I still think you want to own it over a longer time period.”
Middle Coast Investing stated the following regarding Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its Q1 2025 investor letter:
“Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is the company we own with the most obvious geopolitical risk, and we cut our position in half. I know that if Taiwan-China flares up the damage will extend much wider, but TSM would seem to be the first domino there. And it’s not as if Taiwan is having an easy time of it with the current U.S. administration.”
1. Meta Platforms Inc (NASDAQ:META)
Number of Hedge Funds Investors: 235
Jeffrey Small from Arbor Financial said in a recent program on Schwab Network that Meta Platforms Inc (NASDAQ:META) valuation is low.
“I think Meta just recently had its best quarter in history. I don’t expect them to have a significant decrease in earnings going forward. I see the long-term picture of at least 20% earnings from their AI investments as a growth rate. That’s definitely one you want to buy at a discount today. It’s trading at 21 times earnings. I mean, it’s epically low.”
Meta crushed expectations with the last quarterly results but yet again pointed to higher expenses in the future. In 2025, it sees total operating expenses in a range of $114-$119 billion, with 19-25% y/y growth. Capex is expected to rise 61-74% y/y to $60-$65 billion, compared to just $37.3 billion in FY24. Advertising rose strongly but analysts believe it should be seen in the context of higher political ad spend and holiday quarter perspective. In 2025, the company might not be able to keep reporting double-digit growth in ad pricing amid weaker consumer spending and a cautious macroeconomic backdrop.
In the long term, Meta shares are expected to grow because of AI. How?
Meta Platforms (NASDAQ:META) is driving usage and ads revenue by improving its algorithms and user experience thanks to AI. Meta Platforms (NASDAQ:META)’s advancements in Reels and WhatsApp are helping manage CapEx growth as the company strives to stay competitive in AI. Meta Platforms (NASDAQ:META)’s substantial user base of 3.3 billion provides a data and distribution edge that could capture a significant share of the GenAI market.
Nightview Capital stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its Q4 2024 investor letter:
“Core Opportunity: Meta Platforms, Inc.’s (NASDAQ:META) platforms—Instagram, Facebook, WhatsApp, and Messenger—reach nearly half the world’s population daily, making it one of the most powerful advertising ecosystems globally. With investments in AI and augmented reality (AR), we believe Meta is also creating significant optionality for long-term growth.
Competitive Advantage: Thriving Core Platforms: In Q3, we saw Meta achieve a 23% YoY revenue growth,—a testament to strong user engagement across its ecosystem. The advertising landscape as a whole continues to evolve and we believe Meta’s existing platforms offer a defined advantage in this new world. Existing platforms in the age of AI continue to be the most powerful indicator of future success in our opinion.
AI Leadership: Meta’s AI capabilities and the Llama AI model are driving efficiency and product innovation. In our view, these assets have been under-appreciated by the market while enhancing Meta’s ability to further scale and innovate its leading advertising business…” (Click here to read the full text)
While we acknowledge the potential of Meta Platforms Inc (NASDAQ:META) 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. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than META but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also look at the 10 Stocks on Analysts’ Radar Amid Tariff Turbulence and the 10 Stocks in Wall Street’s Watchlist.
