In this article, we will look at the 10 Best Cheap Stocks to Buy for Beginners.
On June 2, Ben Snider, chief U.S. equity strategist at Goldman Sachs, appeared on CNBC’s ‘Squawk on the Street’ to talk about the latest market trends and the firm’s S&P 500 target, among other things.
He was of the view that this is an incredibly dynamic market environment, with lots of uncertainty. But it is important to note that one way the market has dealt with uncertainty, not just this year but the last few years of the AI boom, is to really focus on near-term visible earnings. That means that if earnings strength continues, and his view is that it will, the market should continue to move higher.
READ ALSO: Top 10 Undervalued Blue Chip Stocks Analysts Recommend for Smart Investing AND 10 Best Tech Stocks Under $5 to Buy.
Talking about his S&P numbers for this year and the next, Snider stated that he has 24% earnings growth this year and 13% next year. He believes there is a concentrated group delivering the increase, with half of the earnings growth being driven by the AI infrastructure beneficiaries alone. He added that if you look at a bottom-up basis, one can argue that just two or three of the largest semiconductor companies are accounting for over a third of that growth.
With these broader market trends in view, let’s look at the best cheap stocks to buy for beginners.
Our Methodology
We used the Finviz stock screener to identify the best stocks for beginners with a forward P/E below 15. We then selected the top 10 stocks most popular among hedge funds as of Q1 2026, using the hedge fund sentiment data from Insider Monkey’s database. The stocks are arranged in ascending order of hedge fund sentiment.
Note: All data was recorded on June 3.
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. Insider Monkey’s quarterly newsletter strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
10 Best Cheap Stocks to Buy for Beginners
10. Toyota Motor Corporation (NYSE:TM)
Number of Hedge Fund Holders: 20
Toyota Motor Corporation (NYSE:TM) is one of the best cheap stocks to buy for beginners. Toyota Motor Corporation (NYSE:TM) announced on June 3 that Toyota Racing will conduct the first public demonstration drives of its liquid hydrogen-fuelled TR LH2 Racing Prototype in the build-up to the 94th edition of the Le Mans 24 Hours next week. The company further reported that the TR LH2 Racing Prototype is based on the same chassis as the TR010 Hybrid Hypercar, which is set to compete in the Le Mans 24 Hours on 13-14 June, and is intended to advance the development of hydrogen technology in motorsports.
In a separate development, Reuters reported on May 28 that, according to a report by Toyota Motor Corporation (NYSE:TM) released on Thursday, the company’s global vehicle sales dropped for a third consecutive month in April, hit primarily by sharp declines in the Middle East and China. It further clarified that global sales fell 3.1% from the prior year period to 849,306 vehicles, while overseas sales dropped 7.5%. However, sales in Japan grew 24.2%, rebounding after earlier purchase delays that took place ahead of an environmental tax change.
Toyota Motor Corporation (NYSE:TM) manufactures and sells motor vehicles and parts. The company’s operations are divided into the following segments: Automotive, Financial Services, and All Other.
9. Novartis AG (NYSE:NVS)
Number of Hedge Fund Holders: 31
Novartis AG (NYSE:NVS) is one of the best cheap stocks to buy for beginners. Novartis AG (NYSE:NVS) announced on June 3 new Cosentyx® data in polymyalgia rheumatica showing a statistically significant, clinically meaningful difference in sustained remission rates compared to placebo, and significant steroid sparing. Management reported that the Phase III REPLENISH data highlighted that the effect of Cosentyx treatment was sustained through week 52 in this investigational use, with the data published simultaneously in the New England Journal of Medicine and presented at the 2026 European Alliance of Associations for Rheumatology (EULAR) Congress.
Novartis AG (NYSE:NVS) further reported that the REPLENISH trial met all primary and secondary endpoints across both Cosentyx 300mg and 150mg treatment arms, including complete sustained remission and time until patients needed additional treatment through week 52. It also stated that no new safety signals were identified in PMR patients receiving Cosentyx. Prof Christian Dejaco, Director, Dept of Rheumatology, South Tyrol Health Trust, Bruneck, Italy, stated that they are “encouraged by the REPLENISH trial results which showed that Cosentyx, with its known safety profile, can reduce flares in the longer term while lowering patients’ steroid exposure.”
Headquartered in Basel, Switzerland, Novartis AG (NYSE:NVS) develops, markets, and manufactures a range of healthcare and pharmaceutical products, and is also involved in immuno-oncology research. Its operations span the Innovative Medicines, Sandoz, and Corporate segments.
8. The Toronto-Dominion Bank (NYSE:TD)
Number of Hedge Fund Holders: 33
The Toronto-Dominion Bank (NYSE:TD) is one of the best cheap stocks to buy for beginners. Scotiabank lifted the price target on The Toronto-Dominion Bank (NYSE:TD) to C$165 from C$150 on June 1 and maintained an Outperform rating on the shares. The company also received a rating update from Barclays on May 29, with the firm lifting the price target on The Toronto-Dominion Bank (NYSE:TD) to C$140 from C$135 while maintaining an Underweight rating on the shares. The rating updates came after the bank reported financial results for fiscal Q2 2026.
In its financial results for the quarter ended April 30, 2026, The Toronto-Dominion Bank (NYSE:TD) announced that reported diluted earnings per share were $2.43, compared with $6.27 in the prior year period, while adjusted diluted earnings per share were $2.38, compared to $1.97 in fiscal Q2 2025. Reported net income for the quarter was $4,251 million, compared with $11,129 million, with the adjusted net income reaching $4,168 million, compared with $3,626 million in the prior year period.
The Toronto-Dominion Bank (NYSE:TD) provides financial products and services. Its operations are divided into the following segments: Canadian Personal and Commercial Banking, U.S. Retail, Wealth Management and Insurance, Wholesale Banking, and Corporate segment.
7. Amgen Inc. (NASDAQ:AMGN)
Number of Hedge Fund Holders: 65
Amgen Inc. (NASDAQ:AMGN) is one of the best cheap stocks to buy for beginners. Amgen Inc. (NASDAQ:AMGN) announced on June 1 that the European Commission granted marketing authorization for IMDYLLTRA® (tarlatamab) as a monotherapy for the treatment of adults with extensive-stage small cell lung cancer who require systemic therapy following disease progression on or after first-line treatment with platinum-based chemotherapy. Management reported that the approval was based on results from DeLLphi-304, which is the first global Phase 3 trial to exhibit a significant survival benefit over chemotherapy in this setting.
Jean-Charles Soria, senior vice president of Oncology at Amgen Inc. (NASDAQ:AMGN), stated that IMDYLLTRA is the first and only T-cell engager therapy approved to treat small cell lung cancer, and the approval by the European Commission marks a critical step forward for patients in Europe.
Amgen Inc. (NASDAQ:AMGN) further reported that DeLLphi-304, the global Phase 3 clinical trial, showed that “IMDYLLTRA reduced the risk of death by 40% and significantly extended median overall survival (OS) by more than five months compared to standard of care (SOC) chemotherapy as a treatment for patients with ES-SCLC who progressed on or after one line of platinum-based chemotherapy”.
Amgen Inc. (NASDAQ:AMGN) is a biotechnology company that discovers, develops, manufactures, and markets human therapeutics. It delivers new therapies for patients with complex cancers, especially in areas with significant unmet needs.
6. AT&T Inc. (NYSE:T)
Number of Hedge Fund Holders: 72
AT&T Inc. (NYSE:T) is one of the best cheap stocks to buy for beginners. Oppenheimer upgraded AT&T Inc. (NYSE:T) to Perform from Outperform on June 3, saying that the firm believes longer-term broadband subscriber growth and, eventually, mobile is at risk from the growing threat of satellite LEO constellations. It added that while AT&T Inc. (NYSE:T) has the most broadband exposure relative to telco peers, it is less exposed than the cable service providers. Oppenheimer also stated that it is set to build 7M new fiber passings this year, as well as 5M annually thereafter to get to 60M-plus total locations by 2030. According to the firm, the penetration will disappoint, and AT&T Inc. (NYSE:T) may stop at 50M homes.
In a separate development, In a separate development, AT&T Inc. (NYSE:T) announced on May 14 a joint agreement with T-Mobile and Verizon to form a new JV aimed at helping end wireless dead zones in the United States, which includes rural areas. The JV plans to do so by pooling limited spectrum resources to raise capacity, enhance customer experience, and help satellite providers to reach more customers through a unified platform. Management reported that the JV remains subject to negotiations between the parties to reach definitive agreements, as well as to satisfying customary closing conditions.
AT&T Inc. (NYSE:T) provides telecommunications and technology services and operates through the Communications and Latin America segments. Its Communications segment offers wireline telecom, wireless, and broadband services in the US and globally, while the Latin America segment manages services in Mexico.
5. AbbVie Inc. (NYSE:ABBV)
Number of Hedge Fund Holders: 87
AbbVie Inc. (NYSE:ABBV) is one of the best cheap stocks to buy for beginners. AbbVie Inc. (NYSE:ABBV) announced on June 2 that the European Commission approved AQUIPTA® for the acute treatment of migraine in adults with or without aura, to be taken as needed. Management stated that the approval marks the second indication for AQUIPTA in the European Union, an oral calcitonin gene-related peptide receptor antagonist. It now holds approval as both an acute treatment option for migraine attacks in adults and as a once-daily preventive treatment option for adults with chronic or episodic migraine who experience four or more migraine days per month.
In another development, AbbVie Inc. (NYSE:ABBV) announced on May 29 authorization by the European Commission (EC) for an expanded label for VENCLYXTO® to include use in combination with acalabrutinib (with or without obinutuzumab), along with use in combination with ibrutinib to treat adult patients with previously untreated chronic lymphocytic leukemia (CLL). Management stated that the expanded label follows the EC’s inclusion of these combinations in the acalabrutinib and ibrutinib labels, with all-oral, fixed-duration combination regimens supporting the current standards of care.
AbbVie Inc. (NYSE:ABBV) is a research-based pharmaceutical company that develops and sells products to treat chronic diseases in oncology, gastroenterology, rheumatology, dermatology, virology, and various other serious health conditions.
4. Merck & Co., Inc. (NYSE:MRK)
Number of Hedge Fund Holders: 98
Merck & Co., Inc. (NYSE:MRK) is one of the best cheap stocks to buy for beginners. Moderna, Inc. and Merck & Co., Inc. (NYSE:MRK) announced on June 1 detailed results from a planned five-year follow-up analysis of the Phase 2b randomized KEYNOTE-942/mRNA-4157-P201 study evaluating intismeran autogene in combination with KEYTRUDA® in patients with high-risk melanoma following complete resection. Intismeran autogene is an investigational mRNA-based individualized neoantigen therapy, while KEYTRUDA® is Merck’s anti-PD-1 therapy.
The company reported that Intismeran autogene in combination with KEYTRUDA exhibited an encouraging trend toward overall survival in an exploratory analysis compared to KEYTRUDA alone. It added that at “median 5-year (60.3 months) planned follow-up of the Phase 2b KEYNOTE-942/mRNA-4157-P201 study, intismeran autogene in combination with KEYTRUDA demonstrated a 49% reduction in the risk of recurrence or death and a 59% reduction in the risk of distant metastasis or death compared to KEYTRUDA alone”.
In a separate development, Merck & Co., Inc. (NYSE:MRK) announced on May 26 that its Board of Directors declared a quarterly dividend of $0.85 per share of the company’s common stock for fiscal Q3 2026, with payments set to be made on July 8, 2026, to shareholders of record at the close of business on June 15, 2026.
Merck & Co., Inc. (NYSE:MRK) is a biopharmaceutical company that delivers health solutions to advance the treatment and prevention of diseases in animals and people. Its Pharmaceutical segment offers vaccines and human health pharmaceutical products, typically therapeutic and preventive agents. Its Animal Health segment develops, discovers, manufactures, and markets a range of vaccines and veterinary pharmaceutical products. The company’s medicine KEYTRUDA may treat certain cancers by working with the immune system.
3. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 101
Salesforce, Inc. (NYSE:CRM) is one of the best cheap stocks to buy for beginners. Salesforce, Inc. (NYSE:CRM) announced on June 3 the signing of a definitive agreement to acquire Contentful, which is a leading composable content platform that delivers personalized digital experiences at scale. Management stated that the acquisition would bolster the company’s Headless 360 with a native, enterprise-grade content layer connecting customer data with engaging content experiences across Salesforce, Inc.’s (NYSE:CRM) leading applications. It added that by leveraging Data 360, Agentforce, and Contentful’s composable APIs, global enterprises can be capable of seamlessly deliver personalized, AI-assembled experiences at scale across every channel.
In a separate development, Salesforce, Inc. (NYSE:CRM) received a rating update from BMO Capital on May 28. The firm lowered the price target on the stock to $215 from $225 and maintained an Outperform rating on the shares following the company’s fiscal Q1 results. The firm told investors in a research note that the results and guidance are not likely to be sufficient to convince either bears or bulls to switch sides, and that offer limited changes to FY27 top-line growth expectations.
Salesforce, Inc. (NYSE:CRM) designs and develops cloud-based enterprise software for customer relationship management. Its solutions encompass customer service and support, sales force automation, digital commerce, marketing automation, collaboration, community management, industry-specific solutions, and Salesforce platforms. It also offers training, guidance, support, and advisory services.
2. Sandisk Corporation (NASDAQ:SNDK)
Number of Hedge Fund Holders: 114
Sandisk Corporation (NASDAQ:SNDK) is one of the best cheap stocks to buy for beginners. Morgan Stanley raised the price target on Sandisk Corporation (NASDAQ:SNDK) to $1,750 from $1,100 on June 3 and maintained an Overweight rating on the shares. The firm told investors that there is “no quick fix to the memory shortage” that is going to drive what could be two to three more years, or longer, of tight supply conditions in memory. It also stated that although memory stocks were strong in 2025 and have continued to pace the market again in 2026. Morgan Stanley does not believe that “the run of strong performance is over”.
Sandisk Corporation (NASDAQ:SNDK) also received a rating update from Susquehanna on May 29, with the firm lifting the price target on the stock to $3,250 from $2,000 while maintaining a Positive rating on the shares. The firm stated that its checks suggest Q2 DRAM average selling prices are trending to be up 50%-60% quarter-over-quarter, ahead of expectations of up 50%. Meanwhile, NAND ASPs are trending unchanged at up 75-100% quarter-over-quarter.
Sandisk Corporation (NASDAQ:SNDK) is involved in the development, manufacture, and provision of storage devices and solutions based on NAND flash technology. The company’s products include solid-state drives, memory cards, and USB flash drives.
1. Micron Technology, Inc. (NASDAQ:MU)
Number of Hedge Fund Holders: 154
Micron Technology, Inc. (NASDAQ:MU) is one of the best cheap stocks to buy for beginners. On June 3, Morgan Stanley lifted the price target on Micron Technology, Inc. (NASDAQ:MU) to $1,050 from $520, maintaining an Overweight rating on the shares and stating that there is “no quick fix to the memory shortage” that is going to drive what could be two to three more years, or longer, of tight supply conditions in memory. It also stated that although memory stocks were strong in 2025 and have continued to pace the market again in 2026, Morgan Stanley does not believe that “the run of strong performance is over”.
In another development, Susquehanna lifted the price target on Micron Technology, Inc. (NASDAQ:MU) to $1,750 from $600 on May 29 and maintained a Positive rating on the shares. Susquehanna lifted estimates for memory manufacturers under its coverage, driven by growing confidence in the sustainability of the margin profile and the continued strength in blended ASPs.
Micron Technology, Inc. (NASDAQ:MU) provides innovative memory and storage solutions. Its operations are divided into the following segments: Compute and Networking Business Unit (CNBU), Mobile Business Unit (MBU), Embedded Business Unit (EBU), and Storage Business Unit (SBU).
READ NEXT: 15 Stocks That Will Make You Rich in 10 Years AND 12 Best Stocks That Will Always Grow.
Disclosure: None. Follow Insider Monkey on Google News.
