In this article, we discuss the 10 best slow growth stocks to buy according to hedge funds.

The United States Department of Commerce recently released advanced estimates for the Gross Domestic Product (GDP) growth in the country during the third quarter, revealing that the real GDP increased at an annual rate of 2.6% between June and September. The number compares favorably to the 0.6% drop in the GDP during the second quarter of 2022 and the 1.6% decline registered between January and March. 

Prominent growth stocks like Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN) have been buoyed by the new figures despite a recently announced interest rate hike by the Federal Reserve. The latest GDP figures reflect a rise in exports, consumer spending, nonresidential fixed investment, federal government spending, and state and local government spending. 

Eric Winograd, the director of developed market economic research at AllianceBernstein, recently told news publication Financial Times that the GDP data should give the Fed confidence that what they are doing is going to have an effect. The numbers also give credence to claims from top experts that the US economy is strong enough to avoid a recession, soothing investor concerns around a market crash and boosting growth stocks that have been battered in an uncertain macro environment. 

Our Methodology

We selected growth stocks that have strong chances to see their share price grow in the coming months and years. We call them “slow” growth stocks because their growth could be slow and face headwinds in the short term due to the current macroeconomic situation and recession fears. However, these stocks have long-term growth catalysts and positive ratings from market experts. These stocks are popular among the 895 hedge funds tracked by Insider Monkey.

Best Slow Growth Stocks to Buy According to Hedge Funds

10. Etsy, Inc. (NASDAQ:ETSY)

Number of Hedge Fund Holders: 29  

Etsy, Inc. (NASDAQ:ETSY) operates two-sided online marketplaces that connect buyers and sellers. It is one of the best growth stocks to invest in. On September 24, Etsy advised their sellers to update their return policies by the end of October, noting there are certain types of listings where returns are not appropriate. On September 26, Etsy said it was giving coupons of 20% off to their customers to increase their sales and encourage customers to shop more.

On October 10, BTIG analyst Marvin Fong maintained a Buy rating on Etsy, Inc. (NASDAQ:ETSY) stock and lowered the price target to $119 from $122, noting that the company’s Q3 gross merchandise volume guidance had upside and 6% sequential growth. 

At the end of the second quarter of 2022, 29 hedge funds in the database of Insider Monkey held stakes worth $595.9 million in Etsy, Inc. (NASDAQ:ETSY), compared to 43 in the preceding quarter worth $668.5 million. 

Just like Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN), Etsy, Inc. (NASDAQ:ETSY) is one of the best growth stocks to buy now according to hedge funds. 

In its Q2 2022 investor letter, Oakmark Funds, an asset management firm, highlighted a few stocks and Etsy, Inc. (NASDAQ:ETSY) was one of them. Here is what the fund said:

“We became interested in Etsy (NASDAQ:ETSY) when Josh Silverman took over as CEO in 2017. The company had long been recognized as a great marketplace, but prior management was not focused on maximizing shareholder value. In short order, Silverman transformed Etsy from a borderline non-profit into a higher-margin, faster-growing enterprise. The pandemic helped accelerate already strong fundamental business results as millions of new customers were introduced to the platform while stuck at home. But like so many other Covid-19 “winners,” Etsy has since fallen deeply out of favor with investors, which prompted us to take a closer look. Following a 75% decline in its stock price, the company now trades for 3.5x next year’s revenue or just a low double-digit multiple of operating profit using our estimate of normalized margins. We believe this is an attractive price to pay for a unique digital marketplace with a long runway for future growth. Note that our exposure to Etsy is currently established via options.”

9. Intel Corporation (NASDAQ:INTC)

Number of Hedge Fund Holders: 65  

Intel Corporation (NASDAQ:INTC) engages in the design, manufacture, and sale of computer products and technologies worldwide. It is one of the top growth stocks to invest in. On October 14, Intel Corporation stated that it is planning to start the sales of its first six 13th Generation Core Raptor Lake processors in India for desktops with unlocked multipliers in the third week of October. It will include 23 models comprising Raptor Lake and Alder Lake silicon. 

On October 18, Deutsche Bank analyst Ross Seymore maintained a Hold rating on Intel Corporation (NASDAQ:INTC) stock and lowered the price target to $32 from $35, noting that the advisory expects a decline in 2023 estimates for the firm. 

At the end of the second quarter of 2022, 65 hedge funds in the database of Insider Monkey held stakes worth $2.5 billion in Intel Corporation (NASDAQ:INTC), compared to 76 in the preceding quarter worth $3.2 billion. 

In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Intel Corporation (NASDAQ:INTC) was one of them. Here is what the fund said:

“Then, there is the case of Intel Corporation (NASDAQ:INTC). A blue-chip tech champion with a market capitalization of over $500 billion in early 2000, the stock was trading at a P/E multiple of 42. It was a fast-growing company whose stock price and multiple declined more or less in line with its peers. However, unlike Google, Intel’s net income has grown from $7.3 billion in 1999 to $19.9 billion in 2021, a compounded annual growth rate of just 4.7%. Its growth from the dot com era has not proven to be durable, and Intel has yet to trade at the price it attained in 1999.”

8. Broadcom Inc. (NASDAQ:AVGO)

Number of Hedge Fund Holders: 66 

Broadcom Inc. (NASDAQ:AVGO) designs, develops and supplies various semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor-based devices and analog III-V-based products worldwide. It is one of the premier growth stocks to invest in. On October 11, Broadcom added that it has partnered up with Artista, a computer network company, to announce the availability of the industry’s first open end-to-end networking solution optimized for Remote Direct Access over Coverage Ethernet.  

On October 18, Deutsche Bank analyst Ross Seymore maintained a Hold rating on Broadcom Inc. (NASDAQ:AVGO) stock and lowered the price target to $575 from $635, noting that there was negative risk to 2023 projections for the second straight quarter. 

Among the hedge funds being tracked by Insider Monkey, Washington-based firm Fisher Asset Management is a leading shareholder in Broadcom Inc. (NASDAQ:AVGO) with 1.4 million shares worth more than $716 million. 

In its Q2 2022 investor letter, Carillon Tower Advisers, an asset management firm, highlighted a few stocks and Broadcom Inc. (NASDAQ:AVGO) was one of them. Here is what the fund said:

“Tech stocks, including Broadcom Inc. (NASDAQ:AVGO), were one of the hardest-hit sectors due to fears over a weakening macroeconomic environment. Broadcom, however, outperformed semiconductor peers as its end-market exposures provided relatively more defensive characteristics.”

7. Oracle Corporation (NYSE:ORCL)

Number of Hedge Fund Holders: 69      

Oracle Corporation (NYSE:ORCL) offers products and services that address enterprise information technology environments worldwide. It is one of the elite growth stocks to invest in. On October 17, Oracle announced its collaboration with TechSee, a member of the Oracle Partner Network, to bring the next generation of visual and AI-powered service automation to Oracle Field Service to provide augmented reality guidance to agents and technicians’ mobile devices over an instant video stream.

On October 21, KeyBanc analyst Michael Turits upgraded Oracle Corporation (NYSE:ORCL) stock to Overweight from Sector Weight with a $80 price target, noting that the company laid out a plan to mid-40s margins and multiyear high single-digit revenue growth recently. 

At the end of the second quarter of 2022, 69 hedge funds in the database of Insider Monkey held stakes worth $4.2 billion in Oracle Corporation (NYSE:ORCL), compared to 61 in the previous quarter worth $4.3 billion.

In its Q2 2022 investor letter, First Eagle Investment Management, an asset management firm, highlighted a few stocks and Oracle Corporation (NYSE:ORCL) was one of them. Here is what the fund said:

“Oracle Corporation (NYSE:ORCL) is one of the world’s largest independent enterprise software companies and has been reinventing itself for the cloud-computing environment, a transition pursued primarily through investments in organic research and design and smallish, well-priced acquisitions. That said, Oracle in June closed its largest-ever deal with the acquisition of Cerner, a designer of software to store and analyze medical records and other healthcare data.

Oracle took on additional debt to finance this all-cash acquisition and as a result, plans to moderate its stock-buyback program to focus on debt reduction. Despite the weak quarter for the stock, Oracle’s operations remain strong; it reported better-than-expected results for its most recent quarter and issued upbeat guidance for the coming fiscal year.”

6. Block, Inc. (NYSE:SQ)

Number of Hedge Fund Holders: 72  

Block, Inc. (NYSE:SQ) creates tools that enable sellers to accept card payments and provides reporting and analytics, and next-day settlement. It is one of the major growth stocks to invest in. On September 28, Block’s Square offered a Tap to Pay option on iPhones to millions of sellers in the US through its Point-of-Sale iOS app which allows the sellers to accept contactless payments directly from their iPhones by opening the Square POS app. 

On October 19, Jefferies analyst Trevor Williams maintained a Buy rating on Block, Inc. (NYSE:SQ) stock and lowered the price target to $70 from $105, highlighting the continued underperformance since the Q2 report that has driven the valuation near the March 2020 trough. 

Among the hedge funds being tracked by Insider Monkey, St. Petersburg, Florida-based investment firm ARK Investment Management is a leading shareholder in Block, Inc. (NYSE:SQ) with 9.1 million shares worth more than $799.5 million. 

Along with Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN), Block, Inc. (NYSE:SQ) is one of the best growth stocks to buy now according to hedge funds. 

In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Block, Inc. (NYSE:SQ) was one of them. Here is what the fund said:

“Block, Inc. (NYSE:SQ) provides point-of-sale technology to small businesses and operates the Cash App ecosystem of financial services for individuals. Shares fell due to mixed quarterly results with more modest growth in the Seller business offsetting strength in Cash App. While the integration of recently acquired Afterpay is progressing well and credit metrics remain healthy, the buy-now-pay-later business slowed due to greater competitive intensity. We continue to own the stock due to Block’s long runway for growth, sustainable competitive advantages, and unique corporate culture.”

5. Datadog, Inc. (NASDAQ:DDOG)

Number of Hedge Fund Holders: 81     

Datadog, Inc. (NASDAQ:DDOG) provides a monitoring and analytics platform for developers, information technology operations teams, and business users in the cloud in North America and internationally. It is one of the best growth stocks to invest in. On October 19, Datadog stated the general availability of Cloud Cost Management. Cloud Cost Management is used to show an organization’s cloud spending in the context of their observability data. Now FinOps and engineering teams can automatically attribute spending to applications, teams and services. 

On October 20, BTIG analyst Gray Powell maintained a Buy rating on Datadog, Inc. (NASDAQ:DDOG) stock and lowered the price target to $104 from $137, noting that elevated concerns on the potential for a weakening economic environment would drive a slowdown in spending growth of the firm.

At the end of the second quarter of 2022, 81 hedge funds in the database of Insider Monkey held stakes worth $2.7 billion in Datadog, Inc. (NASDAQ:DDOG), compared to 82 in the previous quarter worth $4.9 billion.

In its Q1 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Datadog, Inc. (NASDAQ:DDOG) was one of them. Here is what the fund said:

“Another example is Datadog, Inc. (NASDAQ:DDOG), the leading infrastructure monitoring, application performance monitoring and log management software platform. Datadog’s stock declined 15% during the quarter, despite reporting sparkling operational results, with revenues accelerating to a growth rate of 84% year-over-year with 33% free cash flow margins while guiding for 2022 significantly above expectations. Datadog added 4,600 new customers in the quarter while existing customers continued to increase their spending on Datadog products at a rapid pace with the number of customers using four or more products increasing to 33% from 22% last year. While Datadog’s stock was down, its intrinsic value has undoubtedly increased. This is enabled by rapid innovation (Datadog released 13 new products in 2021) into a market that is benefiting from the secular growth in the cloud, digital transformation, and the explosion in complexity as the number of vendors, diversity of technologies and related infrastructure continued to expand.”

4. Apple Inc. (NASDAQ:AAPL)

Number of Hedge Fund Holders: 128     

Apple Inc. (NASDAQ:AAPL) designs, manufactures and markets smartphones, personal computers, tablets, wearables, and accessories. It is one of the top growth stocks to invest in. On October 20, Apple cut prices on refurbished units of some older iPad models alongside the introduction of updates for the iPad Pro and iPad lines. The company also reduced refurbished prices for some other product lines.

On October 17, Morgan Stanley analyst Erik Woodring maintained an Overweight rating on Apple Inc. (NASDAQ:AAPL) stock and lowered the price target to $177 from $180, noting that company valuation multiples are lowered amid a challenging setup for Q3.

At the end of the second quarter of 2022, 128 hedge funds in the database of Insider Monkey held stakes worth $143 billion in Apple Inc. (NASDAQ:AAPL), compared to 131 in the previous quarter worth $182 billion.

In its Q2 2022 investor letter, Alger Capital, an asset management firm, highlighted a few stocks and Apple Inc. (NASDAQ:AAPL) was one of them. Here is what the fund said:

“Apple Inc. (NASDAQ:AAPL) is a leading technology provider in telecommunications. computing and services. Apple’s iOS operating system is the company’s unique intellectual property and competitive strength. This software drives extremely tight engagement with consumers and enterprises. The engagement is fostering the growing purchase of high-margin services like music, apps, and apple pay. Apple’s shares detracted from performance as management lowered its guidance for the second quarter due to headwinds from the war in Ukraine, adverse foreign currency shifts, and dampened consumer demand associated with the coronavirus in China. Additionally, many investors were concerned that lockdowns implemented to curtail the spread of COVID-19 would impact the production of apple products, however, the manufacturing facilities have resumed activity.”

3. Mastercard Incorporated (NYSE:MA)

Number of Hedge Fund Holders: 137    

Mastercard Incorporated (NYSE:MA) is a technology company that provides transaction processing and other payment-related products and services. It is one of the elite growth stocks to invest in. On October 20, Mastercard noted the expansion of its partnership with Jack Henry, a payment processing service provider and technology company, to enable banks and credit unions to provide their account holders with the ability to securely see all of their financial accounts in one place. 

On October 19, Jefferies analyst Trevor Williams maintained a Buy rating on Mastercard Incorporated (NYSE:MA) stock and lowered the price target to $350 from $410, noting that the company expects a bigger Q3 beat.

At the end of the second quarter of 2022, 137 hedge funds in the database of Insider Monkey held stakes worth $14.99 billion in Mastercard Incorporated (NYSE:MA), compared to 136 in the previous quarter worth $15.4 billion.

In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Mastercard Incorporated (NYSE:MA) was one of them. Here is what the fund said:

“The Fund’s holdings in the Payments and Information Services themes also contributed to relative performance. Within Payments, lower exposure to this lagging theme and outperformance of Mastercard Incorporated (NYSE:MA) added the most value. These global payment networks are viewed as safe havens during market downturns but are also benefiting from resilient payment volumes and a sharp rebound in international travel.”

2. Visa Inc. (NYSE:V)

Number of Hedge Fund Holders: 166  

Visa Inc. (NYSE:V) operates as a payments technology company worldwide. It is one of the premier growth stocks to invest in. On October 20, Current, a leading US financial technology platform, stated an announcement that it has successfully migrated to the Visa DPS Forward platform with seamless migration of over four million accounts. This integration will allow a deeper partnership between both companies.

On October 19, Jefferies analyst Trevor Williams maintained a Buy rating on Visa Inc. (NYSE:V) stock and lowered the price target to $220 from $250, noting that the company’s initial FY23 outlook is likely to push estimates lower.  

At the end of the second quarter of 2022, 166 hedge funds in the database of Insider Monkey held stakes worth $24 billion in Visa Inc. (NYSE:V), compared to 159 in the preceding quarter worth $28 billion.

In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Visa Inc. (NYSE:V) was one of them. Here is what the fund said:

“The Fund’s holdings in the Payments and Information Services themes also contributed to relative performance. Within Payments, lower exposure to this lagging theme and outperformance of Visa, Inc. (NYSE:V). These global payment networks are viewed as safe havens during market downturns but are also benefiting from resilient payment volumes and a sharp rebound in international travel.”

1. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 258     

Microsoft Corporation (NASDAQ:MSFT) develops, licenses, supports software, services, devices, and solutions worldwide. It is one of the major growth stocks to invest in. On October 20, Microsoft was said to be in advanced discussions for a new funding round for OpenAI. No agreement has been reached and the funding amount could be changed. On October 17, Microsoft confirmed the cutdown of 1,000 employees from its different companies like Xbox and Azure.

On October 20, UBS analyst Karl Keirstead maintained a Buy rating on Microsoft Corporation (NASDAQ:MSFT) stock and lowered the price target to $300 from $330, noting that the company reduced its constant-currency revenue growth estimate to 12.2% from 12.6%.

At the end of the second quarter of 2022, 258 hedge funds in the database of Insider Monkey held stakes worth $56 billion in Microsoft Corporation (NASDAQ:MSFT), compared to 259 in the previous quarter worth $65.6 billion.

In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Microsoft Corporation (NASDAQ:MSFT) was one of them. Here is what the fund said:

“Shares of Microsoft Corporation (NASDAQ:MSFT), a leading global provider of software solutions, declined 16.6% in the quarter along with the broader software group as well as due to growing concerns of a potential macro-driven slowdown. This is despite the company posting strong quarterly financial results and successfully absorbing headwinds from the war in Ukraine. The company had 21% revenue growth, 23% operating income growth, and 35% growth in Microsoft Cloud (all year-over-year in constant currency), which now represents 47% of total revenues. (read more…)

You can also take a peek at 10 Best Bargain Stocks To Buy Right Now and 10 Best Infrastructure Stocks To Buy Now.

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Disclosure. None. 10 Best Slow Growth Stocks to Buy According to Hedge Funds is originally published on Insider Monkey.