In this article, we discuss 10 best stocks to buy for the next three months.

Element Capital, one of the largest macro hedge funds in the world managed by Jeffrey Talpins, plans to reduce its asset base in order to boost its performance following a series of poor returns. The fund, which currently manages around $12 billion in assets and has a strong long-term track record, suffered a significant loss of 9.6% last month as equity markets surged on the expectation that interest rates would not rise further. In response, Element Capital will make it easier for investors to exit the fund by temporarily relaxing its redemption terms, a move aimed at reducing the firm’s assets to increase its agility and ability to react quickly to market changes. 

In January, certain hedge funds encountered difficulties due to the rally in equities, particularly speculative stocks that were heavily impacted in the previous year. Additionally, bond markets also experienced gains due to the expectation that central banks were effectively controlling inflation. As a result, funds that were positioned for higher interest rates, including computer-driven funds that were betting on declines in bond and equity prices, suffered significant losses.

On the other hand, there were clear winners in the stock market as well. Said Haidar, the founder of Haidar Capital Management, had a strong belief that inflation was going to rapidly increase globally, which is evident by the figure of $63 billion – the amount of assets that the hedge fund reported at the beginning of 2022. However, the hedge fund’s actual assets were only $1.2 billion due to extensive leverage. This resulted in a tumultuous year with a significant increase of 54% in one month, and a decrease of 20% in another. Nevertheless, the hedge fund generated a return of 193% for its investors. Haidar made a substantial bet on the rapid rise of interest rates, leading the hedge fund to profit from the rise in inflation that led to the most combative central bank tightening campaign. Haidar personally earned $859 million in 2022, which ranks him sixth on Bloomberg’s annual list of the top hedge fund managers. While the list is dominated by industry sharks, Haidar is a relatively unknown name. The top three spots were claimed by Ken Griffin, Steve Cohen, and Izzy Englander, who are collectively worth about $55 billion.

It is wise to follow the movements of elite hedge funds to navigate the tumultuous stock market. Some of the best stocks to invest in according to smart investors include Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Meta Platforms, Inc. (NASDAQ:META). 

Our Methodology 

We scanned Insider Monkey’s database of holdings of 943 elite hedge funds tracked as of the end of the fourth quarter of 2022 and picked the top 10 companies that were most popular among smart investors. The list is arranged in ascending order of the number of hedge fund holders in each firm. 

Best Stocks To Buy For The Next 3 Months 

10. Salesforce, Inc. (NYSE:CRM)

Number of Hedge Fund Holders: 117

Salesforce, Inc. (NYSE:CRM) is a California-based company that uses customer relationship management technology to bring companies and customers together worldwide. According to Morgan Stanley, Salesforce, Inc. (NYSE:CRM) has the potential to increase its earnings per share by 20% or more in the coming years. This is due to the company’s recent restructuring and involvement of activist investors, which could improve its financial performance.

On February 21, Cowen raised the firm’s price target on Salesforce, Inc. (NYSE:CRM) to $170 from $160 and maintained an Outperform rating on the shares. The reason behind this move was that Cowen’s survey of commercial partners indicated a strong performance in the fourth quarter. However, their checks on enterprises showed weaker results, which suggests that there may be higher pressure on net expansion rates and cross-selling. Salesforce, Inc. (NYSE:CRM) is facing different factors such as activism, an increased focus on profit, and challenging demand headwinds. Despite these challenges, the stock is responding well to the outlook of stronger margins after the company’s headcount cuts.

According to Insider Monkey’s fourth quarter database, 117 hedge funds were long Salesforce, Inc. (NYSE:CRM), and Harris Associates is the largest stakeholder of the company, with 8.14 million shares worth $1.08 million. 

Like Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Meta Platforms, Inc. (NASDAQ:META), Salesforce, Inc. (NYSE:CRM) is one of the best stocks to invest in. 

Aristotle Atlantic made the following comment about Salesforce, Inc. (NYSE:CRM) in its Q3 2022 investor letter:

“We sold Salesforce, Inc. (NYSE:CRM) to reduce our weighting in the Information Technology sector. Salesforce held their investor day, and the company reiterated their organic Fiscal Year 2026 revenue target of $50 billion. This target remains more back-end loaded based on current slowing macroeconomic conditions and requires new annual contract growth well ahead of what the company has been averaging for the past few years. We are skeptical that the company will be able to achieve this revenue target organically and see Merger & Acquisitions (M&A) being key to achieving the growth. While we believe Salesforce has shown good success in growing its non-CRM clouds, we do see more competitive pressures emerging for the Marketing and Customer Service Clouds, specifically on the pricing side during a global economic slowdown.”

9. Activision Blizzard, Inc. (NASDAQ:ATVI)

Number of Hedge Fund Holders: 129

Activision Blizzard, Inc. (NASDAQ:ATVI) is a California-based developer and publisher of interactive entertainment content and services in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. On February 21, it was announced that the 13-month-old proposal by Microsoft (NASDAQ:MSFT) to acquire Activision Blizzard, Inc. (NASDAQ:ATVI) for $69 billion could be entering a crucial phase in Europe. This comes after a closed-door hearing with European Union regulators to determine whether the proposed acquisition raises significant anti-competitive concerns. 

On February 16, Deutsche Bank analyst Benjamin Soff upgraded Activision Blizzard, Inc. (NASDAQ:ATVI) to Buy from Hold with a price target of $90, up from $83. The analyst believes that the company’s business model provides the best risk/reward outlook across the gaming sector this year. He stated that Activision Blizzard, Inc. (NASDAQ:ATVI) has strong momentum across its major franchises, with the highest concentration of “must-have” content at a time when consumers are becoming increasingly selective. Activision Blizzard, Inc. (NASDAQ:ATVI) also has the potential to offer attractive returns for shareholders, even if the proposed Microsoft deal falls through. Despite challenges in consumer spending across the industry, the analyst believes that Activision can still generate healthy growth levels this year.

According to Insider Monkey’s Q4 data, 129 hedge funds were bullish on Activision Blizzard, Inc. (NASDAQ:ATVI), up from 96 funds in the prior quarter. Warren Buffett’s Berkshire Hathaway is the biggest stakeholder of the company, with 52.7 million shares worth $4.03 billion. 

Here is what Cooper Investors specifically said about Activision Blizzard, Inc. (NASDAQ:ATVI) in its Q2 2022 investor letter:

“Activision Blizzard, Inc. (NASDAQ:ATVI) – our investment preceded news that the company was under investigation for workplace bullying. When it became clear management had misled the market on the extent of the problem we sold, led by our principles of Responsible Investing. We did not benefit from the subsequent M&A premium paid by Microsoft.”

8. Uber Technologies, Inc. (NYSE:UBER)

Number of Hedge Fund Holders: 135

Uber Technologies, Inc. (NYSE:UBER) is one of the biggest mobility technology companies in the United States, Canada, Latin America, Europe, the Middle East, Africa, and Asia excluding China and Southeast Asia. It operates through three segments – Mobility, Delivery, and Freight. On February 20, Uber Technologies, Inc. (NYSE:UBER) announced that it is planning to introduce 25,000 electric vehicles for ride-sharing in India over the course of three years as part of its effort to become more environmentally friendly. To achieve this goal, the ride-hailing platform’s fleet partners will purchase 25,000 XPRES’T electric vehicle units from Tata Motors. The EVs will operate in several major cities, including Delhi, Mumbai, Kolkata, Chennai, Hyderabad, Bengaluru, and Ahmedabad.

On February 13, Argus analyst Bill Selesky raised the firm’s price target on Uber Technologies, Inc. (NYSE:UBER) to $43 from $36 and kept a Buy rating on the shares. The analyst believes that Uber Technologies, Inc. (NYSE:UBER)’s ridesharing and food delivery businesses will perform strongly in the future, and the company will return to pre-pandemic ridership levels by 2023. The research note also mentions that Argus is optimistic about Uber’s recent acquisitions of Drizly, which is an on-demand alcohol marketplace that will expand the company’s Delivery business, and Transplace, a logistics technology platform with one of the largest managed transportation and logistics networks in the world.

According to Insider Monkey’s Q4 database, 135 hedge funds were long Uber Technologies, Inc. (NYSE:UBER), and it is one of the best stocks to buy according to smart investors. Alkeon Capital Management is the biggest stakeholder of the company, with 12.80 million shares worth $316.7 million. 

Artisan Partners made the following comment about Uber Technologies, Inc. (NYSE:UBER) in its Q3 2022 investor letter:

“During the quarter, we began new GardenSM campaigns in Uber Technologies, Inc. (NYSE:UBER) and Shopify. In July, we initiated our position in Uber, a leader in global ride-hailing and online food delivery. We believe the company is well positioned to benefit from strong secular tailwinds in both of its core businesses. Earlier this year, management outlined a plan at its investor day to achieve $4 billion of free cash flow by 2024, an encouraging commitment given investors have maligned the company for years of being unprofitable. We witnessed solid progress toward achieving this goal in the company’s most recent earnings results, where it beat expectations for the quarter on both fronts and delivered positive FCF for the first time. The company also indicated it isn’t seeing any evidence of slowing demand. We recognize the execution risk associated with Uber achieving its long-term targets, and the path likely won’t be linear, which is why we are keeping our position size modest until we see signs of continued operational momentum in the coming quarters.”

7. Apple Inc. (NASDAQ:AAPL)

Number of Hedge Fund Holders: 135

Apple Inc. (NASDAQ:AAPL) reported fourth quarter earnings on February 2. The company announced GAAP earnings per share of $1.88 and a revenue of $117.15 billion, falling short of Wall Street estimates by $0.07 and $4.5 billion, respectively. Installed base crossed 2 billion active devices and hit an all-time high for all major product categories. Apple’s board of directors also declared a cash dividend of $0.23 per share, which was paid to unitholders on February 16, 2023. 

According to investment advisory Bernstein, Apple Inc. (NASDAQ:AAPL)’s Services growth has decelerated for six consecutive quarters, with gross margins also contracting last quarter, primarily due to softness in Apple Inc. (NASDAQ:AAPL)’s Advertising and App Store businesses. The firm predicts that Services will grow 10% in fiscal 2023 as reported, and 13% at constant currency, primarily due to weaker advertising growth. However, Bernstein believes that the weakness in Advertising and the App Store is a temporary downturn and not a fundamental one. In the long term, Bernstein expects Services to grow between 12% and 15% over the next 3 to 5 years, driven by growth in the installed base, increased ARPU, and new services offerings. Bernstein has a Market Perform rating on Apple Inc. (NASDAQ:AAPL) with a price target of $125 as of February 21. 

According to Insider Monkey’s fourth quarter database, Apple Inc. (NASDAQ:AAPL) was part of 135 hedge fund portfolios, compared to 140 in the prior quarter. Phill Gross and Robert Atchinson’s Adage Capital Management is a  significant position holder in the company, with nearly 15 million shares worth $1.94 billion. 

Here is what Distillate Capital has to say about Apple Inc. (NASDAQ:AAPL) in its Q3 2022 investor letter:

“The largest new purchase was Apple Inc. (NASDAQ:AAPL), which after underperforming saw its valuation improve significantly. Over the course of the last year, Apple’s consensus estimated forward free cash flows rose modestly, while its enterprise value fell by around 30%. Apple ranks below the 25th most attractive name in the portfolio and so its weight is capped at 4% vs. 6% for names in the top quartile.”

6. Mastercard Incorporated (NYSE:MA)

Number of Hedge Fund Holders: 139

Mastercard Incorporated (NYSE:MA) is an American multinational payments technology firm. On January 26, Mastercard Incorporated (NYSE:MA) reported a Q4 non-GAAP EPS of $2.65 and a revenue of $5.8 billion, outperforming Wall Street consensus by $0.07 and $10 million, respectively. Net revenue increased 12%, or 17% on a currency-neutral basis, which includes a 1 percentage point benefit from acquisitions. On February 14, Mastercard Incorporated (NYSE:MA) declared a quarterly dividend of $0.57 per share, in line with previous. The dividend is payable on May 9, to shareholders of record on April 7. 

On January 30, Mizuho analyst Dan Dolev raised the firm’s price target on Mastercard Incorporated (NYSE:MA) to $405 from $380 and maintained a Buy rating on the shares following the “solid” Q4 results.

According to Insider Monkey’s fourth quarter database, 139 hedge funds were long Mastercard Incorporated (NYSE:MA), compared to 146 funds in the preceding quarter. Charles Akre’s Akre Capital Management held the largest stake in the company, with 5.8 million shares worth $2.03 billion.

In addition to Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Meta Platforms, Inc. (NASDAQ:META), Mastercard Incorporated (NYSE:MA) is one of the most popular stocks among smart investors. 

Baron FinTech Fund made the following comment about Mastercard Incorporated (NYSE:MA) in its Q4 2022 investor letter:

“Shares of global payment network Mastercard Incorporated (NYSE:MA) increased after reporting strong quarterly results, with 15% revenue growth and 13% EPS growth despite significant headwinds from currency movements and the suspension of operations in Russia. Payment volume grew 21% in local currency (excluding Russia) as consumer spending remained resilient and the international travel recovery continued as border restrictions were lifted. We continue to own the stock due to Mastercard’s long runway for growth and significant competitive advantages.”

5. Alphabet Inc. (NASDAQ:GOOG)

Number of Hedge Fund Holders: 152

Alphabet Inc. (NASDAQ:GOOG) posted a Q4 GAAP EPS of $1.05 and a revenue of $76.05 billion, falling short of Wall Street estimates by $0.14 and $440 million, respectively. While the revenue missed market consensus, revenue for Google Search, YouTube Ads, Google Network, Google Advertising, Google Services, and Google Cloud all exceeded Q3 figures. 

According to Wells Fargo analyst Brian Fitzgerald, despite the underwhelming rollout of Bard, the hype cycle for Generation AI (Gen AI) presents an opportunity for Alphabet Inc. (NASDAQ:GOOG). This is because there is a potential for Gen AI deployment without disrupting search monetization, and Alphabet Inc. (NASDAQ:GOOG) has a leading position in conversational AI technology. Additionally, there is a misapprehension about the drivers of search share. The analyst reiterated an Overweight rating on Alphabet’s shares on February 9, with a price target of $150.

According to Insider Monkey’s Q4 data, 152 hedge funds were long Alphabet Inc. (NASDAQ:GOOG), compared to 156 funds in the prior quarter. Chris Hohn’s TCI Fund Management is the biggest stakeholder of the company, with 54.5 million shares worth $4.8 billion. 

Diamond Hill Large Cap Strategy made the following comment about Alphabet Inc. (NASDAQ:GOOG) in its Q4 2022 investor letter:

“Other bottom contributors included media and technology giant Alphabet Inc. (NASDAQ:GOOG), apparel and footwear company V.F. Corporation and utility operator Dominion Energy. We believe Alphabet’s shares underperformed on concerns of a weakening macroeconomic environment. The company also reported weaker-than-expected earnings and revenue for Q3 2022. Longer-term, we expect Alphabet’s search engine advertising, YouTube advertising and other initiatives to continue driving revenue growth. As such, we used the share price weakness this quarter to add to our position.”

4. Visa Inc. (NYSE:V)

Number of Hedge Fund Holders: 177

Visa Inc. (NYSE:V), an American multinational financial technology giant, is one of the best stocks to buy according to elite hedge funds. On January 26, Visa Inc. (NYSE:V) reported a FQ1 non-GAAP EPS of $2.18, beating market estimates by $0.17. The revenue of $7.9 billion climbed 11.9% year-over-year, outperforming Street forecasts by $200 million. Visa Inc. (NYSE:V) is also set to pay a $0.45 per share quarterly dividend on March 1, to shareholders of record as of February 10. 

On January 29, Barclays analyst Ramsey El-Assal raised the firm’s price target on Visa Inc. (NYSE:V) to $270 from $266 and maintained an Overweight rating on the shares. The updated target is based on management’s revised Q2 guidance and an unchanged fiscal 2023 outlook, according to the analyst’s note to investors.

Among the hedge funds tracked by Insider Monkey, Visa Inc. (NYSE:V) was part of 177 public stock portfolios at the end of Q4 2022, compared to 165 in the earlier quarter. Warren Buffett’s Berkshire Hathaway is a prominent stakeholder of the company, with 8.2 million shares worth $1.7 billion. 

Baron FinTech Fund made the following comment about Visa Inc. (NYSE:V) in its Q4 2022 investor letter:

“Shares of global payment network Visa Inc. (NYSE:V) increased after reporting strong quarterly results, with 19% growth in revenue and EPS despite currency headwinds and the suspension of operations in Russia. Payment volume grew 16% in local currency (excluding Russia and China) with notable strength in cross-border volumes driven by rebounding international travel. Management also provided encouraging guidance for the next fiscal year. We continue to own the stock due to Visa’s long runway for growth and significant competitive advantages.”

3. Meta Platforms, Inc. (NASDAQ:META)

Number of Hedge Fund Holders: 194

Meta Platforms, Inc. (NASDAQ:META) reported its December quarter results on February 1. The company announced Q4 GAAP earnings per share of $1.76, missing Wall Street estimates by $0.48. Revenue for the period came in at $32.17 billion, outperforming market consensus by $480 million. Meta Platforms, Inc. (NASDAQ:META) expects first quarter 2023 total revenue to be in the range of $26 billion to 28.5 billion, compared to a $27.25 billion consensus. It is one of the best stocks to invest in according to smart investors. 

After Meta Platforms, Inc. (NASDAQ:META) announced on February 19 that it is testing a new subscription service on Facebook and Instagram, Meta Verified, BofA said the firm is “intrigued by this offering” and sees a 12 million potential subscriber opportunity by the end of 2023 to early 2024. Though the firm noted some potential audience size limitations, it believes Meta Platforms, Inc. (NASDAQ:META) could outperform the subscriber ramp as a percent of users of peer subscription offerings given a broader audience reach and bigger revenue opportunity for creators. Noting that Meta Platforms, Inc. (NASDAQ:META) “continues to take more aggressive action to grow earnings in the year of efficiencies,” BofA maintained a Buy rating and $220 price target on Meta shares on February 21. 

According to Insider Monkey’s fourth quarter database, 194 hedge funds were long Meta Platforms, Inc. (NASDAQ:META), compared to 177 funds in the preceding quarter. Boykin Curry’s Eagle Capital Management is a significant position holder in the company, with 9.11 million shares worth over $1 billion. 

Vulcan Value Partners made the following comment about Meta Platforms, Inc. (NASDAQ:META) in its Q4 2022 investor letter:

“During the quarter we sold Meta Platforms, Inc. (NASDAQ:META) after owning the business for over four years. The fundamentals of our investment case were based on the tremendous number of users that spent time on its various properties and the advertising dollars that flowed to the company as a result. We believed its competitive advantage was that the platform was, more or less, a monopoly on people’s time and attention. The rise of TikTok and other emerging platforms has given us pause on the company’s ability to maximize that advantage. From our perspective, the idea of “one platform to rule them all” may now be a thing of the past as social offerings have become more fragmented.

In addition, though our research has indicated that much of the initial damage done from Apple’s iOS 14.5 privacy changes has been repaired, we remain concerned with Apple’s influence over the digital advertising ecosystem. Apple is one of the largest gatekeepers to Meta’s mobile services, and it has become more difficult for us to gauge the pace of change emerging from Apple relating to privacy, as well as evaluating Apple’s ambitions in advertising…” (Click here to read the full text)

2. Amazon.com, Inc. (NASDAQ:AMZN)

Number of Hedge Fund Holders: 240

In July 2022, Amazon.com, Inc. (NASDAQ:AMZN) agreed to acquire One Medical (NASDAQ:ONEM), a primary care platform that operates on a membership basis, for $18 per share. On February 22, Amazon.com, Inc. (NASDAQ:AMZN) completed the acquisition for a total cost of $3.9 billion. The company’s Q4 2022 revenue of $149.2 billion climbed 8.6% year-over-year, topping Wall Street estimates by $3.43 billion.

On February 14, Loop Capital analyst, Rob Sanderson, reiterated a Buy rating and a $140 price target on Amazon.com, Inc. (NASDAQ:AMZN), following its Q4 results earlier this month. 

According to Insider Monkey’s fourth quarter database, 240 hedge funds held stakes in Amazon.com, Inc. (NASDAQ:AMZN), compared to 269 funds in the earlier quarter. Harris Associates is a prominent stakeholder of the company, with 19.3 million shares worth $1.6 billion. 

Diamond Hill Large Cap Strategy made the following comment about Amazon.com, Inc. (NASDAQ:AMZN) in its Q4 2022 investor letter:

“At Amazon.com, Inc. (NASDAQ:AMZN), recessionary and inflationary headwinds drove weaker demand and higher costs for its AWS (Amazon Web Services) and retail businesses. While over investment in the retail business during the pandemic and continued growth of investments in AWS could lead to near-term pressure on profitability, we believe Amazon’s competitive advantages will continue to grow and that the business has the potential to grow much faster than the overall economy in the coming years.”

1. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 259

Microsoft Corporation (NASDAQ:MSFT) announced on February 22 that it has released new applications for its Bing search engine and Edge web browser, which are powered by artificial intelligence, for both iOS and Android devices. The new apps include features that are powered by ChatGPT. Additionally, Microsoft Corporation (NASDAQ:MSFT) has stated that its Skype app will receive an AI-powered chat experience. Earlier this month, Microsoft Corporation (NASDAQ:MSFT) began rolling out ChatGPT functionality to users of its Bing search engine on desktop computers.

On February 13, Morgan Stanley analyst Keith Weiss forecasted that Microsoft Corporation (NASDAQ:MSFT)’s EPS growth will accelerate in each of the next five quarters, starting from the Q2 low point. The analyst attributed this projection to several factors, including easier comparisons, price increases, a decrease in foreign exchange headwinds, and a slowdown in operating expenses. According to Morgan Stanley, refining its cloud and overall gross margin models at the end of Q2 makes achieving the Q3 target seem possible. Morgan Stanley maintained its Overweight rating and a $307 price target on Microsoft. The firm also noted that it sees more positive aspects of the company than just its artificial intelligence capabilities.

According to Insider Monkey’s Q4 data, 259 hedge funds were bullish on Microsoft Corporation (NASDAQ:MSFT), compared to 269 funds in the prior quarter. Bill & Melinda Gates Foundation Trust is the biggest stakeholder of the company, with 39.2 million shares worth $9.4 billion. 

Polen Global Growth Strategy made the following comment about Microsoft Corporation (NASDAQ:MSFT) in its Q4 2022 investor letter:

“In the case of Microsoft Corporation (NASDAQ:MSFT), the company is performing very well. Azure now represents nearly 25% of the total business and continues to compound at a higher rate. Although growth is moderating a bit recently (as it is for AWS and Google Cloud Platform as well), these three platforms collectively generated more than $140 billion in revenue during the last 12 months and are still growing at a healthy rate. Further, Microsoft Cloud, or commercial cloud (which includes Azure and other cloud services, Office 365 Commercial, the commercial portion of LinkedIn, Dynamics 365, and other cloud properties) continues to grow roughly 30% and is now about half the business. Mathematically, commercial cloud could decelerate to 20% growth with all other segments decelerating to zero growth and total company revenue growth would still be at least double digits. We believe Microsoft is positioned to compound underlying earnings per share at a mid teens rate over the next five years. At 22x earnings, we felt the valuation was attractive and that it should be a large position.”

Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily enewsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also check out 11 High Growth Energy Stocks to Buy and 12 High Growth Financial Stocks to Buy. 

Suggested articles:

• 12 High Growth Semiconductor Stocks That Are Profitable
• 15 Highest Yielding Dividend Stocks You Can Buy
• 11 Most Undervalued Pot Stocks to Buy

Disclosure: None. 10 Best Stocks To Buy For The Next 3 Months is originally published on Insider Monkey.