Chris Toomey, Morgan Stanley managing director of private wealth, said in a latest program on CNBC that he is not bullish on stocks yet and plans to “stay defensive” until a few key issues are resolved. The analyst wants to see more clarity on US-China tariff dispute and 10-year Treasury yields below 4% “without a recession” as well as a dovish Federal Reserve.

Asked what investors should do in this situation, Toomey pointed out some safe alternatives to stocks in the current environment:

“We were underweight equities. We continue to remain underweight. I think you want to stay in the largest kind of highest quality area. think there’s also opportunity in other areas of the market. You know, we saw a situation where equities were selling off, bonds were selling off at the same time. Speaks to the benefit with regards to alternatives, whether it’s hedge funds, whether it’s looking at things like private credit, or just looking into opportunities within the private equity market. If you look at, you know, the fixed income market right now, MUN’s on a tax equivalent basis, you’re looking at sometimes 7 to 10% tax equivalent yields. You know, that’s pretty attractive right now while you’re waiting for this uncertainty to pay off.”

For this article, we picked 10 stocks making moves currently. 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).

READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.

10. IBM Common Stock (NYSE:IBM)

Number of Hedge Funds Investors: 56

Wamsi Mohan, Bank of America Global Research senior IT hardware analyst, said in a latest program on CNBC that he believes IBM Common Stock (NYSE:IBM) has the ability to meet its targets and called the pullback the company faced “transitory.”

“They’ve divested a lot of assets that were not growing, they’ve invested in assets that are progrowth, and they’re changing the growth profile of this company—and we think for the better. Now when you look at the quarter itself, the quarter was 2% constant currency growth, and the company has guided to about 5% plus constant currency growth for the year. So there’s some skepticism on their ability to meet those targets. When we dig into the numbers, we actually think there is a way for them to meet or beat these kinds of numbers, and that’s really driven by the fact that they’re in a mainframe launch year, and the mainframe still is very relevant, contrary to maybe popular belief, and can be a big driver for numbers.”

Mohan said he is “very bullish” on IBM Common Stock (NYSE:IBM).

IBM Common Stock (NYSE:IBM) is indeed making a comeback. As of the end of Q4, IBM’s AI products and services surpassed $5 billion in total bookings, with $2 billion added just since last quarter. Last year, IBM Common Stock (NYSE:IBM) updated its Granite family of AI models for enterprise use, making them about 90% more cost-efficient than large models. RedHat is also key in IBM Common Stock (NYSE:IBM) open-source GenAI strategy. Management highlighted that RHEL AI and OpenShift AI platforms are gaining traction, along with IBM Common Stock (NYSE:IBM) watsonx AI solutions.

9. Lam Research Corp (NASDAQ:LRCX)

Number of Hedge Funds Investors: 58

Jim Cramer in a recent program on CNBC praised Lam Research Corp (NASDAQ:LRCX) and the company’s management.

“Lam Research is probably the greatest semiconductor capital equipment company other than Taiwan Semi, and they reported a monster quarter. And Tim Archer, the CEO, came on Mad Money—he’s fantastic. This was an amazing quarter. I know it’s up three, it’s going to go up more. They are just a remarkable company.”

Sands Capital Select Growth Fund stated the following regarding Lam Research Corporation (NASDAQ:LRCX) in its Q4 2024 investor letter:

“We exited Lam Research Corporation (NASDAQ:LRCX) on valuation concerns. The stock’s 12-month forward earnings multiple more than doubled from its 2022 low to the end of 2024’s third quarter. This valuation reflected lofty expectations for artificial intelligence (AI)-driven dynamic random access memory (DRAM) demand and NAND flash memory capital expenditure. While both DRAM and NAND stand to benefit from AI use cases, we believe this is likely to be overwhelmed by a muted recovery in consumer categories and potential deterioration in Chinese semiconductor capital expenditure. The latter concern became more acute following ASML Holding’s third-quarter 2024 earnings results, in which the business guided for its China revenue to fall by nearly 50 percent in 2025.

Looking past the valuation concerns, we maintain conviction in Lam’s long-term earnings power, given its leadership position in etch and deposition wafer fabrication equipment and the longer-term demand and technology trends. DRAM and NAND growth can inflect with improvements and scaling in AI (e.g., more memory use in inferencing, new packaging technology to improve input and output between memory and logic chips), and etch and deposition will become more important with new gate-all-around transistor architecture. We also expect the business to be a primary beneficiary of the next PC and smartphone replacement cycle, though we have little visibility into the cycle’s timing.”

8. Chevron Corp (NYSE:CVX)

Number of Hedge Funds Investors: 63

Jim Cramer in a latest program on CNBC said that he likes Chevron Corp (NYSE:CVX) but cannot recommend the stock because of a downward trend in oil prices.

“It’s oil related and we can’t tell where oil’s going to go so I decided I couldn’t include that even though I know Mike Wirth has done a remarkable job we got a 5% yield but I just feel like the principle could go down so much that it doesn’t matter so I got to tell you I like Chevron very much but in the end what is it an oil company and the president seems to want oil much lower can’t make money in any market when you have a president says he wants that one lower.”

TCW Relative Value Large Cap Fund stated the following regarding Chevron Corporation (NYSE:CVX) in its Q3 2024 investor letter:

“Chevron Corporation (NYSE:CVX), headquartered in San Ramon, CA, is an integrated energy company. At elimination, the stock had a $273 billion market capitalization and met all five valuation factors, including a robust 4.4% dividend yield. Chevron’s planned acquisition of Hess† would yield a strong restructuring catalyst through elimination of duplicate corporate costs and a new markets catalyst through Hess’ 30% interest in the Stabroek oilfield off Guyana; these blocks have a very low cost of supply and decades of reserves that would support strong free cash flow. While Chevron recently received Hart[1]Scott-Rodino (HSR) clearance to acquire the company, the closure timing has extended from Q4 2024 to possibly to Q2 2025 as Chevron is engaged in arbitration with peers ExxonMobil (XOM; 2.47%**) and Chinese state-owned CNOON over rights of first refusal (ROFR) for Hess’ interest in Stabroek. As Chevron’s expected arbitration resolution timeline has slipped, we believe that ExxonMobil and CNOOC’s ROFR case may have more merit than expected, thus putting the entire Hess acquisition at risk. Given an increasingly reasonable outcome that Chevron might abandon the Hess acquisition altogether, we eliminated the position in the stock.”

7. Intel Corp (NASDAQ:INTC)

Number of Hedge Funds Investors: 68

Christopher Rolland, Susquehanna senior analyst, said in a recent program on CNBC that Intel Corp (NASDAQ:INTC) is “dead money” in its current strategic form.

“I do think it’s dead money in its current strategic form. I would love to see this company broken up into manufacturing on one side and product on the other. I think particularly with Trump’s pro-USA stance, manufacturing might even have a chance here. There’s also rumors out today of increased interest in their 18A foundry operation, and I would love to see large hyperscalers building out in America using Intel.”

The analyst also explained why the stock fell despite decent quarterly results. His analysis shows that Intel Corp (NASDAQ:INTC) is not seeing a broader turnaround as of yet, and it would take a long time for the investors to see some positive developments.

“The 2Q guide was light, and even though 1Q beat, there’s a couple of things here to note in the presentation. So number one, they said better volumes on PC — we think that’s PC-related pull-in because of tariffs. Secondly, they called out more competition. We think AMD is taking share here, even in the first quarter. And then lastly, data center, which also beat in 1Q — they noted that this was related to AI head nodes. What that means is, for every four GPUs that Nvidia sells, Intel sells one CPU for DGX. And so this was really where data center beat, which really isn’t a standalone Intel product.”

Intel Corp (NASDAQ:INTC) turnaround plan has many moving parts, and the stock is a hold only for those who can wait. The company is reportedly mulling a 20% reduction in workforce and a partnership with TSMC. It has already postponed its $28 billion factory project in Ohio to 2030. If the company reduces its foundry operations, it could focus on more promising areas of its business.

Tariffs and trade wars are key headwinds for Intel. China imports $10 billion worth of chips from the U.S. annually, with Intel Corp (NASDAQ:INTC) U.S.-assembled CPUs accounting for $8 billion of that total.

The EPS estimate for the fiscal year ending December 2026 stands at $0.86, giving the stock a forward price-to-earnings (PE) ratio of 23.44. For the fiscal year ending December 2027, the forward PE ratio drops to 13.50.  This valuation is modest and attractive only if Intel Corp (NASDAQ:INTC) is able to successfully execute its turnaround plan.

Invesco Growth and Income Fund stated the following regarding Intel Corporation (NASDAQ:INTC) in its Q3 2024 investor letter:

“Intel Corporation (NASDAQ:INTC): The chipmaker reported weaker-than-expected quarterly results as revenues declined and earnings were below expectations. Management also provided weaker guidance going forward; the stock fell on the news. We sold the position during the quarter.

The chipmaker’s quarterly earnings report was weaker than anticipated as revenues declined and earnings were below expectations. Management also provided weaker guidance going forward. Given that a potential recovery appears to be further in the future than we originally anticipated, we sold the position.”

6. Merck & Co Inc (NYSE:MRK)

Number of Hedge Funds Investors: 86

Jim Cramer in a recent program on CNBC commented on Merck & Co Inc (NYSE:MRK) earnings results and said the pharma giant’s report was among a series of statements from major companies that were “disappointing.”

“This is an earning season so far where a lot of the big ones that look like they’re just shockingly bad or disappointing—everyone knew. I mean, Merck reported a quarter, I think we all kind of knew that Keytruda had slowed down a little bit. We knew that there were some Gardasil problems.Winrevair, drug that they bought—pulmonary arterial hypertension—I thought it was terrific, 280 million. So I think that this is an example where you can just say, oh my god, damn, Merck down almost 40%. I got to—I, I, I got to take a hard look at it.”

GreensKeeper Asset Management stated the following regarding Merck & Co., Inc. (NYSE:MRK) in its Q3 2024 investor letter:

“Merck & Co., Inc. (NYSE:MRK) was our second-largest detractor this quarter, declining -8.3%. MRK’s leading HPV vaccine, GARDASIL 9, faced challenges internationally due to inventory buildup within its Chinese distributor, which is expected to reduce shipments for the remainder of 2024. Despite this short-term impact, the long-term outlook for GARDASIL 9 remains promising. Meanwhile, the company’s $27 billion Keytruda cancer juggernaut continues to grow at a healthy clip, powering earnings growth.”

5. Walmart Inc (NYSE:WMT)

Number of Hedge Funds Investors: 88

Robert William Flay, celebrity chef, restaurateur, TV personality, and best-selling author, explained in a recent program on CNBC why Walmart Inc (NYSE:WMT) is his top pick. The chef said he’s keeping a keen eye on retailers and believes Walmart has more room to run amid the current environment.

“I think that there’s a lot of uncertainty. We don’t know which direction we’re going in from minute to minute, not even from day to day anymore. And so, you know, a place like Walmart is trusted. I think people could continue, will need to continue to spend, but I think that they’ll be looking for the right prices and trusted places like a place like Walmart. I pay a lot of attention to the retail business. You guys mentioned Nacho—I actually have a CPG company called Made by Nacho, which is a, it’s actually a cat food company. And so I pay a lot of attention to big box retailers and specialty retailers, etc., across the board, and they seem to have so far weathered the storm this year. And I just think that their upside is going to continue.”