In this article, we will take a detailed look at the 10 Stocks Moving On Key Analyst Calls.
Investors are closely watching AI stocks amid growing concerns about a bubble and an impending market correction. This cautionary sentiment rose following major AI deals announced by giants like Nvidia and OpenAI. In a latest interview with CNBC, Michael Wolf, Activate co-founder and CEO, negated the notion that the AI industry is seeing “vendor financing” deals. The analyst believes these deals are driven by real demand:
“It’s really not vendor financing,” Wolf said.” You’ve got all of these companies. They’re all investing, making huge investments in infrastructure, and at this level of investment, of course, they’re all going to partner up to do it. But they’re investing really because there’s going to be real demand, and the real demand is here.”
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For this article, we picked 10 stocks currently moving on latest news and analyst calls. 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).
10. Meritage Homes Corp (NYSE:MTH)
Number of Hedge Fund Investors: 43
John Lovallo, UBS homebuilders and building products analyst, said in a latest program on CNBC that Meritage Homes Corp (NYSE:MTH) is his top pick in the homebuilder space.
The analyst believes a bottom is in sight for housing stocks and 2026 would be a positive year for the industry amid decreasing interest rates.
“We need is rate stabilization. These builders are having to put in an incredible amount of incentives into the market, which lowers ASP in order to stimulate demand. If rates stabilize, I think folks will have a better idea of what they’re paying. They’ll feel more confident in the overall environment. And let me tell you something, if rates actually do decline, that’s where it becomes very powerful. We’re modeling gross margins flat across the group in a stable rate environment. If rates come down, that is a meaningful spring to profitability,” he said.
ClearBridge Small Cap Strategy stated the following regarding Meritage Homes Corporation (NYSE:MTH) in its Q3 2024 investor letter:
“Our largest new position during the quarter was Meritage Homes Corporation (NYSE:MTH), in the consumer discretionary sector, which builds single family attached and detached homes in the western and southeastern U.S. While higher mortgage rates have weighed on homebuilders and the demand for housing, we continue to believe that there is a systematic shortage of housing in the U.S., and that a decline in interest rates and subsequent mortgage rates should prove a boon to homebuilders. Beyond broader sector tailwinds, we opted to move our capital from Century Communities to Meritage given the latter’s higher historical level of returns at a comparable current valuation.”
9. Phillips 66 (NYSE:PSX)
Number of Hedge Fund Investors: 47
Josh Brown, CEO of Ritholtz Wealth Management, said in a program on CNBC a couple of weeks ago that a breakout for PSX could be coming. The analyst talked about insider buying and an activist hedge fund taking board seats at the company:
“Phillips 66 (NYSE:PSX) is one of the three largest of that refinery group. Has not broken out yet. I think that could be coming. Number one, there’s a million reasons why an insider might sell stock in their own company, pay for a daughter’s wedding, real estate transaction, diversify the portfolio, whatever. There’s really only one reason why they buy. We had four board directors at Phillips 66 (NYSE:PSX) buy stock this summer, including one a couple weeks ago of a million dollars worth. And you’ve also got Elliott, one of the most successful activists in the world, quite frankly, now has two board seats at Phillips 66 (NYSE:PSX) and is on the record publicly stating this should be a $200 stock. So, I bought a little bit today, probably not done buying. I do believe that this will follow Marathon and Valero higher. I don’t have a stop in, but if you want to risk manage the position, I like 120. That is not only the 200-day moving average. It’s also exactly where the stock bottomed in the first two weeks of August.”
Aristotle Capital’s Value Equity Strategy stated the following regarding Phillips 66 (NYSE:PSX) in its first quarter 2024 investor letter:
“During the quarter, we sold our positions in Phillips 66 (NYSE:PSX) and Sysco and invested in two new positions: Lowe’s Companies and TotalEnergies.
We first purchased Phillips 66, the energy manufacturing and logistics company, in the third quarter of 2012. During our over decade-long ownership period, the company transformed itself from a predominately refining operation to a significantly more diversified energy business. In 2012, refining represented nearly 75% of earnings, and today it is less than half. With the expansion of other businesses, including midstream which is underpinned by long-term fee-based contracts, as well as chemicals and marketing, we believe Phillips 66 has reduced its cyclicality while enhancing FREE cash flow generation, supporting increased returns to shareholders. In addition, the company has started to position itself for the energy transition and remains on track to convert its San Francisco refinery into one of the world’s largest renewable fuels facilities. While we continue to believe Phillips 66 is a high-quality company on the path to further improvement, we decided to sell our shares to fund the purchase of what we consider a more suitable and attractive investment in TotalEnergies.”
8. Credo Technology Group Holding Ltd (NASDAQ:CRDO)
Number of Hedge Fund Investors: 48
Clare Pleydell-Bouverie, Co-Head of Global Innovation Team at Liontrust Asset Management, recently talked about the importance of networking in the AI revolution and mentioned some stocks she likes in the space during a program on CNBC. The analyst is bullish on Credo Technology, which provides high-speed connectivity solutions for optical and electrical Ethernet, and PCIe applications. Here is what the analyst said:
“Networking we think is possibly the most underappreciated growth story stretching out over the decade. And that’s because the chip is no longer the unit of compute. The data center is. Speed and performance are as much determined by system level connectivity as it is by raw compute. And we’ve got clusters of these chips moving to a million in the data center. So that’s an awful lot of networking. Historically, networking maybe captured 10% of every dollar’s worth of investment in AI infrastructure. That’s moving to 20–30%. The key players we’re looking for here would be the likes of Broadcom, leader in Ethernet networking, Credo who is wiring up as we speak XAI’s Prometheus cluster, as well as Amazon’s Trainium clusters.”
Renaissance Investment Small Cap Growth Strategy stated the following regarding Credo Technology Group Holding Ltd (NASDAQ:CRDO) in its second quarter 2025 investor letter:
“The top contributor to performance was Credo Technology Group Holding Ltd (NASDAQ:CRDO), a semiconductor and connectivity solutions provider that targets the AI data center market. The company grew revenues by nearly 180% in its most recent reported quarter and expects revenue growth to be greater than 200% in the current quarter. The company is benefiting from the AI data center buildouts by its largest customers, including Amazon and Microsoft. In addition, the company expects to ramp revenues with two new hyperscale customers in fiscal 2026. While we expect revenue growth to slow later this year, the company should continue to see robust growth going forward.”
7. KB Home (NYSE: KBH)
Number of Hedge Fund Investors: 51
John Lovallo, UBS homebuilders and building products analyst, said in a latest program on CNBC that KB Home (NYSE: KBH) posted a “really good” quarter as the company beat on “all KPIs”. He believes the stock has 30% upside amid the Fed’s rate cuts.
One, KB Home (NYSE: KBH) put up a really good quarter yesterday. They beat on all KPIs, you know, deliveries, revenue, gross margin, operating margin, EPS, orders. Now, they did take their forecast down slightly, but importantly, they noted stabilization across the broad housing market and particularly in markets that are very important like Florida and Texas. This is critical. And I would say on top of that, I think it’s becoming increasingly clear to us that the cut that they made and the cut that Lennar made to their estimates is the final cut. And I think that that’s very powerful. I think a bottomist sight is insight. Now KB tends to buy actually reduce the price of their home as opposed to using the buy downs. Other builders use buyowns, but the point’s the same. If you can actually stabilize that pricing. Very powerful.”
6. Costco Wholesale Corp (NASDAQ:COST)
Number of Hedge Fund Investors: 91
David Bellinger, Senior Analyst at Mizuho Securities, said in a program last month on CNBC that the US consumer is doing “fine” but the problems Costco is facing are specific to the company. Here is what the analyst said at the time:
“Costco Wholesale Corp (NASDAQ:COST) reports, we already know that they’re going to print about 6% same store sales in the US that excludes the more volatile gas category, and then globally that’s about 6 and a half%. So very good numbers. We just don’t think this is enough for Costco Wholesale Corp (NASDAQ:COST). So a bit of a deceleration from the 8% last quarter. We view this as the consumer’s fine in the US, but this is more of a Costco Wholesale Corp (NASDAQ:COST)-specific story where we see them going through this mini investment cycle. You’ve got elevated operating expense growth. Last quarter was double digits. We’re looking for something similar. So, you’re just not getting the flow through to the bottom line that we think you need for Costco Wholesale Corp (NASDAQ:COST), especially when it’s paired with this very elevated valuation. But, if we step back and just look at how the consumer is handling tariffs to date, we think they’re fine.
We want to see that non-foods business start to accelerate again. And then that, that’ll pair with this high valuation. It’ll make more sense. Maybe then at that point you start getting some earnings upside revisions and then the story could work. But until then, we’re still neutral on this name.
Costco beat fiscal Q4 earnings and revenue estimates. However, same-store sales showed sequential deceleration.
Patient Capital Opportunity Equity Strategy stated the following regarding Costco Wholesale Corporation (NASDAQ:COST) in its second quarter 2025 investor letter:
“We initiated an options position in Costco Wholesale Corporation (NASDAQ:COST) (COST 1/16/26 P960) during the quarter, purchasing at-the-money puts with a 2026 expiration. We’ve consistently highlighted the risk lurking in the “overpriced compounder” segment of the market, and we view Costco as a prime example. The stock is currently trading at 54x earnings despite growing only at a mid-single-digit rate. While Costco is undoubtedly a well-run business, we believe paying more than twice the market multiple for a low-growth, low-margin retailer is difficult to justify. At some point, we expect the market to reassess the premium valuation being placed on Costco’s fundamentals. When it does, we believe the stock could face meaningful downside from its current all-time high multiple.”
5. Alibaba Group (NYSE:BABA)
Number of Hedge Fund Investors: 101
Jeff deGraaf from Renaissance Macro said in a recent program on CNBC that Alibaba Group (NYSE:BABA) stock could double in the next 18 months.
“I think it can double in the next 18 months. So, I think this is just the beginning of a huge, huge move that goes back.”
The analyst said the market started believing China was “uninvestible” when the overall sentiment declined. However, he believes Chinese tech stocks are performing really well and have more room to run.
“Those concerns or that narrative that China’s uninvestable really started closer to the bottom than the top, right? People didn’t worry about it when they were making money. And I think that’s one of the dangers is that you can create a narrative to kind of fit what’s happened to price. And I’m afraid that that’s what’s going to happen here is that, you know, these stocks will double or maybe even better and suddenly people won’t care about the is it investable because they’ve missed out on it. So I think that that’s a healthy skepticism and we actually view that in light of the charts as just another reason why these things can move and be pretty substantial from here.”
Conventum – Alluvium Global Fund stated the following regarding Alibaba Group Holding Limited (NYSE:BABA) in its second quarter 2025 investor letter:
“Alibaba Group Holding Limited (NYSE:BABA) was down 12.8%. Bear in mind, this comes off a stunning 55.3% March quarter return. Alibaba reported full year results, and by all accounts they were pretty good. Market chatter suggests some were disappointed by the Cloud revenue, but with 18% growth over the last year, we are not complaining. We liked the continuation of share buybacks, noting that for the year ended 31 March 2025, it bought back over 5% of its shares. Our Alibaba holding accounts for 3.3% of the Fund. We wrote last quarter that we were closely monitoring the position (hinting toward selling). We chose not to act, largely because we see it as one of the cheaper and most direct ways for the Fund to benefit from AI initiatives and Cloud infrastructure growth, and at the same time it provides geographic and economic diversity.”
