In this article, we will take a look at 12 best future stocks to buy now.
If the change today versus 100 years ago is any indication, the future will likely be different from the past. In a span of 100 years, we had the computer revolution, the growth of the internet, the increase in average incomes by multiples and more.
In the future, it looks like there could be a lot more breakthroughs in technology. Fusion might be achievable. AI and machine learning will improve. Living standards could also increase and the world could become a lot more virtual and automated.
In terms of the future, some companies will play a big role in terms of developing future technologies. While there will likely be new companies that haven’t been founded yet that will grow at astonishing rates to dominate whole new industries, many of the leaders in future tech will likely be among the leaders in the tech industry today.
In terms of the tech industry, 2022 has been challenging given the market volatility. The tech heavy NASDAQ index is down around 35% year to date and the markets have been volatile in 2022 given that the Federal Reserve has increased interest rates 5 times this year to fight inflation. As a result of the increases and the expected increases in the future, the median projection for the federal funds rate is 4.4% at the end of 2022 and 4.6% at the end of next year. That compares to the expectation of 2.5% for the expected federal funds rate in the long run.
With higher rates, some businesses might invest less and some consumers might spend less. Less demand might make it harder for some businesses to grow their earnings or revenue like the market expects.
Given the uncertainty, it could be a good idea for long term investors to have a well diversified portfolio of high quality stocks across multiple different sectors. In terms of stocks that could develop technology for the future, here are 12 Best Future Stocks to Buy Today.
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Methodology
For our list of 12 Best Future Stocks to Buy Today, we took 12 innovative companies that also have growth potential. Using the collective wisdom of hedge funds, we sorted them based on the number of hedge funds in our database that also held shares in the same stocks at the end of Q2 2022.
12 Best Future Stocks to Buy Today
12. Toyota Motor Corporation (NYSE:TM)
Number of Hedge Fund Holders: 12
Toyota Motor Corporation (NYSE:TM) became one of the leading automakers in the world thanks to its history of innovation in terms of making fuel efficient and affordable cars. In terms of the future, Toyota Motor Corporation (NYSE:TM) will likely remain one of the leading innovators given its investments in EVs, fuel cells, and autonomous driving. According to the Nikkei in 2022, Toyota Motor Corporation (NYSE:TM) plans to launch an operating system that handles autonomous driving by 2025.
Fisher Asset Management was long over 5.3 million shares of Toyota Motor Corporation (NYSE:TM) at the end of Q2 2022.
Alongside Meta Platforms, Inc. (NASDAQ:META), Amazon.com, Inc. (NASDAQ:AMZN), and Microsoft Corporation (NASDAQ:MSFT), Toyota Motor Corporation (NYSE:TM) is a future stock many hedge funds in our database owned at the end of the second quarter.
11. Brookfield Renewable Partners L.P. (NYSE:BEP)
Number of Hedge Fund Holders: 19
Brookfield Renewable Partners L.P. (NYSE:BEP) might not be a leading tech company but it does operate one of the world’s largest publicly traded renewable power platforms. Given the future is green, Brookfield Renewable Partners L.P. (NYSE:BEP)’s growing portfolio of hydroelectric, wind, solar and storage facilities facilitate that future. Of the 895 hedge funds in our database, 19 owned shares of Brookfield Renewable Partners L.P. (NYSE:BEP) at the end of Q2 2022, ranking it #11 on our list of 12 Best Future Stocks to Buy Today.
Select Equity Group owned almost 2.6 million shares of Brookfield Renewable Partners L.P. (NYSE:BEP) at the end of the second quarter.
10. ASML Holding N.V. (NASDAQ:ASML)
Number of Hedge Fund Holders: 47
Given that much of the world’s modern economy depends on semiconductors and ASML Holding N.V. (NASDAQ:ASML)’s EUV tech makes making the most cutting edge semiconductors possible, ASML Holding N.V. (NASDAQ:ASML) is one of the world’s most foremost innovative tech companies and will likely remain so for a while. According to experts, it could take over a decade for other companies to catch up given the complexity. Shares are lower due to the weaker market and increasing tensions between the West and China, which could weaken sales.
There are nevertheless reasons to like the stock. Baron Opportunity Fund commented on ASML Holding N.V. (NASDAQ:ASML) in a Q2 2022 investor letter,
“ASML Holding N.V. designs and manufactures semiconductor production equipment. It specializes in photolithography equipment, where light sources are used to photo-reactively create patterns on wafers that become printed circuits. ASML is the dominant leader across all types of lithography but, most importantly, is the only company selling equipment for extreme ultra-violet (EUV) lithography, the latest generation technology.
Indeed, because of the stalling out of Moore’s Law, advanced lithography of larger and multi-patterned silicon chips has been critical for leading-edge chip manufacturing and continued improvement in semiconductor chip performance over time. The company is well positioned to continue growing above industry rates as it rapidly adds capacity across its entire business to meet rising industry demand, especially from leading-edge customers continuing to invest to stay ahead of their competitors and drive chip performance forward.
Additionally, the introduction of high-NA EUV technology in the middle of the decade will add another leg to the growth opportunity.”
9. Lockheed Martin Corporation (NYSE:LMT)
Number of Hedge Fund Holders: 55
Lockheed Martin Corporation (NYSE:LMT) is the leader when it comes to making the world’s best defense aircraft such as the F-35 and F-22. Given its core competency and its financial strength, Lockheed Martin Corporation (NYSE:LMT) will likely remain one of the leading defense manufacturers in the future. 55 hedge fund holders in our database were long Lockheed Martin Corporation (NYSE:LMT) at the end of the second quarter, ranking it #9 on our list of 12 Best Future Stocks to Buy Today.
8. Oracle Corporation (NASDAQ:ORCL)
Number of Hedge Fund Holders: 69
Oracle Corporation (NASDAQ:ORCL) is a leader in databases, enterprise software, and the cloud. In terms of the future, Oracle Corporation (NASDAQ:ORCL) is investing heavily in AI, machine learning, and also the future of work.
With a market cap of $175 billion and net income of $5.8 billion in the trailing twelve months, Oracle Corporation (NASDAQ:ORCL) has the resources to remain one of the most innovative companies in the future.
7. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 72
Tesla, Inc. (NASDAQ:TSLA) became one of the most valuable companies in the world thanks to the company pioneering the way in terms of electric vehicles. As a result, Tesla, Inc. (NASDAQ:TSLA) is the leader in the EV market today with substantial scale and growth momentum.
Led by Elon Musk, Tesla, Inc. (NASDAQ:TSLA) is likely to remain a key innovator of the future given that it also launched a robot and that the company is working on autonomous driving. Tesla, Inc. (NASDAQ:TSLA) is also a leading solar and energy storage company. ARK Investment Management owned more than 4 million shares of Tesla, Inc. (NASDAQ:TSLA) at the end of Q3.
6. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 84
NVIDIA Corporation (NASDAQ:NVDA) surpassed mighty Intel in valuation thanks to its focus on GPUs, which can be used for AI processing. Given how big AI will be in terms of future innovations, NVIDIA Corporation (NASDAQ:NVDA) is an innovative future company. Although the stock is down 61% year to date, the company benefits from long term trends. ClearBridge Large Cap Growth ESG Strategy commented on NVIDIA Corporation (NASDAQ:NVDA) in a Q2 2022 investor letter,
“Chipmaker Nvidia (NASDAQ:NVDA) has also been pressured by multiple compression of higher growth companies and weakness in its gaming business. While Nvidia has grown into a top 10 position with its strong performance through late 2021, we have been consistently trimming the position to derisk against short-term volatility in its gaming business. The company is clearly exposed to the semiconductor cycle but also participates in the secular growth of cloud and AI adoption through its data center business. With these secular drivers intact and new products ramping up in the second half of the year, we are maintaining an overweight to the company.”
Like NVIDIA Corporation (NASDAQ:NVDA), Meta Platforms, Inc. (NASDAQ:META), Amazon.com, Inc. (NASDAQ:AMZN), and Microsoft Corporation (NASDAQ:MSFT) are future stocks that many hedge funds in our database owned at the end of Q2 2022.
5. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 128
Apple Inc. (NASDAQ:AAPL) has been one of the most innovative companies in the last twenty years given its introduction of the iPhone, iPad, and app store. With those products, Apple Inc. (NASDAQ:AAPL) stock has been one of the best performing big tech stocks in the last ten years and the company has become the world’s most valuable company.
Given its huge financial resources, Apple Inc. (NASDAQ:AAPL) will likely remain one of the most innovative companies in the future. In terms of new potential products, Apple Inc. (NASDAQ:AAPL) is expected to launch an AR/VR headset, Apple Cars, and potentially even foldable iPhones. If there is strong demand for those products, Apple Inc. (NASDAQ:AAPL) earnings per share could increase.
Berkshire Hathaway owned almost 900 million shares of Apple Inc. (NASDAQ:AAPL) at the end of the second quarter.
4. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 153
Alphabet Inc. (NASDAQ:GOOG) has also been one of the most innovative companies since its founding less than three decades ago. As a result of its innovation, Alphabet Inc. (NASDAQ:GOOG) has arguably the world’s best search engine and also the world’s premier video streaming service. In the future, Alphabet Inc. (NASDAQ:GOOG) is also working on future technologies such as self driving cars, delviery drones, and potential ways of extending life expectancy.
Although it faces headwinds from TikTok and a potential recession in the future, Alphabet Inc. (NASDAQ:GOOG)’s fundamentals are currently strong at least in the near term. Lakehouse Capital commented on Alphabet Inc. (NASDAQ:GOOG) in a July 2022 investor letter:
“Alphabet Inc. (NASDAQ:GOOG) reported another strong quarterly result despite the tough macroeconomic conditions. Revenue increased by 13% as Search proved resilient, primarily led by strength in the travel and retail verticals. YouTube advertising growth was lighter and moderated due to a tough comparison period and a general softening in brand advertising spend. That said, YouTube’s user engagement and time spent still continues to grow which bodes well for future monetisation opportunities. Google Cloud outpaced the company’s overall growth with revenue increasing by 36% and while it has yet to show any signs of profitability, we remain supportive of Alphabet continuing to reinvest in its cloud business given the size of the market opportunity ahead. On the cost front, the company added another 10,000 employees during the quarter, but notably, the CFO mentioned that hiring will likely slow down over the next twelve months as the company focuses on greater operating efficiency. Overall, we’re pleased with how the company has performed and are confident that management will be able to control costs, if or when the economic environment becomes more challenging.”
3. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 184
Meta Platforms, Inc. (NASDAQ:META) has also been one of the most innovative companies in the world given its Facebook app which billions of people use every month. Meta Platforms, Inc. (NASDAQ:META)’s Instagram and WhatsApp is also simple to use and also very popular.
In terms of the future, Meta Platforms, Inc. (NASDAQ:META) has made a big bet on the metaverse and the associated AR/VR technologies. Although the initial version of the company’s metaverse product, Horizon Worlds, isn’t all that great, the company is planning on improving the product substantially in the future. With advances in AI, there is definitely potential for the metaverse and Meta Platforms, Inc. (NASDAQ:META) will likely be one of the key competitors in the sector.
2. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 252
Amazon.com, Inc. (NASDAQ:AMZN) has become one of the most valuable companies in the world given its innovation of offering its own computing infrastructure on demand through Amazon Web Services.
As a result of starting early and investing substantially in the right ideas, Amazon.com, Inc. (NASDAQ:AMZN) has the leading market share in the world in the cloud, which is a huge market and still has a lot more growth in the future.
Amazon.com, Inc. (NASDAQ:AMZN) has also been one of the leaders in terms of e-commerce with its heavy investment in AI and robotics. In the future, Amazon.com, Inc. (NASDAQ:AMZN) will likely continue to remain a future stock given its investments in AI, robotics, EVs, drones, the cloud, and more.
Fisher Asset Management owned 48.6 million shares of Amazon.com, Inc. (NASDAQ:AMZN) at the end of Q2 2022.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 258
Microsoft Corporation (NASDAQ:MSFT) is an innovative company given its cloud leadership and its huge investments in AI. Microsoft Corporation (NASDAQ:MSFT) will likely remain an innovative company given its investments in AR, VR, and AI. Given its leading position in enterprise, it’s likely the company will help develop new technologies related to how to make working in the future even more productive. With 258 hedge fund holders we track owning shares of Microsoft Corporation (NASDAQ:MSFT) at the end of Q2, the company ranks #1 on our list of 12 Best Future Stocks to Buy Today.
You can also take a look at 10 Most Valuable Internet Companies in 2000 vs. Today and 10 Biggest Industries In the US.
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Disclosure: None. 12 Best Future Stocks to Buy Today is originally published on Insider Monkey.
