On October 21, Steven Wieting, chief investment strategist at CIO Group, joined CNBC’s ‘The Exchange’ to suggest that he would stay long tech through areas like cybersecurity software. Wieting defended his position by citing double-digit earnings growth in tech for the last few years. While he expects revenue growth to continue into the following year, he does project it to slow down. He offered the late 1990s as the best analogy and cautioned that no analogy is perfect. He reminded listeners that in 1996, 1997, and 1998, there were all sorts of warnings that the rally was over and the collapse was in, echoing a similar sentiment heard today. He characterized the current state of asset classes as a mature bull market and noted the S&P is trading at 27x trailing earnings. Despite this, he believes the economy is poised to improve in the coming year. While he does not expect the same types of returns as before, he stressed that earnings in these parts of the economy are growing at a rapid pace, and he thinks the rest of the economy has some room to catch up.
Talking about what specifically will drive that improvement and how much of it is attributable to AI infrastructure, Wieting separated the two and noted that the strength in AI infrastructure is out on its own, with a 42% growth rate, which is the most rapid growth rate since the personal computer was invented. The rest of the economy, however, has been held back; construction has contracted, industrial production in the US has grown only 1%, and manufacturing employment has not increased since March. In contrast, consumer spending has grown 3.5% as of the mid-third-quarter data (when the data collection was halted). Wieting attributed the weakness to business caution and noted that 9 out of 10 industries in the ISM report are concerned about tariffs.
That being said, we’re here with a list of the 12 hot tech stocks to buy according to Wall Street analysts.
Our Methodology
We sifted through different stock screeners to compile a list of the hot tech stocks with the highest performance over the past 3 months (over 25%) and with high upside potential (over 25%). We then selected the 12 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of their average upside potential.
Note: All data was sourced on October 24.
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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
12 Hot Tech Stocks to Buy According to Wall Street Analysts
12. Franklin Wireless Corp. (NASDAQ:FKWL)
3-Month Performance as of October 24: 23.44%
Number of Hedge Fund Holders: 3
Average Upside Potential as of October 24: 21.21%
Franklin Wireless Corp. (NASDAQ:FKWL) is one of the hot tech stocks to buy according to Wall Street analysts. On October 13, Lake Street initiated coverage of Franklin Wireless with a Buy rating and $6 price target. This decision was made by Lake Street even as the firm acknowledged that the very rapid growth seen during the COVID-19 pandemic is unlikely to be repeated.
However, the firm believes that Franklin Wireless is well-positioned to benefit from the expanding mobile hotspot market. Demand is expected to be fueled by the rise of hybrid work models, the growing need for reliable backup internet at home, and general demand for mobile connectivity. Franklin’s status as a lower-cost provider and its US-based headquarters give it an advantage in gaining market traction.
Franklin Wireless Corp. (NASDAQ:FKWL) provides integrated wireless solutions in North America and Asia. The company offers 5G/4G wireless broadband products, such as portable wi-fi mobile hotspot routers, mobile hotspots, fixed wireless routers, and mobile device management/MDM solutions.
11. Core Scientific Inc. (NASDAQ:CORZ)
3-Month Performance as of October 24: 36.85%
Number of Hedge Fund Holders: 78
Average Upside Potential as of October 24: 21.73%
Core Scientific Inc. (NASDAQ:CORZ) is one of the hot tech stocks to buy according to Wall Street analysts. On October 24, Cantor Fitzgerald analyst Brett Knoblauch raised the firm’s price target on Core Scientific to $26 from $18 and kept an Overweight rating on the shares. Knoblauch informed investors that, as shareholders prepare to vote on the proposed acquisition by CoreWeave Inc. (NASDAQ:CRWV), the firm sees two potential scenarios if the deal is voted down: either CoreWeave returns to the negotiation table or Core Scientific independently pursues the HPC path.
Knoblauch maintains that either outcome presents an attractive risk/reward profile for Core Scientific. Earlier on October 22, B. Riley upgraded Core Scientific to Buy from Neutral with a price target of $30, up from $17, as the firm sees a high likelihood that Core Scientific shareholders will vote down the pending takeover. The firm’s $30 price target reflects a standalone value for Core Scientific.
Core Scientific Inc. (NASDAQ:CORZ) provides digital asset mining services in the US through three segments: Digital Asset Self-Mining, Digital Asset Hosted Mining, and HPC Hosting.
CoreWeave Inc. (NASDAQ:CRWV) operates a cloud platform that provides scaling, support, and acceleration for GenAI. It builds the infrastructure that supports compute workloads for enterprises.
Hedge Fund Resource Center