13 Best Hot Stocks To Buy Now

In this article, we discuss 13 best hot stocks to buy now.

The US GDP grew by 2.9% in the fourth quarter of 2022, according to figures from the Commerce Department, topping consensus estimate of 2.8% from economists polled by Dow Jones. This growth was higher than expected, despite concerns about a potential recession. According to the IMF’s latest forecast, the global economic growth is expected to decrease from 3.4% in 2022 to 2.9% in 2023, and then recover to 3.1% in 2024. The 2023 forecast is slightly better than what was predicted in October 2022, but still lower than the average growth rate of 3.8% from 2000-2019. 

The increase in central bank interest rates to curb inflation and the ongoing conflict in Ukraine are affecting global economic activity. The COVID-19 pandemic initially slowed growth in 2022, but the recent easing of restrictions has led to a faster-than-anticipated recovery. The forecast for global inflation is to decrease from 8.8% in 2022 to 6.6% in 2023 and 4.3% in 2024, although it remains higher than pre-pandemic levels of around 3.5%.

Richard Saperstein, the Chief Investment Officer at Treasury Partners, has expressed his belief that the stock market and economy are still facing challenges and are not yet in a secure position. He told Forbes on February 1:

“Markets have been reacting favorably to moderating inflation and expectations of a reduced pace of Fed tightening, but the lag effects of the Fed’s tightening so far will slow the economy in the second half of 2023 and cause analysts to slash earnings estimates, which ultimately is a headwind for stocks.”

As per Forbes, the stock market in China has begun 2023 with strong performance and is expected to continue to improve as the country eases its COVID-19 policies, such as lifting travel restrictions and ending lockdowns. This is due to the growth potential of the world’s second-largest economy. Investors also favor value stocks since they tend to perform better than growth stocks during times of high interest rates. This is because high interest rates affect discounted cash flow valuations, which have a greater impact on high-growth stocks compared to value stocks. In addition to that, utilities, consumer staples, and healthcare stocks are considered to be defensive plays that can reduce overall portfolio risk until economic conditions improve. These stocks are generally less affected by economic fluctuations and can provide stability to an investment portfolio. Some of the best momentum stocks so far in 2023 include Meta Platforms, Inc. (NASDAQ:META), Tesla, Inc. (NASDAQ:TSLA), and Shopify Inc. (NYSE:SHOP). 

Luis Louro / shutterstock.com

Our Methodology 

For this article, we first used stock screeners to identify stocks that have gained at least 50% year to date in 2023 and have an average 3-month volume of more than 5 million as of February 6. From this resultant dataset, we selected 13 hot stocks with the highest hedge fund sentiment. We have assessed the hedge fund sentiment from Insider Monkey’s database of 920 elite hedge funds tracked as of the end of the third quarter of 2022. The list is arranged in ascending order of the number of hedge fund holders in each firm. 

Best Hot Stocks To Buy Now

13. AMC Entertainment Holdings, Inc. (NYSE:AMC)

Average 3-month Volume as of February 6: 30.66 million 

YTD Share Price Gains as of February 6: 63.10%

Number of Hedge Fund Holders: 17

AMC Entertainment Holdings, Inc. (NYSE:AMC) is a Kansas-based company that owns, operates, and has interests in theaters in the United States and Europe. AMC Entertainment Holdings, Inc. (NYSE:AMC), one of the largest movie theater chains in the world, experienced a difficult 2022, with its stock declining 76% due to several factors, including low box-office returns, a shortage of major productions, and changes in theater attendance patterns caused by the ongoing COVID-19 pandemic. Despite the challenges of 2022, the release of Disney’s Avatar: The Way of Water at the end of December gave a boost to both box-office revenue and theater attendance. This has had a positive impact that has continued into the new year. Year-to-date as of February 6, AMC Entertainment Holdings, Inc. (NYSE:AMC) stock has climbed 63%. 

On January 30, AMC Entertainment Holdings, Inc. (NYSE:AMC) filed a proxy with the SEC detailing two proposals that are necessary to convert its preferred equity units into common shares. According to B. Riley analyst Eric Wold, the preferred equity unit holders control 64% of the combined holdings and may not get another chance to extract value from those units. Hence, the analyst expects the proposals to pass, which could open the door for the company to raise more equity in the coming years. This could help AMC Entertainment Holdings, Inc. (NYSE:AMC) eliminate all debt and pursue additional diversification options for growth in the media industry. The analyst has a Neutral rating on AMC’s shares with a $4.50 price target and sees potential for a positive outcome in the mid-March vote.

According to Insider Monkey’s Q3 data, 17 hedge funds were long AMC Entertainment Holdings, Inc. (NYSE:AMC), compared to 18 funds in the last quarter. 

Like Meta Platforms, Inc. (NASDAQ:META), Tesla, Inc. (NASDAQ:TSLA), and Shopify Inc. (NYSE:SHOP),  AMC Entertainment Holdings, Inc. (NYSE:AMC) is one of the best momentum stocks to monitor. 

12. C3.ai, Inc. (NYSE:AI)

Average 3-month Volume as of February 6: 5.62 million 

YTD Share Price Gains as of February 6: 138.12%

Number of Hedge Fund Holders: 18

C3.ai, Inc. (NYSE:AI) is a California-based company that operates as an enterprise artificial intelligence software company in North America, Europe, the Middle East, Africa, the Asia Pacific, and internationally. It is one of the best hot stocks to invest in. On February 6, C3.ai, Inc. (NYSE:AI) shares rose more than 5% as investors continued to pour into artificial intelligence stocks. The year-to-date share price gains as of February 6 came in at more than 138%. 

On February 2, DA Davidson analyst Gil Luria initiated coverage of C3.ai, Inc. (NYSE:AI) with a Buy rating and a $30 price target. The firm considers C3.ai, Inc. (NYSE:AI) to be a valuable asset in the critical software arena of artificial intelligence, as the emergence of generative AI is seen as a crucial application. The analyst believes that C3.ai, Inc. (NYSE:AI) can capitalize on its investment and experience in AI to generate revenue.

According to Insider Monkey’s third quarter database, 18 hedge funds were long C3.ai, Inc. (NYSE:AI), compared to 17 funds in the last quarter. Jim Simons’ Renaissance Technologies is the biggest position holder in the company, with approximately 3 million shares worth $37 million. 

11. SoFi Technologies, Inc. (NASDAQ:SOFI)

Average 3-month Volume as of February 6: 44.13 million

YTD Share Price Gains as of February 6: 64.78%

Number of Hedge Fund Holders: 25

SoFi Technologies, Inc. (NASDAQ:SOFI) is a California-based provider of digital financial services. It operates through three segments – Lending, Technology Platform, and Financial Services. It is one of the best momentum stocks to buy. On January 30, SoFi Technologies, Inc. (NASDAQ:SOFI) stock rose by 8.4% in pre-market trading after the company reported Q4 results that exceeded analyst expectations and the company provided a higher guidance for 2023 adjusted EBITDA. SoFi Technologies, Inc. (NASDAQ:SOFI) is continuing to attract new members for its financial products and is forecasting 2023 adjusted net revenue to be between $1.93 billion to $2.00 billion, compared to the consensus estimate of $1.98 billion. The firm sees adjusted EBITDA of $260 million to $280 million, compared to a consensus of $253.8 million. 

On January 31, Citi analyst Ashwin Shirvaikar stated that SoFi Technologies, Inc. (NASDAQ:SOFI) exceeded expectations in Q4 and has outperformed expectations three times since resetting them for the student loan moratorium push-out from Q1 of 2022. The analyst is positive about SoFi Technologies, Inc. (NASDAQ:SOFI)’s push to achieve GAAP profitability by Q4 2023 and the projected positive contribution margins in its faster-growing Financial Services segment. However, questions about growth and its balance sheet expansion/gain-on-sale will persist. Despite these concerns, Citi maintained a Buy rating on SoFi Technologies, Inc. (NASDAQ:SOFI) shares with a $10 price target.

According to Insider Monkey’s data, 25 hedge funds were long SoFi Technologies, Inc. (NASDAQ:SOFI) at the end of September 2022, compared to 22 in the last quarter. Jim Davidson, Dave Roux, and Glenn Hutchins’ Silver Lake Partners is the leading stakeholder of the company, with 31.15 million shares worth $152 million. 

Here is what Altron Capital Management had to say about SoFi Technologies, Inc. (NASDAQ:SOFI) in its Q4 2021 investor letter:

“We have been building our position in SoFi over the last two quarters but have not yet written about our thesis until now. SoFi is an online financial technology company that started off refinancing student loans. This segment remains a big part of the company’s business, but they have more recently expanded their products to offer an entire suite of financial services including personal banking, investing, and credit. While their collection of products is still evolving and not yet complete, we believe the company is in the early stages of its inflection. The company nearly doubled its member count over the past year and is growing 50%+ despite its loan refinancing business taking a hit due to the COVID-related loan moratorium. Furthermore, the company is close to obtaining a bank charter through its acquisition of Golden Pacific Bancorp, a community bank based in Sacramento. A bank charter would allow SoFi to take in its own customer deposits, lowering its cost of capital and expanding the company’s breadth of financial offerings.

While SoFi is not the only online banking platform out there, we believe it could take a decent share of the financial services market. Banking is a notoriously sticky business, as the inconvenience and hassle of switching banks prevent consumers from jumping to competitors regardless of cost. This is one of the reasons that traditional banks are one of the few businesses to have truly been disrupted by technology. We think SoFi is well on its way to changing that and creating a new paradigm for the future of consumer banking and financial services.

The factors that will ultimately drive consumer adoption of online banking are cost and convenience. In our opinion, SoFi is best positioned to drive consumers away from the legacy banking model. Their one-stop-shop approach for financial services and their lack of a brick-and-mortar branch network to maintain may eventually propel them into becoming one of the larger players in the banking industry in the United States…” (Click here to see the full text)

10. Affirm Holdings, Inc. (NASDAQ:AFRM)

Average 3-month Volume as of February 6: 17.7 million

YTD Share Price Gains as of February 6: 87.47%

Number of Hedge Fund Holders: 26

Affirm Holdings, Inc. (NASDAQ:AFRM) was founded in 2012 and is headquartered in San Francisco, California. The company’s platform for digital and mobile-first commerce includes point-of-sale payment solutions for consumers, merchant commerce solutions, and a consumer-centric app. On February 1, Deutsche Bank analyst Bryan Keane increased the firm’s price target on Affirm Holdings, Inc. (NASDAQ:AFRM) from $11 to $18, while maintaining a Hold rating on the shares. The analyst believes that there is “more muted upside” compared to consensus estimates and the company’s guidance for both Q2 and the fiscal year 2023 due to the potential for an upcoming economic slowdown. However, the price target was raised to reflect the recent increase in valuations among consumer lending fintechs in the same peer group.

According to Insider Monkey’s data, 26 hedge funds held long positions in Affirm Holdings, Inc. (NASDAQ:AFRM) as of the end of Q3 2022, compared to 27 funds in the last quarter. Colin Moran’s Abdiel Capital Advisors is a significant position holder in the company, with 2.17 million shares worth $40.7 million. Affirm Holdings, Inc. (NASDAQ:AFRM) is one of the best momentum stocks to buy according to smart investors. 

Here is what Bireme Capital specifically said about Affirm Holdings, Inc. (NASDAQ:AFRM) in its Q2 2022 investor letter:

“We recently covered our short position in Affirm Holdings, Inc. (NASDAQ:AFRM) after a rapid decline brought the share price to ~$30 – down from our entry point above $100 – in only 7 months. We discussed Affirm in our Q4 letter, saying the following:

Affirm is a “Buy Now, Pay Later” (BNPL) company founded by former PayPal CTO and cofounder Max Levchin. They provide installment loans to consumers, partnering with retail companies looking to drive higher sales. They have two primary products: a zero-fee installment loan for consumers with the best credit scores, and a more traditional product with 20%+ interest rates for subprime borrowers. Their stated plan is to disrupt the credit industry with more transparent, lower-fee loans. At a roughly $28b market cap at the start of 2022, AFRM stock was priced at more than 20x trailing sales, a steep price for a money-losing lender. While their early lead in online BNPL transactions and partnerships with fast-growing retailers like Peloton has fueled significant historical growth, a wave of competition has arrived… While the stock has already fallen sharply from where we initiated our short position, we think it could fall another ~40% to trade at 8x FY2022 sales.

Interestingly, not much has changed about Affirm’s business from when it sported a $28b market cap. Estimates for 2022 sales have been inching up, from $1.25b at the start of the year to $1.35b today. And analysts estimate that the company will lose about $150m of EBITDA this year, slightly better than estimates in January. Rather than a story of deteriorating business fundamentals, this was a story of market participants simply deciding that a fast-growing, money-losing subprime lender – even a disruptive one – with around $1b of revenues should not be worth twenty-eight billion dollars. We think the current valuation is much more reasonable, and we do believe that Affirm will eventually generate profits from its lending platform, so we covered our short position.”

9. Coinbase Global, Inc. (NASDAQ:COIN)

Average 3-month Volume as of February 6: 17.28 million

YTD Share Price Gains as of February 6: 119.52%

Number of Hedge Fund Holders: 28

Coinbase Global, Inc. (NASDAQ:COIN) offers technology and financial infrastructure for the global crypto economy. It was founded in 2012 and is based in Wilmington, Delaware. Coinbase Global, Inc. (NASDAQ:COIN) is one of the best momentum stocks to monitor. Year to date, the stock has climbed nearly 120% as of February 6 and the average 3-month trading volume came in at 17.28 million.  

On January 20, JPMorgan analyst Kenneth Worthington raised the firm’s price target for Coinbase Global, Inc. (NASDAQ:COIN) from $53 to $60 and maintained a Neutral rating on the shares. The analyst stated that the recent surge in cryptocurrency prices in early 2023 has had a positive impact on broker/exchanges like Coinbase, as higher volumes and prices help the company’s performance. He believes that although the crypto ecosystem has had credibility issues, Coinbase Global, Inc. (NASDAQ:COIN) has emerged with its credibility and brand strengthened compared to other brokers/exchanges following the collapse and bankruptcy of FTX.

According to Insider Monkey’s Q3 data, 28 hedge funds were bullish on Coinbase Global, Inc. (NASDAQ:COIN), compared to 29 funds in the last quarter. Cathie Wood’s ARK Investment Management is the largest stakeholder of the company, with 7.71 million shares worth $497.6 million. 

Here is what Miller Value Partners Opportunity Trust Fund has to say about Coinbase Global, Inc. (NASDAQ:COIN) in its Q2 2022 investor letter:

“Coinbase Global Inc. Ordinary Shares (NASDAQ:COIN) fell during the quarter as the crypto markets continued to suffer. While the company reported disappointing results, it committed to capping EBITDA losses at $500M even in the event of “a prolonged market downturn”. COIN’s ample liquidity ($6b in cash on hand) should enable them to survive a prolonged “crypto winter” and invest to strengthen the business in the downturn. While the crypto market is early in its adoption, Coinbase is focused on building the platform for crypto not only supporting trading, and cold storage, but moving into NFTs, staking, and crypto derivatives. We see tremendous upside potential for COIN over the next decade if they are able to successfully execute on their platform strategy.”

8. Transocean Ltd. (NYSE:RIG)

Average 3-month Volume as of February 6: 22.52 million

YTD Share Price Gains as of February 6: 58.56%

Number of Hedge Fund Holders: 36

Transocean Ltd. (NYSE:RIG) was founded in 1926 and is based in Steinhausen, Switzerland. The company provides offshore contract drilling services for oil and gas wells worldwide. On January 4, Transocean Ltd. (NYSE:RIG) announced that it has secured contract awards and extensions for five of its drilling rigs, which will result in a total of $488 million in firm order backlogs. It is one of the best momentum stocks to consider buying. 

On January 25, BTIG analyst Gregory Lewis raised the firm’s price target for Transocean Ltd. (NYSE:RIG) to $10 from $8 and maintained a Buy rating on the shares. The analyst noted that the offshore drilling market is undergoing an ongoing upcycle, with leading edge drillship day rates having more than doubled since early 2021 to over $450,000 per day, which is the highest level since 2015. BTIG expects that with drillship day rates consistently above $400,000, there will likely be more drillship reactivations in the coming year.

According to Insider Monkey’s Q3 data, 36 hedge funds were bullish on Transocean Ltd. (NYSE:RIG), compared to 28 funds in the earlier quarter. Stephen Mildenhall’s Contrarius Investment Management is the largest stakeholder of the company, with 27.7 million shares worth $68.4 million. 

7. Lyft, Inc. (NASDAQ:LYFT)

Average 3-month Volume as of February 6: 15.63 million

YTD Share Price Gains as of February 6: 57.46%

Number of Hedge Fund Holders: 37

Lyft, Inc. (NASDAQ:LYFT) is a California-based company that runs a platform connecting passengers with drivers for ride sharing services in North America. The firm manages transportation networks that provide customers with tailored, on-demand access to different transportation options. It is one of the premier momentum stocks to invest in. 

On January 30, MoffettNathanson analyst Michael Morton initiated coverage of Lyft, Inc. (NASDAQ:LYFT) with a Market Perform rating and a $15 price target. The company’s growth at all costs over the past decade is now behind it and the toughest times are over, the analyst wrote in a research note. He believes that the leading companies in the gig economy are becoming firmly established, marketing efforts are reducing, and consolidation is taking place in the U.S. market. However, MoffettNathanson argued that Lyft, Inc. (NASDAQ:LYFT) is at a disadvantage compared to Uber’s mobility and delivery network effect. 

According to Insider Monkey’s Q3 data, 37 hedge funds were bullish on Lyft, Inc. (NASDAQ:LYFT), compared to 35 funds in the prior quarter. Ken Fisher’s Fisher Asset Management is the leading position holder in the company, with 11.7 million shares worth $154.4 million.

Here is what Artisan Partners specifically said about Lyft, Inc. (NASDAQ:LYFT) in its Q2 2022 investor letter:

Lyft, Inc. (NASDAQ:LYFT), the second-largest ride-hailing company in the US, connects riders and drivers over a mobile app. When we began our GardenSM campaign, our thesis was based on a likely strong ridership recovery post-pandemic, as well as management’s growing focus on increasing profitability after years of heavy investment. While the company has made some progress on margins as the economy has re-opened, driver shortages and fuel inflation have disrupted that progress. Given uncertainty around when these cost pressures could abate, we exited our position.

6. Carvana Co. (NYSE:CVNA)

Average 3-month Volume as of February 6: 30.49 million

YTD Share Price Gains as of February 6: ​​184.88%

Number of Hedge Fund Holders: 43

Carvana Co. (NYSE:CVNA) is an Arizona-based company that operates an e-commerce platform for buying and selling used cars in the United States. On January 26, JMP Securities analyst Nicholas Jones maintained an Outperform rating on Carvana Co. (NYSE:CVNA) but lowered the firm’s price target on the shares to $15 from $25 as part of a broader research note on Internet and Digital Media. The analyst believes that current projections for Carvana Co. (NYSE:CVNA)’s earnings and revenue may still be overly optimistic based on the volume of new and used vehicles sold, the average price of vehicles, and the availability of inventory. 

According to Insider Monkey’s data, Carvana Co. (NYSE:CVNA) was part of 43 hedge fund portfolios at the end of September 2022, compared to 47 funds in the prior quarter. Clifford A. Sosin’s CAS Investment Partners is the largest stakeholder of the company, with 6.8 million shares worth $138.6 million. 

In addition to Meta Platforms, Inc. (NASDAQ:META), Tesla, Inc. (NASDAQ:TSLA), and Shopify Inc. (NYSE:SHOP), Carvana Co. (NYSE:CVNA) is one of the hottest stocks in the market. 

Miller Value Partners made the following comment about Carvana Co. (NYSE:CVNA) in its Q4 2022 investor letter:

“Carvana Co. (NYSE:CVNA) 10.25% 5/1/2030 was the top detractor for the quarter. The auto retailer reported 3Q22 revenue of $3.39B, -2.7% Y/Y, below consensus of $3.71B, and gross profit per unit (GPU) of $3.5K, +4.2% sequentially, but -25.1% Y/Y, and below consensus of $3.74K. Adjusted EBITDA for the quarter came in at -$186MM, compared to 3Q21 EBITDA of $20MM, as the company sold 102.6K retail units in the quarter, -8.4% Y/Y. Management noted it has made strong progress in reducing selling, general, and administrative (SG&A) expenses on an absolute dollar basis, as the company is still striving to eventually achieve total GPU in excess of $4K and significant adjusted EBITDA profitability at current volume levels, although the timeline for achieving these goals is uncertain. During the quarter, multiple creditors, including Apollo and PIMCO, which account for ~70% of Carvana’s total outstanding unsecured debt, agreed to a cooperation agreement in the event of any debt restructuring negotiations with the company.”

5. Peloton Interactive, Inc. (NASDAQ:PTON)

Average 3-month Volume as of February 6: 13.62 million

YTD Share Price Gains as of February 6: 90.79%

Number of Hedge Fund Holders: 45

Peloton Interactive, Inc. (NASDAQ:PTON) is a New York-based company that operates interactive fitness platforms in North America and internationally, under the Peloton Bike, Peloton Bike+, Peloton Tread, and Peloton Tread+ names. Peloton Interactive, Inc. (NASDAQ:PTON) is one of the best momentum stocks to monitor. For FQ3 2023, the company expects revenue in the range of $690 million to $715 million, versus a consensus of $694.51 million. 

On February 2, Needham analyst Bernie McTernan increased the firm’s target price for Peloton Interactive, Inc. (NASDAQ:PTON) to $20 from $14 while maintaining a Buy rating after the release of its Q2 results. The analyst noted that the company’s revenue exceeded expectations and progress has been made in improving product gross margins. The analyst pointed out that previously, declining product margins and rising fixed costs overshadowed the benefits of a Peloton subscription, but this trend is now diminishing.

According to Insider Monkey’s data, Peloton Interactive, Inc. (NASDAQ:PTON) was part of 45 hedge fund portfolios as of the end of the third quarter of 2022, compared to 39 in the prior quarter. Anand Desai’s Darsana Capital Partners is a prominent stakeholder of the company, with 10 million shares worth $69.30 million. 

Here is what Merion Road Capital specifically said about Peloton Interactive, Inc. (NASDAQ:PTON) in its Q3 2022 investor letter:

“Peloton Interactive, Inc. (NASDAQ:PTON) is quite a different story. You may recall from my Q1 letter that I initiated a position in the stock given the potential for a new CEO to leverage the company’s passionate and engaged user base. The investment had meaningful upside potential (multiples of the then trading price), but also presented real downside risk; as such, I kept our exposure to just a few percentage points of the portfolio. Fast forward six months and underlying trends like churn, engagement, and new users weakened dramatically. I sold our shares as the likelihood for the company to achieve financial success has become increasingly remote.”

4. Warner Bros. Discovery, Inc. (NASDAQ:WBD)

Average 3-month Volume as of February 6: 28.81 million

YTD Share Price Gains as of February 6: 60.64%

Number of Hedge Fund Holders: 61

Warner Bros. Discovery, Inc. (NASDAQ:WBD) is a New York-based media company that delivers content across multiple platforms in around 50 languages worldwide. It creates, develops, and distributes feature films, television shows, video games, and other content in a variety of physical and digital formats through basic networks, direct-to-consumer channels, theatrical releases, TV programming, and gaming licenses. Warner Bros. Discovery, Inc. (NASDAQ:WBD) is one of the best momentum stocks to consider. 

On January 31, Macquarie analyst Tim Nollen raised the firm’s price target on Warner Bros. Discovery, Inc. (NASDAQ:WBD) to $20 from $16 and kept an Outperform rating on the shares as part of the firm’s Q4 media networks preview. The results “may be challenging,” but the firm believes that the negative impact of the merger is “over” and that the upcoming combined HBO Max/Discovery+ streaming service has the potential to showcase the value of its content and distribution assets. Macquarie considers Warner Bros. Discovery, Inc. (NASDAQ:WBD) to be its top choice in the media industry.

According to Insider Monkey’s third quarter database, 61 hedge funds were long Warner Bros. Discovery, Inc. (NASDAQ:WBD), compared to 68 funds in the last quarter. 

O’keefe Stevens Advisory made the following comment about Warner Bros. Discovery, Inc. (NASDAQ:WBD) in its Q4 2022 investor letter:

“Several positions within the portfolio deserve some reflection; however, the one deserving the most attention is Warner Bros. Discovery, Inc. (NASDAQ:WBD). Not surprisingly, it was one of the worst-performing stocks in our portfolio over the past year.

Warner Brothers Discovery (WBD) – One concept learned from Jeremy Raper at Raper Capital (@Puppyeh1 on Twitter) is “when there’s a massive pivot in biz model and under-delivery vs. clear IPO targets, it’s generally a big red flag.” While WBD is not a recent IPO, it went through a dramatic business model change. I recall two examples of companies that pivoted strategies…” (Click here to read the full text)

3. Shopify Inc. (NYSE:SHOP)

Average 3-month Volume as of February 6: 21.29 million

YTD Share Price Gains as of February 6: 46.95%

Number of Hedge Fund Holders: 62

Shopify Inc. (NYSE:SHOP) is a Canadian commerce company that offers a commerce platform and services in Canada, the United States, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. On January 3, Shopify Inc. (NYSE:SHOP) launched a new integration aimed at large retailers. The Canadian e-commerce company stated that its new Commerce Components will enable big retailers to incorporate parts of Shopify into their own current systems. This move is a significant step towards establishing partnerships with major retailers and increasing the appeal of its technology for smaller retailers and sellers.

On February 1, Scotiabank analyst Kevin Krishnaratne initiated coverage of Shopify Inc. (NYSE:SHOP) with a Sector Perform rating and a $43 price target. The analyst thinks that Shopify Inc. (NYSE:SHOP) should be a key technology holding because it is a leading player in the process of transforming the retail industry. However, the neutral rating reflects the stock’s high valuation following a 40% increase in its value this year, as well as its proximity to double the September lows. The analyst wrote in its research note that while the recent rise in subscription plan prices might result in some upward revisions to revenue estimates for the Subscription Solutions division, there are still risks to revenue for the Merchant Solutions division because of declining consumer spending trends.

According to Insider Monkey’s data, 62 hedge funds were long Shopify Inc. (NYSE:SHOP) at the end of the third quarter of 2022, compared to 60 funds in the prior quarter. Cathie Wood’s ARK Investment Management is the largest position holder in the company, with 14.5 million shares worth $391.50 million. 

Artisan Partners made the following comment about Shopify Inc. (NYSE:SHOP) in its Q3 2022 investor letter:

“Shopify Inc. (NYSE:SHOP) is a leading e-commerce platform supporting over 2 million merchants with software, online storefronts and payments technology. Like Uber, Shopify returned to mid-cap territory during Q2 as the company’s profit cycle and share price have faced significant pressure. Earlier this year, the company began a phase of investments to support a range of future growth drivers, including Shopify Plus for larger brands, logistics services, international expansion, point-of-sale payments and social media-based commerce. With high inflation putting pressure on consumer spending, and with e-commerce activity normalizing after a massive pandemic spike, Shopify’s earnings have fallen sharply. While we have outstanding questions about the likelihood of success for the company’s capital-intensive logistics investments, we decided to take advantage of the stock’s >75% YTD decline and initiate a GardenSM position at a deep discount to our PMV estimate. Our thesis is predicated on our belief there is still a long runway for commerce to move online, and Shopify is well-positioned to win share of this market. The company has created an ecosystem of products (payment processing, financing, shipping, customer engagement tools, etc.), partners (TikTok, Google, Meta), sales channels and over 6,000 apps to help its merchants sell online and establish direct relationships with customers.”

2. Tesla, Inc. (NASDAQ:TSLA)

Average 3-month Volume as of February 6: 149.29 million

YTD Share Price Gains as of February 6: 79.51%

Number of Hedge Fund Holders: 88

Tesla, Inc. (NASDAQ:TSLA) is a company that creates, designs, manufactures, and sells electric cars, energy storage, and generation systems worldwide, including in the United States and China. Tesla, Inc. (NASDAQ:TSLA) sold 66,051 electric vehicles manufactured in China in January, according to data from the China Passenger Car Association. The company intends to produce an average of 20,000 units per week at its Shanghai factory for the next two months. It is one of the best momentum stocks to invest in. 

On February 6, RBC Capital analyst Tom Narayan raised the price target on Tesla, Inc. (NASDAQ:TSLA) to $223 from $186 and maintained an Outperform rating on the shares. He believes that Tesla, Inc. (NASDAQ:TSLA)’s ability to drive demand and maintain margins above 20% is a positive factor for the company’s short and long-term prospects. The analyst is also cautious about the sustainability of competitor’s price cuts in light of declining profit margins.

According to Insider Monkey’s data, 88 hedge funds were bullish on Tesla, Inc. (NASDAQ:TSLA) at the end of the third quarter of 2022, compared to 73 funds in the prior quarter. Philippe Laffont’s Coatue Management is a significant position holder in the company, with 3.5 million shares worth $940.5 million. 

Alger Capital made the following comment about Tesla, Inc. (NASDAQ:TSLA) in its Q4 2022 investor letter:

“Tesla, Inc. (NASDAQ:TSLA) is an electric vehicle manufacturer with a significant technological lead in its large and rapidly growing addressable market. Shares underperformed during the quarter as it confronted transportation capacity issues that caused deliveries to fall short of estimates, as well as developing demand softness. Moreover, the demand softness became evident in increased Model 3 and Y discounts, the introduction of supercharging credits, some consumers deferring purchases until the Inflation Reduction Act EV purchase incentives become effective in January 2023, and other consumers who may be influenced by higher financing rates or deterred from initiating a high-ticket purchase. Despite these near-term difficulties, we remain constructive on EV innovation, adoption, and Tesla’s growth prospects over the long-term.”

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

Average 3-month Volume as of February 6: 36.88 million

YTD Share Price Gains as of February 6: 49.88%

Number of Hedge Fund Holders: 177

Meta Platforms, Inc. (NASDAQ:META) is one of the hottest stocks to invest in. On February 2, Meta Platforms, Inc. (NASDAQ:META) saw a 22% increase in its stock price after the release of better-than-expected fourth-quarter results and positive guidance. The company is close to reaching a $500 billion market capitalization. Meta expects first quarter 2023 total revenue to be in the range of $26 billion to 28.5 billion, versus a $27.25 billion consensus. 

On February 2, Deutsche Bank analyst Benjamin Black raised the firm’s price target on Meta Platforms, Inc. (NASDAQ:META) to $200 from $125 and maintained a Buy rating on the shares. The analyst believes that the company’s fourth quarter results show that its challenges are temporary and that its investments in privacy preserving solutions and growing on-platform signals, combined with increased Reels monetization, will help overcome these challenges in the long run.

According to Insider Monkey’s third quarter database, 177 hedge funds were long Meta Platforms, Inc. (NASDAQ:META), compared to 185 funds in the last quarter. Ken Fisher’s Fisher Asset Management is the leading position holder in the company, with 11.8 million shares worth $1.60 billion. 

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

“Even if sector weightings explain most of our underperformance, I made some dubious decisions during the year. Most notably, I added to our holding in Meta Platforms, Inc. (NASDAQ:META), which declined 64% for the year. Meta began the year as a 4.3% weighting and ended as a 2.5% weighting, despite our incremental purchases.

I got plenty wrong about Meta, including the magnitude of the impact that Apple’s changes to privacy tracking would have on Meta’s value to advertisers. Meta’s two giant social media platforms, Facebook and Instagram, arguably may be weaker businesses than they were a year ago, thanks to Apple and the rising popularity of TikTok. Nevertheless, Meta remains an enormously profitable enterprise, with firehose levels of cash flow. It may be squandering some of that cash flow trying to develop the metaverse, but expense control problems are easier to address than a lack of cash flow. Belatedly, CEO Mark Zuckerberg seems to have recognized the need to match expense growth a little more closely to revenue growth. I never want to see anyone lose their job, but Meta hired many thousands of people to support growth that may not materialize. When Meta announced layoffs late in 2022, the stock began to recover.

To repeat what I wrote to you last quarter, aside from Meta, I don’t see any of our bottom five performers losing market share or competitive position.”

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Disclosure: None. 13 Best Hot Stocks To Buy Now is originally published on Insider Monkey.