In this article, we will take a look at the 15 best beginner stocks to buy now.
The Federal Reserve’s September meeting and Jerome Powell’s tone afterwards has dampened hopes of a soft landing. The central bank’s battle against inflation is far from over and there are many other challenges that are coming to hit the economy in the coming months. According to a report by Fortune, Jesse Wheeler, senior economist at the decision intelligence firm MorningConsult, recently warned that the market could face several challenges as the analyst sees “storm clouds out there forming.”
One of these storms could be the threat of government shutdown (yet again). Some other challenges highlighted by analysts include rising oil prices and the UAW strike that is hitting major automakers in the US. The Fortune report cited Wells Fargo senior economist Mike Pugliese, who said that the impact of a possible government shutdown would be severe.
“While there is never a good time for the federal government to shut down, the potential for one in the current economic environment is more concerning. Not only would a shutdown reduce economic growth modestly, but it would create a data vacuum at a time when the path ahead for the economy is highly uncertain,” Pugliese said.
But markets are almost always facing some sort of storms. For beginner investors, it all boils down to finding solid companies and waiting it out.
Methodology
For this article, we first listed all the holding of the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) and then gauged hedge fund sentiment for all these stocks using Insider Monkey’s database of 910 hedge funds. We then picked 15 stocks with the highest number of hedge fund investors. We skipped companies that are cyclical, are about to acquired or are going through a lot of volatility and uncertainties. Analysts and experts recommend beginner investors to have exposure to broader market ETFs to have a safety cushion and almost guaranteed gains (albeit small) over longer periods of time. That’s why we decided to use the holdings data of the SPY ETF.
Best Beginner Stocks To Buy Now
15. Adobe Inc. (NASDAQ:ADBE)
Number of Hedge Fund Holders: 109
Adobe Inc. (NASDAQ:ADBE) ranks 15th in our list of the best beginner stocks to buy now. Adobe Inc. has strong growth catalysts on the back of its AI offerings. Adobe Inc. earlier this year introduced an AI product suite and is also integrating several generative AI features in its existing products.
As of the end of the second quarter of 2023, 109 hedge funds tracked by Insider Monkey reported having stakes in the company. The biggest stakeholder of Adobe during this period was Ken Griffin’s Citadel Investment Group which owns a $658 million stake in the company.
Harding Loevner Global Equity Strategy made the following comment about Adobe Inc. in its Q2 2023 investor letter:
“Although the market initially feared that Adobe Inc. (NASDAQ:ADBE) would lose out to Al image-generating programs Dall-E, Midjourney, and Stable Diffusion, the design-software giant has since released its own generative Al model called Firefly. One feature of Firefly is that it can help designers generate ideas and create and manipulate images more quickly in Photoshop or Illustrator that can then be processed by other Adobe products for further development, fostering a seamless workflow. There’s more work involved when trying to manipulate images created by outside tools. Also, because Firefly is trained on Adobe’s vast inventory of stock images and other licensed content, it can generate professional-quality, commercially viable results, further setting it apart from generic models that are often trained on copyrighted content that isn’t properly licensed. These are just two examples of how Al enhances the Adobe suite, which should allow the company to raise subscription prices and upsell users.”
14. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 111
UnitedHealth Group Incorporated (NYSE:UNH) is one of the safest stocks out there. The healthcare services company is operating in an industry that is resilient and does not feel drastic effects of broader market downturns. The company has increased its dividends consistently for the last 14 years now.
Insider Monkey’s database of 910 hedge funds shows that 111 hedge funds reported owning stakes in UNH. The most significant stakeholder of the firm during this period was Rajiv Jain’s GQG Partners which owns a $2.4 billion stake in the company.
Mairs & Power Growth Fund made the following comment about UnitedHealth Group Incorporated in its second quarter 2023 investor letter:
“Notable detractors to performance in the first half were US Bank (USB), Charles Schwab (SCHW), and UnitedHealth Group Incorporated (NYSE:UNH), which were down 22.09%, 31.65%, and 8.65%, respectively. Another detractor from relative performance was UnitedHealth Group, which was down 8.65%. However, we have a positive long-term view of the company, headquartered in Minnesota, and especially its potential when it comes to harnessing its vast amounts of patient data via AI. Additionally, its Optum unit, which provides technology and data-driven care delivery, has AI-enabled tools that can help healthcare providers drive more efficient and accurate care to patients.”
13. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 112
Advanced Micro Devices, Inc. (NASDAQ:AMD) is one of the best stocks to buy for long-term growth. Analysts believe Advanced Micro Devices, Inc. will launch several new products to grab the lucrative generative AI market in the coming weeks and months. Advanced Micro Devices, Inc. would be the biggest competitor to Nvidia in the AI chips market.
As of the end of the second quarter of 2023, 112 hedge funds out of the 910 hedge funds tracked by Insider Monkey had stakes in AMD. The most significant stakeholder of the company was Philippe Laffont’s Coatue Management which owns a $1.6 billion stake in the company.
L1 Capital International Fund made the following comment about Advanced Micro Devices, Inc. in its second quarter 2023 investor letter:
“During the June 2023 quarter the AI bubble continued to inflate. Advanced Micro Devices, Inc. (NASDAQ:AMD), as a key challenger to Nvidia, will benefit from increased demand for its next generation semiconductor chips. AMD’s share price is reflecting very bullish sentiment and the share price has run ahead of a reasonable base case valuation. Accordingly, we divested our entire position and moved AMD to our Bench.”
12. JPMorgan Chase & Co (NYSE:JPM)
Number of Hedge Fund Holders: 106
JPMorgan Chase & Co is a strong dividend-paying bank stock with stability and strong fundamentals. JPMorgan Chase & Co shares have gained about 38% over the past 12 months. Thanks to its size and dominance, JPMorgan Chase & Co usually does not feel any effects of banking sector jitters since depositors flock to major banks like JPMorgan when small banks falter.
11. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 122
Salesforce Inc (NYSE:CRM) is one of the top stocks to buy for beginners. Salesforce Inc earlier this year launched several new features for its CRM platform. Salesforce Inc recently held its Dreamforce conference and investment firm Baird praised the event. Baird analyst Rob Oliver said he came out of the event feeling positive about the company’s AI offerings. The analyst has a $220 price target and a Neutral rating on the stock.
Salesforce Inc CEO Marc Benioff in Q2 earnings call talked about Salesforce’s generative AI initiatives in detail and said:
“We’re democratizing generative AI, making it very easy for our customers to implement every job, every business in every industry. And I will just say that in the last few months, we’ve injected a new layer of generative AI assistance across all of the Customer 360. And you can see it with our salespeople who are now using our Sales Cloud GPT, which has been incredible, what we’ve released this quarter to all of our customers and here inside Salesforce. And then when we see that, they all say to themselves, you know what, in this new world, everyone can now be in Einstein. But democratizing generative AI at scale for the biggest brands in the world requires more than — that’s just these large language models and deep learning algorithms, and we all know that because a lot of our customers kind of think and they have tried and they go and they pull something off a Hugging Face, it is an amazing company.
We just invested in their new round and grab a model and put some data in it and nothing happens. And then they don’t understand and they call us and say, hey, what’s happening here? I thought that this AI was so amazing and it’s like, well, it takes a lot to actually get this intelligence to occur. And that’s what I think that’s the value that Salesforce is bringing is that we’re really able to help our customers achieve this kind of technological superiority right out of the box just using our products in a low code, no code way. It’s really just democratization of generative AI at scale. And that is really what we’re trying to achieve that at the heart of every one of these AI transformations becomes our intelligent, integrated and incredible Salesforce platform, and we’re going to show all of that at Dreamforce.”
Read the full earnings call transcript here.
Harding Loevner Global Equity Strategy made the following comment about Salesforce, Inc. in its Q2 2023 investor letter:
“Salesforce, Inc. (NYSE:CRM), a company we’ve owned since 2019, recently added ChatGPT-like capabilities onto its existing Al module, Einstein, to support its internal sales efforts and customer-facing software. For example, Einstein GPT can help generate marketing emails tailored to specific clients by using Salesforce’s customer database and past email correspondence to learn the most effective approach for each client. Einstein GPT is also different from off-the-shelf LLMS in three important ways: It keeps personal identifiable information private and secure, compared with external tools that retain anything a user enters. It employs the latest data in Salesforce’s system, as opposed to the sometimes-stale public data that train generic models. And generative Al capabilities can be integrated with other Salesforce offerings; the company has already introduced Slack GPT and Tableau GPT, Al-equipped versions of its workplace collaboration and analytics tools.”
10. Thermo Fisher Scientific Inc (NYSE:TMO)
Number of Hedge Fund Holders: 103
Pharma instruments company Thermo Fisher Scientific Inc (NYSE:TMO) ranks 10th in our list of the best beginner stocks to buy now.
As of the end of the second quarter of 2023, 103 hedge funds tracked by Insider Monkey had stakes in the company. The most significant stakeholder of the firm was Chris Hohn’s TCI Fund Management which owns a $1.7 billion stake in Thermo Fisher Scientific Inc.
9. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 135
Apple Inc. (NASDAQ:AAPL) ranks 9th in our list of the best beginner stocks to buy now. A total of 135 hedge funds out of the 910 hedge funds tracked by Insider Monkey had stakes in Apple Inc.. The biggest stakeholder of the company was Warren Buffett’s Berkshire Hathaway which owns a $178 million stake in the company.
Apple Inc. is ramping up its AI efforts and diversifying its revenue base into services and software. Tim Cook recently said Apple Inc. will be hiring AI experts in the UK.
8. Mastercard Incorporated (NYSE:MA)
Number of Hedge Fund Holders: 139
Mastercard Incorporated (NYSE:MA) is one of the best beginner stocks to buy now. In July the company posted second quarter results. Adjusted EPS in the quarter came in at $2.89, beating estimates by $0.06. Revenue in the period jumped 14% year over year to $6.3 billion, beating estimates by $130 million.
Insider Monkey’s database of 910 hedge funds shows that 139 hedge funds had stakes in Mastercard. The biggest stakeholder of Mastercard was Charles Akre’s Akre Capital Management which owns a $2.4 billion stake in the company.
Baron FinTech Fund made the following comment about Mastercard Incorporated in its second quarter 2023 investor letter:
“We modestly trimmed Visa Inc., Mastercard Incorporated (NYSE:MA), and Accenture plc to manage the position sizes and raise capital to fund purchases elsewhere. These stocks remain full-sized positions and high-conviction ideas in the Fund.
Another fintech industry trend we’re seeing is a pickup in M&A activity, most notably in the payments sector. The year started with Nuvei’s $1.3 billion acquisition of Paya announced in January. In April, Network International received an initial takeover offer from a group of private equity firms, which was then topped by Brookfield Asset Management whose $2.8 billion offer was accepted by the Board in June. Following reports earlier this year of a bidding war between Visa Inc. and Mastercard Incorporated to acquire cloud-based issuer processor and core banking software provider Pismo.”
7. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 152
Alphabet Inc. (NASDAQ:GOOG) is one of the best stocks for long-term investors. Alphabet Inc.’s AI investments are expected to bear fruit in the future. The company’s Cloud business and other high-growth ventures are expected to materialize into strong profit-making businesses in the future.
As of the end of the second quarter of 2023 152 hedge funds had stakes in Alphabet Inc.. The most significant stakeholder of the company was Natixis Global Asset Management’s Harris Associates which owns a $3.2 billion stake in the company.
6. Visa Inc. (NYSE:V)
Number of Hedge Fund Holders: 171
Visa Inc. (NYSE:V) is one of the top stocks for beginner investors. Visa Inc. enjoys dominance in the payments business which keeps thriving even when the economy is going through tough times.
Visa Inc.’s payment volumes in August jumped 7% year over year.
5. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 175
Nvidia is expected to remain a dominant player in the AI chips market for several years to come. In later August Phillip Securities upgraded the stock to Buy from Accumulate with a $645 price target, up from $440. The firm likes Nvidia’s data center strengths and its monopoly-like status in the generative AI chips space.
Harding Loevner Global Equity Strategy made the following comment about NVIDIA Corporation (NASDAQ:NVDA) in its Q2 2023 investor letter:
NVIDIA Corporation (NASDAQ:NVDA) has been the biggest beneficiary this year in terms of its stock run and projected revenue gains. More companies- including, perhaps, some not yet in existence-will certainly join the ranks over time.
In the meantime, NVIDIA has emerged as the unrivaled global leader in providing the technologies at the center of the Al arms race. NVIDIA’s competitive advantage is the result of investments that began two decades ago, when it recognized an early opportunity to repurpose its video-game graphics chips for the heavy-load computing done in scientific research. This led management to expand the GPU business. It also spent years and significant resources developing a free software platform that’s exclusive to its chips called CUDA that allows developers to easily program its GPUs for a variety of computationally intensive applications. Researchers then began using both NVIDIA’s chips and CUDA to train the human-brain-inspired neural networks that power Al models.
Now, due to an explosion of demand related to generative Al and LLMs from across its customer base, NVIDIA projects that data-center revenue for its fiscal second quarter ending in July will surge to US$11 billion. Not only is that more than double last quarter’s total, but the forecast also shattered the average analyst estimate that called for about US$7 billion. Taking advantage of the stock’s meteoric rise, we reduced our holding (it has risen tenfold since we first purchased in 2018)…” (Click here to read the full text)
4. Berkshire Hathaway Inc Class A (NYSE:BRK.A)
Number of Hedge Fund Holders: 109
Having exposure to Berkshire is like investing in an ETF because the company, led by the Oracle of Omaha, is diversified across several sectors. This diversification makes the stock suitable for beginners.
As of the end of the second quarter of 2023, 109 hedge funds tracked by Insider Monkey had stakes in the company.
3. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 225
Meta Platforms is going all in on AI and the company’s huge investments in the technology along with its social media dominance make it a perfect stock for beginners. Wall Street analyst are praising the stock after Meta Connect event, in which the company’s emphasis remained on AI offerings. Morgan Stanley analyst Brian Nowak said Meta’s new AI technologies should create new opportunities and monetization avenues.
Artisan Global Value Fund made the following comment about Meta Platforms, Inc. (NASDAQ:META) in its Q2 2023 investor letter:
“Our best performing stocks this quarter were Meta Platforms, Inc. (NASDAQ:META), Alphabet and Heidelberg Materials. Meta was the largest contributor to performance. Its shares have almost fully recovered from last year’s declines, rising 35% during the quarter and 138% YTD. During the quarter, the company reported earnings that showed a return to growth and healthy user engagement metrics. Most importantly, profitability appears to have stabilized and is poised to improve as significant cost reduction actions implemented over the past six months begin to have an impact. Separate from fundamental performance, there is excitement over AI’s potential to help the company’s business. While Meta’s technology prowess and massively scaled media platform certainly position the company to take advantage of AI, we believe it’s far too early to estimate any discrete tangible benefits. Overall, we view AI as one of several drivers that will contribute to Meta’s continued growth.”
2. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 278
D.A. Davidson recently reiterated its buy rating on Amazon, citing the company’s AI prowess. D.A. Davidson analyst Tom Forte has a $150 price target on the stock.
Insider Monkey’s database of 910 hedge funds shows that 278 hedge funds reported owning stakes in Amazon as of the end of the second quarter. The biggest stakeholder of the firm was Natixis Global Asset Management’s Harris Associates which owns a $2 billion stake in the company.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 300
Microsoft is one of the best stocks for beginners. The company’s plans to revive its Bing search business are working. OpenAI recently said ChatGPT will be able to browse the internet for latest results and would no longer be limited to 2021 data. The chatbot will use Bing search for real-time results. Microsoft is also enjoying growth of its Cloud business and dominance in the enterprise office space.
A total of 300 hedge funds tracked by Insider Monkey bought stakes in MSFT as of the end of the second quarter.
ClearBridge Value Equity Strategy made the following comment about Microsoft Corporation (NASDAQ:MSFT) in its Q2 2023 investor letter:
“We initiated a small position in Microsoft Corporation (NASDAQ:MSFT) during the quarter, which may seem surprising given our concerns about index concentration. However, we seized the opportunity on a compelling entry point below our business value estimate, due to an anticipated acceleration of demand for Microsoft’s Azure cloud business and incremental revenues from integration of Microsoft’s AI Copilot program into its office platform. We believe this could support double-digit growth, while simultaneously solidifying Microsoft’s competitive position as an AI winner. Even as a small position, we believe Microsoft provides a large portfolio construction benefit given low correlation to the rest of the portfolio.”
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This article is originally published at Insider Monkey.
