In this article, we will take a look at the 5 best beginner stocks to buy now. To see more such companies, go directly to 15 Best Beginner Stocks To Buy Now.
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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