In this article, we discuss the 5 best beginner stocks to invest in right now. If you want to read our detailed commentary on which stocks are best for beginners and why, go directly to 10 Best Beginner Stocks To Invest In Right Now.
5. Block, Inc. (NYSE:SQ)
Number of Hedge Fund Holders: 84
Block, Inc. (NYSE:SQ) is positioned very cozily within a fast-growing industry. The California-based company founded by Twitter boss Jack Dorsey offers digital payment solutions through Square, a platform which allows small businesses to accept credit cards and use tablets as point of sale (POS) systems; and Cash App, a money transfer platform used by millions across the United States. Block, Inc. (NYSE:SQ) has also recently acquired leading fintech firm AfterPay, which offers Buy Now Pay Later services.
Truist analyst Andrew Jeffrey in May reiterated a ‘Buy’ rating on Block, Inc. (NYSE:SQ) shares, and revised the price target to $145 from $165. The analyst notes that Block has potential to become one of the world’s most important fintech companies, giving competition to big-names such as Visa Inc. (NYSE:V). He thinks long-term investors have a compelling buying opportunity.
Disruptive tech investor Cathie Wood was the largest shareholder of Block, Inc. (NYSE:SQ) in the first quarter, with her ARK Investment Management, holding a $1.12 billion stake in the fintech company. In total, 84 hedge funds were long on the company shares at the end of Q1 2022, with combined positions worth $6.18 billion.
Farrer Wealth Advisors, an investment firm, mentioned many stocks in its Q1 2022 investor letter and Block, Inc. (NYSE:SQ) was one of them. It said:
“Block (formerly Square): We ‘adopted’ Block’s stock after the company bought Afterpay, which we were investors in. We had been trimming the Afterpay position throughout 2021 and trimmed again after the acquisition, so the position was quite small. We held onto that small portion, as we did think the acquisition made sense and were excited to see the two companies integrate and for Block to create a closed loop network between merchants and consumers. However, the market punished most highly valued tech stocks over the last months, and we saw the position move against us by over 50%. We are firm believers that when a stock goes against you by 50%+, you need to do something about it. Either trim/sell and reinvest or buy more. In the case of Block, the original reason for holding was to see how the acquisition and integration with Afterpay panned out. The market did not give us the time to see this play out, thus we were not comfortable adding more to the position. Further for the stock to recover to our purchase price, we felt the company’s valuation would need to command a future exit multiple that the market would be unlikely to pay in this environment. Given this, we exited the remainder of the position.”
4. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 102
NVIDIA Corporation (NASDAQ:NVDA) is one of the best beginner stocks to invest in, given that it is enjoying multiple secular growth drivers in the computing, gaming and data center segments which utilize the firm’s chipsets, processors and graphic cards.
BofA analyst Vivek Arya recently chose NVIDIA Corporation (NASDAQ:NVDA) as his top large-cap semiconductor pick, noting “compelling” valuations in the semi industry. On May 26, Mizuho analyst Vijay Rakesh gave NVDA stock a ‘Buy’ recommendation, noting that the firm retains its leadership in data center and artificial intelligence, positioning it well into 2023. The analyst also sees the “near-term reset” allowing investors a good entry point.
For the first quarter, NVIDIA Corporation (NASDAQ:NVDA) reported $8.29 billion in revenue for the quarter, beating estimates by $194.4 million and growing 46.41% in contrast to the year-ago quarter. EPS for Q1 also beat Street estimates by $0.07.
102 hedge funds were stakeholders in NVIDIA Corporation (NASDAQ:NVDA) at the end of March, with aggregate positions worth $6.35 billion. After a 44% increase in stake, Fisher Asset Management was the largest Q1 shareholder of NVIDIA, with 7.32 million shares worth $1.99 billion.
Here is what RiverPark Funds had to say about NVIDIA Corporation (NASDAQ:NVDA) in its Q1 2022 investor letter:
“Nvidia is the leading designer of graphics processing chips (commonly known as GPU’s- graphics processing units), required for powerful computer processing. Over the past 20 years, the company has evolved through innovation and adaptation from a predominantly gaming- focused chip vendor to one of the largest semiconductor/software vendors in the world, dominating the core secular growth markets of gaming, data centers and professional visualization. Over the past decade, the company has grown revenue at a compound annual rate of over 20% while expanding operating margins and, through its asset light business model, producing ever increasing amounts of free cash flow. For 2021 the company generated 61% revenue growth to $27 billion, expanded its EBITDA margins to over 44% and generated over $8 billion of free cash flow. Over the past five years, the company has generated a cumulative $23 billion of FCF after cumulative capital expenditures of less than $4 billion.
We expect future growth to remain robust as NVDA chips and software are critical to many of the core technologies being adopted globally, including cloud computing, virtual reality and advanced artificial intelligence. As with NFLX, we took advantage of the over 40% recent drop in the company’s shares over the last several months to initiate a small position.”
3. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 131
Apple Inc. (NASDAQ:AAPL) is a market leader which, it seems, will forever be valuable to investors, just like iPhones are to consumers around the world. With a consistent history of providing excellent shareholder gains, innovative, industry-leading technology, and huge sales in virtually every region around the world, no investing newbie can go wrong buying Apple Inc. (NASDAQ:AAPL). And with the stock down more than 21% in the year to date as part of the broader market sell-off in tech, buying Apple shares right now makes even more sense.
At its annual Worldwide Developers Conference, the company recently unveiled a range of updates to its product lineup, including new MacBook Pro and MacBook Air laptops, upgraded iOS software and a new M2 chip. Morgan Stanley analyst Katy Huberty on June 7 noted that the event showed Apple Inc.’s (NASDAQ:AAPL) “innovation engine at full throttle.” She gave the firm an ‘Overweight’ rating with a $195 price target.
A total of 131 hedge funds from the Q1 database of Insider Monkey owned stakes in Apple Inc. (NASDAQ:AAPL), with an aggregate value of $182 billion. Warren Buffett was its largest shareholder, with his Berkshire Hathaway holding a $155 billion stake.
ClearBridge Investments mentioned Apple Inc. (NASDAQ:AAPL) in its Q4 2021 investor letter. Here’s what the investment firm said:
“Despite these mixed emerging growth results, the ClearBridge Global Growth Strategy outperformed the benchmark due to resilience among our secular and structural growth holdings. The bulk of these contributions came from U.S. mega-cap growth stocks Apple and Microsoft which continued to uniquely act both offensively and defensively as they have through most of the pandemic.”
2. Visa Inc. (NYSE:V)
Number of Hedge Fund Holders: 159
Visa Inc. (NYSE:V) is the world’s leading payment services company, facilitating transactions between businesses and individuals in more than 200 countries and regions around the globe in approximately 160 currencies. Goldman Sachs analyst Will Nance sees the firm as a global leader, with “attractive leverage to the long-term secular growth driver from payment electronification.” He gave the firm a ‘Buy’ rating on May 17 and placed it on his ‘Americas Conviction List’, along with a price target of $282 which implies a 43% upside.
For Q1 2022, Visa Inc. (NYSE:V) posted an EPS of $1.79, which exceeded analysts’ forecasts by $0.14. Quarterly revenue recorded year-on-year growth of 25.48%, coming in at $7.19 billion which also beat Street estimates by $366.9 million.
Investors were eager on Visa Inc. (NYSE:V) in the first quarter. According to the Q1 database of Insider Monkey, 159 hedge funds reported bullish bets on the company shares, as compared to 142 hedge funds in the previous quarter. Chris Hohn’s TCI Fund Management held 19.92 million shares of Visa Inc. (NYSE:V) worth $4.41 billion, making it the firm’s largest Q1 shareholder. Billionaires Ken Fisher and Warren Buffett also held multi-billion dollar stakes in the firm.
Investment management firm Baron Funds talked about the prospects of Visa Inc. (NYSE:V) in its Q1 2022 investor letter. Here is what it said:
“Shares of global payment network Visa, Inc. (NYSE:V) were up 2.5% on strong quarterly results with 24% revenue growth and 27% EPS growth. Payment volume grew 20% with notable strength in cross-border volumes as travel activity rebounded from depressed levels. Management raised full-year guidance to reflect high-teens revenue growth. Shares also likely benefited from a “flight to safety” during a volatile quarter for equities. We continue to own the stock due to Visa’s long runway for growth underpinned by the continued migration from cash transactions to card/digital and strong competitive advantages, operating in a duopoly with Mastercard.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 271
Amazon.com, Inc. (NASDAQ:AMZN) stock was trading at more than $2000 per share up until recently. This was until the company’s 20:1 stock split came into effect on June 6, pricing the shares at $120. This move allows retail investors an affordable opportunity to buy Amazon stock, and beginners can take advantage by putting their money into one of the most formidable companies on the stock market.
Based in Seattle, Washington, Amazon.com, Inc. (NASDAQ:AMZN) is a leader in e-commerce, and also offers cloud services through AWS (Amazon Web Services). It operates a video streaming service through its Amazon Prime platform, which enjoys more than 175 million paid subscribers from around the globe.
On June 6, MKM Partners analyst Rohit Kulkarni kept a ‘Buy’ rating on Amazon.com, Inc. (NASDAQ:AMZN) shares, and gave the stock a new, split-adjusted price target of $180, roughly in-line with his previous target of $3,625. He sees Amazon as the most diversified internet firm in the world, and appreciates it as the best “safe haven” internet stock within the macro set up.
Amazon.com, Inc. (NASDAQ:AMZN) stock was held by 271 hedge funds according to the Q1 database of Insider Monkey, making it the most widely-held stock in our database. With a massive $7.7 billion stake, Fisher Asset Management was the most prominent shareholder of Amazon.com, Inc. (NASDAQ:AMZN) in the first quarter.
In its Q1 2022 investor letter, investment firm Polen Capital discussed the performance and prospects of Amazon.com, Inc. (NASDAQ:AMZN), stating:
“Amazon has done a terrific job managing through the pandemic, in our view. Many companies struggled to pivot their business model during COVID-19, which represented an existential threat. Amazon had the opposite problem – a surge in demand. The company leaned into this by entering an extremely heavy investment cycle, doubling its fulfillment network and headcount over the past two years. To put this into context, Amazon added 273,000 employees in the last half of 2021 on top of over 400,000 employees the prior year. The company has also made significant Capital Expenditures, adding IT infrastructure for AWS and transportation capacity during this period. This all took place in the face of inflation related to wage increases and higher pricing from third-party carriers supporting the company’s fulfillment network. These heavy investments paid off—AWS grew 40% year over year, reached a $71B annual run rate, and total company revenue posted a two-year annual compounded growth rate of 25%. We believe this heavy investment cycle, like Amazon’s previous ones, will continue to support ongoing growth and will further separate Amazon from its competition while also providing the ability to increase margins through economies of scale. With respect to the margins specifically, AWS and Advertising – two fast-growing businesses – continue to contribute greater operating earnings to the overall business. We believe management has done an excellent job managing through this period and that the company is even stronger today than when COVID-19 first began to spread around the world.”
You can also take a look at 10 Best Biotech Stocks To Invest In and Bill Gates’ Stock Portfolio: Top 15 Picks.
