5 Best High Margin Growth Stocks to Buy Now

In this article, we will discuss the 5 best high-margin growth stocks to buy now. If you want to explore similar growth stocks that have the ability to sustain and grow their profit margins, you can also read the 10 Best High Margin Growth Stocks to Buy Now.

5. NVIDIA Corporation (NASDAQ:NVDA)

Operating Margin: 38.27%

Number of Hedge Fund Holders: 84

NVIDIA Corporation (NASDAQ:NVDA) is a leading manufacturer of graphics processing units and integrated circuits that power high-performance computers and data centers. On August 8, NVIDIA Corporation (NASDAQ:NVDA) announced preliminary earnings results for its fiscal second quarter of 2023. The company expects its data center revenue to grow by 61% year-over-year.

NVIDIA Corporation (NASDAQ:NVDA) has the ability to integrate rising input costs into its products and therefore maintain its profitability. As of August 24, the stock has a trailing twelve-month operating margin of 38.27%.

On August 9, Susquehanna analyst Christopher Rolland revised his price target on NVIDIA Corporation (NASDAQ:NVDA) to $210 from $220 and reiterated a ‘Positive’ rating on the shares. The analyst noted that the company will continue buybacks while maintaining strong free cash flow. As of August 24, NVIDIA Corporation (NASDAQ:NVDA) has free cash flow of $7.92 billion.

At the close of Q2, 84 hedge funds were long NVIDIA Corporation (NASDAQ:NVDA) with stakes worth $3.31 billion. That was down significantly from 102 positions in the previous quarter with stakes worth $6.35 billion. As of June 30, Fisher Asset Management owns over 7.59 million shares of NVIDIA Corporation (NASDAQ:NVDA) and is the leading shareholder in the company.

Here is what ClearBridge Investments had to say about NVIDIA Corporation (NASDAQ:NVDA) in its “Large Cap Growth ESG Strategy” second-quarter 2022 investor letter:

“Chipmaker Nvidia (NASDAQ:NVDA) has also been pressured by multiple compression of higher growth companies and weakness in its gaming business. While Nvidia has grown into a top 10 position with its strong performance through late 2021, we have been consistently trimming the position to derisk against short-term volatility in its gaming business. The company is clearly exposed to the semiconductor cycle but also participates in the secular growth of cloud and AI adoption through its data center business. With these secular drivers intact and new products ramping up in the second half of the year, we are maintaining an overweight to the company.”