This article presents an overview of the 5 Most Buzzing Stocks To Buy Now. For a detailed overview of such stocks, read our article, 13 Most Buzzing Stocks To Buy Now.
5. Bank of America Corp (NYSE:BAC)
Number of Hedge Fund Investors: 88
Bank of America Corp (NYSE:BAC) ranks fifth in our list of the most buzzing stocks now. Earlier this month Bank of America Corp (NYSE:BAC) posted fourth quarter results. While net interest income met consensus, noninterest income missed estimates.
Smead Value Fund made the following comment about Bank of America Corporation (NYSE:BAC) in its Q3 2023 investor letter:
“Through the first nine months of the year, we had a gain of 2.10%. The S&P 500 had a gain of 13.07% and the Russell 1000 Value had a gain of 1.79%. The stock market realized markedly higher riskless US Treasury interest rates had their effect on the stock market as it began to reassert what Warren Buffett calls the “gravitational pull” on price-to-earnings ratios (P/E).
On the downside, Target (TGT), Bank of America Corporation (NYSE:BAC) and Pfizer (PFE) detracted the most in the first nine months of the year. Inverted yield curves are historically lousy for the banks, so the weak performance for BAC is no surprise.”
4. Advanced Micro Devices Inc. (NASDAQ:AMD)
Number of Hedge Fund Investors: 110
A broader rally in the semiconductors market after upbeat results from Taiwan Semiconductor buoyed Advanced Micro Devices Inc. (NASDAQ:AMD) recently is causing AMD stock to move. Advanced Micro Devices Inc. (NASDAQ:AMD) is also getting the spotlight amid AI-driven growth catalysts as Advanced Micro Devices Inc. (NASDAQ:AMD) is seen as a major competitor to NVIDIA Corp (NASDAQ:NVDA).
Advanced Micro Devices Inc. (NASDAQ:AMD) also moved after UBS said in a report that semiconductor demand is expected to surpass supply in 2024 which would create an “imbalance” that would ultimately favor top semi stocks.
As of the end of the third quarter of 2023, 110 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Advanced Micro Devices Inc. (NASDAQ:AMD). The biggest hedge fund stakeholder of Advanced Micro Devices Inc. (NASDAQ:AMD) during this period was Ken Fisher’s Fisher Asset Management which owns a $2.8 billion stake in Advanced Micro Devices Inc. (NASDAQ:AMD).
White Falcon Capital Management stated the following regarding Advanced Micro Devices, Inc. (NASDAQ:AMD) in its fourth quarter 2023 investor letter:
“It is important to note that the returns depicted above actually originated in the market turmoil of 2022 and were only realized in 2023. We assess that about 75% of the returns in 2023 were derived from just 35% of the portfolio. Notably, the technology companies we acquired in 2022 – Advanced Micro Devices, Inc. (NASDAQ:AMD), Amazon, Docebo, NU, Rover – performed exceptionally well. In hindsight, the decision to allocate to technology stocks appears straightforward; but it actually demanded courage and conviction to buy and add to these stocks during the fear and uncertainty of the 2022 bear market.
The top 5 positions in the portfolio were: Precious Metals royalty basket, Nu Holdings, AMD Amazon.com and Converge Technology Services. AMD has worked out great for us but we must admit that it has gotten expensive. AI was not part of our original investment thesis and AMD is a great reminder of how one can get ‘lucky’ investing in quality businesses run by competent management teams (ditto for Amazon).”
3. Apple Inc (NASDAQ:AAPL)
Number of Hedge Fund Investors: 134
Apple Inc (NASDAQ:AAPL) shares are buzzing before the launch of its much-awaited Apple Vision Pro mixed reality headset. Evercore’s Amit Daryanani said that the demand for the headset seems to be strong. The analyst referred to a spike in orders which caused Apple Inc (NASDAQ:AAPL) to extend delivery date for pre-orders from Feb. 2 to March 8.
“We think this suggests relatively strong initial demand, although we do concede that Apple has likely limited volumes in the first year,” Daryanani said.
As of the end of the third quarter of 2023, 134 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Apple Inc (NASDAQ:AAPL).
Polen Focus Growth Strategy stated the following regarding Apple Inc. (NASDAQ:AAPL) in its fourth quarter 2023 investor letter:
“Apple Inc. (NASDAQ:AAPL) and NVIDIA alone drove over 1,100 basis points of the Russell 1000 Growth Index’s 42% return, so not owning them was a meaningful headwind to our relative return in 2023. While on a total attribution basis, Apple was not a top three detractor to our full-year return, given its extremely large weighting in the Index, we feel it’s worth sharing our thoughts.
The company’s share price appreciated nearly 50% in a year when its revenue declined and earnings per share was relatively flat with the previous year.
For 2024, consensus expectations are for low-single-digit revenue growth and only slightly faster EPS growth. These pedestrian growth rates are not surprising for a company with nearly $400 billion in annual revenue. What is more surprising is that Apple shares trade at nearly 30x forward earnings, a large premium to the market and many faster-growing, competitively advantaged businesses.
While we continue to think Apple is a wonderful business, it is also a slow growing one with risks that we do not see as insignificant. Apple’s entire supply chain is based in China and much of its incremental revenue growth also comes from China, so if there is a U.S.-China issue that makes it more difficult for U.S.-based companies that have access to large amounts of local data to operate in China, Apple’s business would likely face more challenges than many others. In addition, much of Apple’s services growth and margin expansion has come from direct payments from Google to be the default search provider on iOS devices. This practice is currently the subject of a lawsuit between Google and the U.S. Justice Department. If this practice is deemed unlawful, it could take away a large and highly profitable revenue stream from Apple’s already slow growth engine. While we closely cover Apple, we continue to believe we have better investment opportunities. Apple’s current P/E is above our Portfolio’s weighted average, yet its long-term earnings growth rate is likely to be lower than even our slowest growing holding, according to our research.”
2. NVIDIA Corp (NASDAQ:NVDA)
Number of Hedge Fund Investors: 180
NVIDIA Corp (NASDAQ:NVDA) remains a buzzing stock and is expected to keep making waves for months to come amid the AI boom that has no end in sight. Investors are eager to watch NVIDIA Corp’s (NASDAQ:NVDA) earnings report slated to be released next month. On the other hand, more and more companies are ordering AI-focused chips from NVIDIA Corp (NASDAQ:NVDA). Recently Meta Platforms’ CEO Mark Zuckerberg said his company is spending billions in buying chips from NVIDIA Corp (NASDAQ:NVDA).
Polen Focus Growth Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its fourth quarter 2023 investor letter:
“Apple and NVIDIA Corporation (NASDAQ:NVDA) alone drove over 1,100 basis points of the Russell 1000 Growth Index’s 42% return, so not owning them was a meaningful headwind to our relative return in 2023. NVIDIA shares rocketed higher by well over 200% in 2023 although they slightly underperformed our Portfolio and the Russell 1000 Growth in the fourth quarter. Generative AI has been a huge boon for NVIDIA as the use of LLMs like ChatGPT and others requires tremendous processing power that, today, is mostly provided by NVIDIA’s GPUs. All large cloud service providers, AI factories, and many large consumer internet companies are laying the foundation for generative AI by deploying NVIDIA GPUs and other parallel processing chips to be able to do large scale generative AI either for internal use (i.e., Meta) or as a service for others (i.e., AI factories) or both (cloud service providers such as Amazon, Microsoft, and Google).
Given many of NVIDIA’s customers or its end customers are still very much in the experimentation phase with generative AI, it is unclear how sustainable the current demand for GPUs truly is. At the same time, it is known that NVIDIA has historically been highly cyclical. By the end of 2024, we believe NVIDIA will already account for roughly half the market for datacenter chips, servers, and networking equipment, which is unprecedented. Even though the valuation at 25x forward earnings doesn’t look very demanding at first glance, it assumes NVIDIA will own virtually the entire datacenter chip market in just the next few years and will sustain year-on-year growth despite being a cyclical business that is currently experiencing much higher new peaks.
We believe NVIDIA is a highly advantaged business, but we also believe the long-term growth outcomes are currently too variable, and the expectations built into the company’s $1.2 trillion valuation as of this writing assume the most optimistic of those scenarios.”
1. Amazon.com Inc (NASDAQ:AMZN)
Number of Hedge Fund Investors: 286
Amazon.com Inc (NASDAQ:AMZN) is one of the top buzzing stocks right now. BofA strategist Michael Hartnett recently said it’s still a “buy-the-dip” market and investors will revert to growth stocks and the Magnificent Seven group of stocks, which includes Amazon, will rebound again in 2024.
Polen Focus Growth Strategy stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its fourth quarter 2023 investor letter:
“For the full year, the top relative and absolute contributors were Amazon.com, Inc. (NASDAQ:AMZN), Salesforce, and ServiceNow. Amazon shares appreciated 88% in 2023, driven primarily by rapidly expanding operating profit margins and free cash flow growth. After the pandemic, Amazon experienced a period of inefficiency and overinvestment in its distribution and logistics infrastructure. Amazon is now leveraging these investments as growth returned to its e-commerce business in 2023 after a highly unusual 2022. At the same time, Amazon’s rapidly growing and high-margin advertising business is contributing strongly to the entire company’s operating profit growth. The AWS (Amazon Web Services) cloud infrastructure and services business continued to slow in 2023 as customers anticipating a more difficult economic environment looked to save money on their cloud spend, but these cloud spending optimizations began to stabilize in the second half of 2023. We now expect customer interest in generative AI will begin to contribute to growth.”
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