10 Stocks That Will Skyrocket

In this article, we will be taking a look at 10 stocks that will skyrocket.

With the U.S. stock market plunging into bear territory, investors have typically been wary when it comes to picking up new stocks. According to Forbes, the S&P 500 stock index fell by over 20% between January and July, leading to intense economic fear. Coming out of the 2008 economic crisis, numerous investors began considering big tech and growth champions to help their portfolios recover from the devastation of the crisis, which lead to a resurgence in growth investing.

Stocks like Micron Technology, Inc. (NASDAQ:MU), Etsy, Inc. (NASDAQ:ETSY), and Shopify Inc. (NYSE:SHOP), which offer investors growth prospects in the tech and e-commerce sectors, are beginning to gain popularity among growth investors this year. The main attraction comes from cheaper valuations for otherwise profitable stocks, according to Jack Janasiewicz, a lead portfolio strategist at Natixis Investment Managers Solutions. According to Reuters, Mr. Janasiewicz stated that the current valuations in the tech sector are some of the most attractive they’ve been in a long time. The S&P 500’s tech sector had a forward price-to-earnings ratio of 19.1x as of this July.

According to a more recent Reuters report, interest in U.S. growth stocks was cemented this August. $7.1 billion worth of equities were bought at the beginning of the month, with growth stocks recording their largest weekly inflow of cash since December at $2.5 billion, showcasing the rising popularity of growth investing. For the tech sector, and even the consumer discretionary sector, August has also shown massive growth of 20% and 25% respectively, according to the Wall Street Journal.

With inflation fears receding somewhat after inflation rates declined month-over-month in July, U.S. stocks are now on the rise once more. The tech-focused Nasdaq composite rose by 2.9%, while the S&P 500 and Dow Jones Industrial Average rose by 2.1% and 1.6% respectively. While tech stocks were among the underperformers at the start of the year, recent inflation data has catalyzed their comeback. The worst-performing stocks in the Russell 1000 during the first six months of the year rose by over 32% in the weeks leading up to August. At the same time, the stocks that had been performing well at the start of the year barely rose by 3%. The market is beginning to look better for tech and growth options in the coming months, as a result.

With that background in mind, let’s now take a look at 10 stocks that will skyrocket.

Photo by lucas Favre on Unsplash

Our Methodology

Using factors like positive earnings per share, revenue growth, and profitable products, among others, we have selected cheap stocks that are expected to skyrocket in the coming years. Insider Monkey tracks over 9oo hedge funds, and we use this hedge fund data to find stocks that are popular among a select group of top performing funds. These stocks have mostly positive analyst ratings and price targets showing upside potential as well. They are ranked based on their share prices as of August 10, from the lowest to the highest.

Stocks That Will Skyrocket

Number of Hedge Fund Holders: 36

Share price as of August 10: $9.65

Palantir Technologies Inc. (NYSE:PLTR) is an information technology company that builds and deploys software platforms for the intelligence community in the U.S. The company offers software platforms like palantir gotham, palantir foundry, and apollo, among other products and services.

On August 9, Morgan Stanley’s Keith Weiss reiterated an ‘Equal Weight’ rating on Palantir Technologies Inc. (NYSE:PLTR) shares. Weiss also placed an $11 price target on the stock.

The company’s $473 million in revenue represented an exponential rise in the second quarter of 25.92% year-over-year. It also beat estimates by $1.3 million. Palantir Technologies Inc.’s (NYSE:PLTR) projected EPS growth rate for the next three-to-five years is 26.8%. The company also expects a 30% rise in annual sales through 2025.

Palantir Technologies Inc. (NYSE:PLTR) was held by 36 hedge funds in the first quarter, with a total stake value of $611 million. Of those funds, Catherine Wood’s ARK Investment Management was the largest stakeholder in the company, holding 541,577 shares worth $4.7 million.

Palantir Technologies Inc. (NYSE:PLTR) is an undervalued tech stock many hedge funds are piling into today. Micron Technology, Inc. (NASDAQ:MU), Etsy, Inc. (NASDAQ:ETSY), and Shopify Inc. (NYSE:SHOP) are some other tech names popular among institutional investors in the first quarter.

9. Exelixis, Inc. (NASDAQ:EXEL)

Number of Hedge Fund Holders: 30

Share price as of August 10: $19.29

Exelixis, Inc. (NASDAQ:EXEL) is a biotechnology company focused on oncology. The company works to discover, develop, and commercialize new medicines to treat cancers in the U.S. It is based is Alameda, California.

Cowen analyst Yaron Werber raised the price target on Exelixis, Inc. (NASDAQ:EXEL) shares on August 10 from $24 to $26. The analyst also reiterated an ‘Outperform’ rating on the stock.

Exelixis, Inc. (NASDAQ:EXEL) had EPS of $0.20 in the second quarter, beating estimates by $0.03. The company’s revenue was $419.4 million, up 8.9% year-over-year and also beating estimates, by $26.4 million. Exelixis, Inc.’s (NASDAQ:EXEL) is projected to deliver EPS growth of 36.7% over the next three-to-five years. In a press release from this January, the company mentioned that the commercial success of its CABOMETYX tablets will allow it to advance its portfolio of differentiated therapeutic candidates. It also offered full year 2022 net product revenues guidance of $1.3 billion to $1.4 billion.

There were 30 hedge funds long Exelixis, Inc. (NASDAQ:EXEL) in the first quarter of 2022, with a total stake value of $1.1 billion. That’s a noteworthy increase compared to 26 hedge funds with a total stake value of $825 million a quarter earlier.

8. CarGurus, Inc. (NASDAQ:CARG)

Number of Hedge Fund Holders: 29

Share price as of August 10: $20.24

CarGurus, Inc. (NASDAQ:CARG), an online automotive marketplace provider, connects buyers and sellers of new and used cars. The company’s brands include CarGurus, Autolist, and PistonHeads. It operates in Canada, the UK, and the U.S.

An ‘Outperform’ rating was reiterated on CarGurus, Inc. (NASDAQ:CARG) shares on August 9 by analyst Brad Erickson at RBC Capital. Erickson also placed a $35 price target on the stock.

CarGurus, Inc. (NASDAQ:CARG) expects EPS growth of 20.5% over the next three-to-five years. The company benefits from an asset-light business model, has no long-term debt, and $375 million in cash, cash equivalents, and short-term investments as of the close of the first quarter. CarGurus, Inc.’s (NASDAQ:CARG) had non-GAAP operating income of $62.2 million in the first quarter, a 28% rise year-over-year. It had second quarter EPS of $0.30, beating estimates by $0.01, and revenue of $511.2 million, beating estimates by $3.9 million.

Out of 912 hedge funds that filed 13Fs in the first quarter, 29 of them held stakes in CarGurus, Inc. (NASDAQ:CARG). Their collective stakes were valued at $338.9 million, with PAR Capital Management being the largest stakeholder in the company, holding 2.89 million shares worth $123 million.

7. Pinterest, Inc. (NYSE:PINS)

Number of Hedge Fund Holders: 56

Share price as of August 10: $22.93

Pinterest, Inc. (NYSE:PINS) is a social media company based in San Francisco, California that is popular among older women and do-it-yourselfers. Shares of PINS have lost 38% in 2022.

Evercore ISI analyst Mark Mahaney raised his price target on Pinterest, Inc. (NYSE:PINS) shares on August 2 from $24 to $28. Mahaney also reiterated an ‘In Line’ rating on them.

In the first quarter, 56 funds were long Pinterest, Inc. (NYSE:PINS), compared to 57 hedge funds in the previous quarter. Their total stake values were approximately $1.3 billion in both quarters.

Harding Loevner, an investment management firm, mentioned Pinterest, Inc. (NYSE:PINS) in its first quarter 2022 investor letter. Here’s what the firm said:

“Other detractors within Communication Services included Pinterest (NYSE:PINS), which is finding it hard to sustain the extremely rapid growth they enjoyed over the past two years of pandemic lockdown and social distancing.”

6. Revolve Group, Inc. (NYSE:RVLV)

Number of Hedge Fund Holders: 23

Share price as of August 10: $29.21

Revolve Group, Inc. (NYSE:RVLV), a global consumer discretionary company, works to connect consumers, global fashion influencers, and brands. The company is based in Cerritos, California.

Anna Andreeva, a Needham analyst, kept her ‘Buy’ rating on Revolve Group, Inc. (NYSE:RVLV) on August 8, alongside placing a $40 price target on the stock.

Analyst Andreeva noted an acceleration in order value and strong gross margins in Revolve Group, Inc.’s (NYSE:RVLV) second quarter results. The company’s P/E ratio was 21.2x in 2021, and its EPS is expected to grow by 5.5% over the next three-to-five years. Revolve Group, Inc. (NYSE:RVLV) showed sales growth of 58% in the first quarter. The company’s high-fashion website, FWRD, grew its sales in 2021 by 71%.

Fisher Asset Management was the largest stakeholder in Revolve Group, Inc. (NYSE:RVLV) in the first quarter, out of a total of 23 hedge funds long the stock. Fisher Asset Management held 1.7 million shares worth $91.4 million.

Revolve Group, Inc. (NYSE:RVLV), like Micron Technology, Inc. (NASDAQ:MU), Etsy, Inc. (NASDAQ:ETSY), and Shopify Inc. (NYSE:SHOP), is an attractive growth option that may skyrocket in the near future.

5. Shopify Inc. (NYSE:SHOP)

Number of Hedge Fund Holders: 72

Share price as of August 10: $40.19

Shopify Inc. (NYSE:SHOP) is an IT company operating an e-commerce platform accessible to users in Canada, the U.S, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. The company sells custom themes and apps, alongside the registration of domain names. There were 72 hedge funds long Shopify Inc. (NYSE:SHOP) in the first quarter, owning a collective $5.8 billion in shares.

On August 11, Atlantic Equities analyst Kunaal Malde upgraded shares of Shopify Inc. (NYSE:SHOP) from ‘Neutral’ to ‘Overweight’. Malde also placed a $46 price target on the stock.

Shopify Inc.’s (NYSE:SHOP) revenue was $1.3 billion in the second quarter, up 15.7% year-over-year. The company’s EPS is also set to grow by 35.7% over the next three-to-five years. The three-year CAGR for the company is 53% as of this August.

Rowan Street Capital LLC, an investment management firm, mentioned Shopify Inc. (NYSE:SHOP) in its second quarter 2022 investor letter. Here’s what the fund said:

“Tobias Lutke, Shopify (NYSE:SHOP) Founder and CEO

When Tobias Lütke opened an online snowboarding store in 2004, he realized how painfully cumbersome e-commerce software was. So he decided to create Shopify – a platform that made it easy for anyone to open up an online store.

Tobi has built Shopify into one of the most popular e-commerce platforms in the world, with $175 billion in GMV (Gross Merchandise Value) and $4.6 billion in revenues in 2021. SHOP went public in 2015, when revenues were just lightly above $200 million, and the stock is up 1,233% since its IPO. Shopify stock peaked in November 2021 (traded at astronomical 47x sales), which coincided with peak enthusiasm for the tech-driven, “stay-home” stocks. Since then, the stock is down almost 80% and is currently trading at just 6x 2023E sales. We believe that Mr. Market is offering us an exceptional value, at current price levels, for an exceptional company led by a very talented, visionary founder/CEO.”

4. Roblox Corporation (NYSE:RBLX)

Number of Hedge Fund Holders: 40

Share price as of August 10: $46.05

Roblox Corporation (NYSE:RBLX) is a communication services company operating an online entertainment platform. The company’s main product is Roblox Studio, a free toolset allowing users to build, publish, and operate 3D experiences and other content.

In the second quarter, Roblox Corporation (NYSE:RBLX) grew its revenue to $639.9 million, beating estimates by $13.7 million. The company had year-over-year revenue growth of 57.3%. Roblox Corporation (NYSE:RBLX) has been steadily increasing its daily active users (DAUs) because of the uniqueness of its platform. Between 2018 and 2021, the company’s DAUs grew from 10.3 million to 42.1 million. The company’s growth during the pandemic was significant, standing at 82% year-over-year in 2020, and 140% year-over-year in 2021. The company’s revenue is expected to rise another 186% to $2.7 billion this year.

Out of 912 hedge funds that filed 13Fs in the first quarter, 40 funds were long Roblox Corporation (NYSE:RBLX), owning $1.8 billion in shares. In comparison, 61 hedge funds held stakes in the company in the previous quarter, with a total stake value of $4.03 billion.

3. Micron Technology, Inc. (NASDAQ:MU)

Number of Hedge Fund Holders: 78

Share price as of August 10: $61.37

Chipmaker Micron Technology, Inc. (NASDAQ:MU), another IT company on our list, is based in Boise, Idaho. It operates through its Compute and Networking Business Unit, Mobile Business Unit, Storage Business Unit, and Embedded Business Unit to provide memory and storage technologies.

Analyst Vijay Rakesh at Mizuho reiterated a ‘Buy’ rating on Micron Technology, Inc. (NASDAQ:MU) shares on August 10. The analyst also holds a $75 price target on the stock. Our hedge fund data for the first quarter shows 78 hedge funds long Micron Technology, Inc. (NASDAQ:MU), with their total stakes valued at $3.4 billion.

Micron Technology, Inc. (NASDAQ:MU) has enjoyed year-over-year revenue growth of 27.1%, and expectations are that the company will deliver EPS growth of 7.3% over the next three-to-five years. This May, the company noted that 42% of its 2025 revenue would come from its data center and graphics division, limiting losses from its consumer business division. Micron Technology, Inc. (NASDAQ:MU) also told investors that it sees robust growth for its DRAM and NAND memory chips in the next few years.

2. ON Semiconductor Corporation (NASDAQ:ON)

Number of Hedge Fund Holders: 48

Share price as of August 10: $66.33

ON Semiconductor Corporation (NASDAQ:ON) is an information technology company providing intelligent sensing and power solutions globally. The company is based in Phoenix, Arizona. There were 48 hedge funds holding stakes in ON Semiconductor Corporation (NASDAQ:ON) in the first quarter, compared to 47 hedge funds in the previous quarter. Their total stake values were $1.3 billion and $1.6 billion respectively.

On August 2, Mark Lipacis, an analyst at Jefferies, kept a ‘Buy’ rating on ON Semiconductor Corporation (NASDAQ:ON). Lipacis also raised his price target on the stock from $75 to $77.

ON Semiconductor Corporation (NASDAQ:ON) had EPS of $1.30 in Q2, beating estimates by $0.10. The company’s revenue was $2.1 billion, up 24.9% year-over-year and topping estimates by $70.7 million. The company is expected to generate 21.5% EPS growth over the next three-to-five years. As of this August, the company’s year-over-year cash flow growth is 88.9%, while the industry average stands at 41.2%.

Artisan Partners, a high value-added investment management firm, mentioned ON Semiconductor Corporation (NASDAQ:ON) in its fourth quarter 2021 investor letter. Here’s what it said:

“ON Semiconductor is a global supplier of advanced semiconductors for sophisticated electronics applications within the automotive, industrial, communications, consumer and computing end-product markets. The company operates across three segments: power solutions, advanced solutions and intelligent sensing. A new management team, which took over toward the end of 2020, is working to dramatically improve the company’s performance by rightsizing its manufacturing footprint, exiting more commoditized products and investing in several compelling growth opportunities. When the dust has settled, we expect the portfolio to be more focused on the auto and industrial segments. As auto OEMs incorporate more automated safety technology and car fleets transition from internal combustion engines to battery electric vehicles, ON’s image sensors for cars and silicon carbide inverters— which extend EV battery efficiency—will be in high demand. This mix shift should drive ON’s margins higher over time. With shares trading at an attractive valuation, we initiated a GardenSM position.”

1. Block, Inc. (NYSE:SQ)

Number of Hedge Fund Holders: 84

Share price as of August 10: $88.54

Block, Inc. (NYSE:SQ), a data processing company, creates tools to help sellers accept card payments. The company also provides hardware products like its Magstripe reader, enabling swiped transactions of magnetic stripe cards. Out of 912 hedge funds, 84 were long Block, Inc. (NYSE:SQ) in the first quarter of 2022, with their combined stakes valued at $6.2 billion.

A ‘Buy’ rating was reiterated on Block, Inc. (NYSE:SQ) shares on August 8 by analyst Dan Dolev at Mizuho. The analyst also holds a $125 price target on the stock. The company’s three-year sales growth CAGR is 65% as of 2022. Block, Inc.’s (NYSE:SQ) EPS for the second quarter was $0.20, beating estimates by $0.02, while its revenue was $4.4 billion, beating estimates by $69.5 million. The company’s EPS has positive growth prospects over the next three-to-five years, as it’s estimated to rise by 12.7% over that period.

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Disclosure: None. 10 Stocks That Will Skyrocket is originally published on Insider Monkey.