We recently published a list of 10 Best High-Risk Stocks to Buy According to Billionaires. In this article, we are going to take a look at where Applied Materials, Inc. (NASDAQ:AMAT) stands against other best high-risk stocks to buy according to billionaires.
Investors often retreat into safer assets during volatility when the global markets move towards a chaotic storm. But for billionaire investors, market chaos could mean something else entirely: an opportunity. The new tariffs the current U.S. President announced on April 2, 2025, sent ripples across Wall Street. Multiple headlines have started forecasting a recession, and some of the wealthiest minds in the financial world are looking at high-risk stocks, not with fear but with an intent to utilize the opportunity. These minds work on the philosophy that market storms would wash away the timid but also drench the bargains for those willing to wade in.
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The perspective is more relevant today as the stock market is seeing its highest drop in value since the COVID-19 pandemic. CNBC reported that only a handful of companies finished April 4 in the green, escaping the impact of the U.S. tariffs, but only slightly.
Experts call the new commercial environment a full-blown trade war ignited by the U.S. President’s sweeping 10% tariffs on all U.S. trading partners. The countries targeted by the new tariffs have started retaliating by imposing additional tariffs on U.S. goods, thus worsening the situation. Notably, China, the largest trade partner of the U.S., retaliated by imposing a 34% tax on American goods and a crackdown on U.S. firms.
Amid this panic, a small group of elite investors doubles down on risk. At first glance, it may seem like the strategy is built on unquestioning optimism, grounded in decades of historical precedent. Many billionaires believe that the best opportunities often surface during the ugliest moments in the market. Between 1980 and 2023, the average intra-year decline in the market was around 14%. Despite this staggering decline, the market could still post positive annual returns in 32 out of 44 years. Experts call the strategy positioning ahead of the rebound.
In this regard, high-risk stocks have often been seen outperforming once the dust settles. These stocks, exposed to uncertain market forces, are the type that collapse in weeks and double in days. Billionaires incorporate such high-risk stocks into their portfolios after estimating their time for recovery, innovation, and long-term asymmetry. It is not just about surviving the downturn but also about owning the comeback.
Growth stocks are garnering renewed attention in recent times in the category of high-risk stocks. Though they are bearing the effects of the current market carnage, historically, they have outperformed the value stocks in multi-decade comparisons. While these outperformances are not without any swings, they indicate that investors can move ahead with conviction and patience.
Of course, choosing the right high-risk stocks requires a deeper understanding of market psychology and the macroeconomic undercurrents. In this regard, the billionaire portfolios offer a valuable window. Their public disclosures provide an insight into the stocks where capital is concentrated despite the crumbling sentiments.
These are not random gambles. They are signals that income-seeking investors could use to pepper their portfolio with a few high-risk stocks and benefit from the experts’ advocacy.
Our Methodology
For this article, Insider Monkey’s billionaire database of Q4 2024 was reviewed to identify stocks with a beta value near 1.5, indicating they are expected to be about 50% more volatile than the broader market. Also, our list comprises stocks with positive earnings per share (EPS) over the past five years and a positive projected EPS growth over the next five years. The criterion was in place to consider only those stocks with historical profitability and future earnings potential. All the stocks have a consensus Strong Buy rating from Wall Street analysts, which suggests a positive market outlook.
Additionally, the stocks in the list are all large-cap firms, which reflects their market presence and liquidity. The stocks are ranked according to billionaire investors having stakes in them. We have sourced the required data from financial databases and analysts, with all information current as of April 4, 2025. Stocks’ presence in the number of hedge funds has also been considered to estimate the institutional interest.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A technician in a clean room assembling a semiconductor chip using a microscope.
Applied Materials, Inc. (NASDAQ:AMAT)
Number of Billionaire Investors: 18
Total Value of Billionaire Holdings: $2 Billion
Beta: 1.71
Applied Materials, Inc. (NASDAQ:AMAT) is a leading supplier of manufacturing equipment, software, and services used for producing semiconductors and advanced displays. The company’s technologies support critical processes like deposition, etching, and inspection for chipmakers worldwide. Serving clients in the consumer electronics, AI, and automotive sectors, the company earned a position as a key player in the global semiconductor supply chain through its comprehensive product portfolio and strategic investments.
Applied Materials, Inc. (NASDAQ:AMAT) attracted the attention of eighteen billionaire investors with holdings totaling $2 billion. The company delivered a revenue of $27.2 billion, up 2.5% year-over-year. The increase marks the fifth consecutive year of growth for the company. Parts and services businesses are performing better, with the sector earning double-digit growth. Applied Materials expects further growth in 2025, anticipating a revenue of $7.15 billion in the first quarter. Operational improvements and value-based pricing are expected to drive up sales.
Applied Materials, Inc. (NASDAQ:AMAT)’s high susceptibility to market fluctuations, as indicated by its beta of 1.71, turns it into a high-risk investment. The company posted a strong 24.62% EPS growth over five years. However, forecasts indicate a slower pace of 8.06% for the next five years. With 80 hedge funds invested in Q4 2024, the company continues to attract institutional confidence.
Overall, AMAT ranks 3rd on our list of best high-risk stocks to buy according to billionaires. While we acknowledge the potential for AMAT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than AMAT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.