In this article, we will take a detailed look at Top 10 Stocks Market Is Watching Today.
Chris Grisanti, MAI Capital Management chief market strategist, said in a latest program on CNBC that the market is going through a shift towards value stocks from growth stocks.
“A lot of investors miss is that you have to choose a great company, but you also have to choose a great entry price. And the valuation, especially over the last several years, has really gotten out of whack as growth has outperformed value by the most ever that we’ve ever seen. So now we’re just kind of getting back.”
The analyst warned that the latest selloff is not the “healthy correction” we used to see in the past.
“The economically sensitive stocks leading the way down. You’ve got banks that are tanking, you got airlines that are tanking, the worst groups are the financials, the industrial, and the consumer discretionary like retailers. So this is the market saying economic slowdown. Now is it right? You know the old saw about the market predicting eight of the last two recessions—maybe it’s wrong. The problem is one, it’s different this time so people should pay attention, and two, what generally happens is things can fall even on irrational fears, and then they become self-fulfilling.”
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For this article we picked 10 stocks Wall Street is currently focusing on. With each stock we have mentioned the number of hedge fund investors. 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).
Stock market data. Photo by Jakub Zerdzicki on Pexels
10. SoundHound AI Inc (NASDAQ:SOUN)
Number of Hedge Funds Investors: 11
Senior markets reporter George Tsilis said in a latest program on Schwab Network that SoundHound AI Inc (NASDAQ:SOUN) AI shares have fallen considerably compared with their past highs. The analyst mentioned how the company’s business is growing.
“Overall sales are improving, and even the net losses on an annualized basis are improving as well. They reported a loss of 5 cents, while expectations were for a loss of 10 cents. They also reported more than a 100% increase in sales, around 34.5 million versus 33.7 million, compared to the same quarter last year. They did reiterate their relationships with Nvidia, and they are now in 10,000 restaurant locations. They also have strategic partners, such as AI voice recognition technologies for call centers, Mastercard, Snapchat, and a few others, including Netflix. These are customers of SoundHound AI Inc (NASDAQ:SOUN).
I think this is an interesting name. Not just because the price of the stock is very low, but if you consider right now, the stock has retraced about 50% of the gains from late last year at around $3 and 5 billion. If you look at the annualized sales estimates going forward, it’s still trading around 20 times sales, but it was trading at over 100 times sales not too long ago. They continue to expect improving topline sales growth, as well as improving EBITDA margins. If you look at the estimates for fiscal year 26, they were expected to lose around 25 cents for the full year, but that’s now been cut down to around 14 cents.”
9. Super Micro Computer Inc (NASDAQ:SMCI)
Number of Hedge Funds Investors: 33
Matt Tuttle from Tuttle Capital in a latest program on Schwab Network discussed Super Micro Computer Inc (NASDAQ:SMCI).
“Super Micro is, in my opinion, one of the top AI infrastructure names, but you know, everything is tenuous. I mean, number one, we’re now in an environment where, you know, stocks had run up on all that capex, and now investors are asking kind of the inconvenient question: When do we monetize and do we need all this spending? So, that’s crushing all of these stocks. I think long-term, Super Micro is a name I want to own. Right now, you’d just be catching a falling knife.”
Columbia Acorn Fund stated the following regarding Super Micro Computer, Inc. (NASDAQ:SMCI) in its Q3 2024 investor letter:
“Super Micro Computer, Inc. (NASDAQ:SMCI) had a tough quarter due to a confluence of negative events. It declined, but is still up significantly for the year. While demand for the company’s AI server racks remains strong, with revenue up over 100%, gross margins have fallen sharply for two straight quarters, implying a price war. In addition, Super Micro was the subject of a short-seller report and a delay in filing its annual report with the SEC. We have been taking profits in the stock all year and have only a small position, which we are maintaining given the strong performance and demand for Super Micro’s AI racks and a depressed stock valuation.”
8. Target Corp (NYSE:TGT)
Number of Hedge Funds Investors: 49
Oliver Chen, TD Cowen senior retail analyst, said in a latest program on CNBC that he prefers Walmart and Costco over Target Corp (NYSE:TGT) and explained the challenges the discount department store is facing:
“We’re cautious on the consumer—cautiously optimistic. The consumer continues to be very choiceful and looking for bargains. We’re recommending Walmart and Costco, which offer a stronger value proposition and simply a lot more food. Target’s been under a lot more pressure because so much of the portfolio is discretionary. And what they really need to do to improve the comp store sales is increase pricing. They’re having problems in the home category and electronics. And as you think about Walmart versus Target—Walmart’s over 50% food; at Target, it’s about 20%.”
Diamond Hill Large Cap Strategy stated the following regarding Target Corporation (NYSE:TGT) in its Q2 2024 investor letter:
“Other bottom contributors in Q2 included CarMax, Target Corporation (NYSE:TGT) and ConocoPhillips. US-based mass retailer Target faces concerns about a slowing consumer discretionary spending environment, which weighed on shares in the quarter.”
7. General Motors Co (NYSE:GM)
Number of Hedge Funds Investors: 64
Jon McNeill, former Tesla president and General Motors Co (NYSE:GM) board member, said in a latest program on CNBC that General Motors Co (NYSE:GM) has built its business on “resilience” and the company can survive through the tariff-related shocks.
“I think in GM’s case, GM has built its business on resilience and hasn’t been waiting to react—it has been proactive around this. They’ve invested in a really resilient supply chain and an agile approach to manufacturing. And so GM is in a strong position to mitigate the short-term impacts and ensure customers get the GM cars that they want and love. As Mary Barra said recently, “We think that we can mitigate 30 to 50% of the tariffs without deploying capital.” So there’s a lot of reaction in the moment, and I understand that. GM has built a business model that can adapt, and there’s a lot of noise, but GM and the team are really focused on execution and can absorb these kinds of shocks.”
Hotchkis & Wiley Large Cap Value Fund stated the following regarding General Motors Company (NYSE:GM) in its Q3 2024 investor letter:
“General Motors Company (NYSE:GM) is one of the world’s largest manufacturers of passenger vehicles. GM reported a strong Q2; however, management provided a cautious outlook for the second half of 2024. Comments from GM mirrored those of other OEMs and auto suppliers, leading investors to believe the automotive cycle has peaked. We believe this is an overreaction, and we continue to view GM as an attractive investment. We like GM for many reasons. First, we believe GM has leading market positions in its main business segments. Second, the valuation is extremely attractive. Finally, it is a strong free cash flow generator, and the management team is committed to repurchasing their undervalued shares.”
6. Dell Technologies Inc (NYSE:DELL)
Number of Hedge Funds Investors: 60
Kim Forrest, chief investment officer at Bokeh Capital Partners, talked in a latest program on Schwab Network about the latest earnings of Dell and the impact of DeepSeek on the company. She is in a wait-and-see mode on Dell and said further “clarity” is needed on the company’s forward path in the changing environment.
“I’m a fundamental analyst, so I’m looking at things like demand drivers and, you know, the world in which Dell and the rest of the tech world works, and it’s a confusing one. Sure, there are issues with tariffs. We don’t know, like, are there going to be tariffs on stuff shipping out of Taiwan? We don’t know. Is that really China? Isn’t it? Who knows? So, there’s issue number one. But the bigger issue is demand, and I think this all goes back to AI. This is what has been driving demand, not necessarily demand for its PCs— even its AI PCs—it’s pretty small potatoes compared to the whole server market that drove Dell in this last year or so. So, looking at that, it’s a real conundrum of whether or not the companies are going to continue to demand these particular chips that Dell can provide. So, that’s a big question, and in what numbers. Deep Seek gives us an idea that there are different ways to build these models and do inference on asking the questions of the models, right? And will we really need this infinite amount of chips that people have been banking on, that investors really bought into names like Dell and Nvidia? And the answer is up in the air at this point.”
5. Tesla Inc (NASDAQ:TSLA)
Number of Hedge Funds Investors: 99
Matt Tuttle from Tuttle Capital said in a latest program on Schwab Network that Tesla Inc (NASDAQ:TSLA) could “end up” being an undervalued stock if it executives well on its capabilities in AI and self driving.
“I really look at Tesla as an AI vertical where they’ve got their hands in everything. They’ve got to execute on it, you know, the full self-driving, the robotics. They’ve got a lot of work to do, but if they can do it, this company could end up being really undervalued here. But again, if it’s just an EV company, it’s a totally different story. You know, it’s obviously run up a lot based on Elon’s relationship with Trump, and then I think people are realizing, with all of Elon’s companies, this one isn’t really going to benefit from a Trump relationship. So, it’s kicking around the 200-day moving average. It’s got to hold here, and then they’ve got to execute on the entire AI vertical vision to really justify it moving higher.”
Analysts are looking beyond Elon Musk’s big claims and digesting the harsh reality facing the company. Tesla’s sales are falling all over the world despite the broader industry growth. For example, in California, the largest U.S. market for electric vehicle adoption and sales, Tesla sales fell about 12% year over year in 2024, causing its market share to drop from 60.1% in 2023 to 52.5% in 2024. Was it because Californians are buying fewer EVs? No. Californians purchased more than 2 million electric cars during the year, almost doubled when compared to the past two years.
Things aren’t looking good for Tesla in Europe, too. For example, in Germany, Tesla delivered just 1,429 new cars in February, down 76% from the same month last year. In contrast, battery-electric vehicle (BEV) registrations surged 30.8% during the month.
Baron Partners Fund stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its Q4 2024 investor letter:
“Tesla, Inc. (NASDAQ:TSLA) designs, manufactures, and sells electric vehicles, related software and components, and solar and energy storage products. Shares rose on growth in the energy segment, the promise of new model launches in 2025, and increasing investor confidence in Tesla’s AI initiatives. Despite macroeconomic challenges, delivery data in major markets like China have shown considerable improvement. The energy and automotive segments demonstrated stronger-than-expected profitability. Tesla also expanded its advanced computing center in Texas, released improved version of its software-enhanced driving solution, and is set to launch new mass market vehicles years after the initial rollouts of Models 3 and Y. Expectations of deregulation under the incoming administration point to the potential acceleration of new technology rollouts, which could enhance Tesla’s leadership position in real world AI and bolster investor confidence that Tesla will benefit from these large and attractive growth opportunities.”