12 Most Promising Future Stocks to Buy
In this article, we take a look at 12 most promising future stocks to buy. If you want to see more most promising future stocks to buy, go directly to 5 Most Promising Future Stocks to Buy.
Future stocks are stocks of companies that could play a meaningful role in the future.
Although it is impossible to know what the future will be exactly, it is likely that technology will continue to advance in the future with AI potentially being one of the key technologies.
Some leading companies that do well in AI could potentially do well in the long term.
While it is impossible to know exactly which companies will do well, the leading big tech companies with substantial financial resources have arguably a better chance of success in the future than companies that don't have as much resources.
The leading big tech companies have world class employees and substantial datasets and processing power to make potentially useful AI applications.
They also have huge existing userbases that they can offer AI apps to relatively quickly.
The big tech companies also have the financial resources to buy into or invest into potentially transformative new tech companies.
Microsoft Corporation (NASDAQ:MSFT), for instance, invested $1 billion into OpenAI in 2019 and another $10 billion in 2023. OpenAI makes the popular chat app ChatGPT which although the app makes mistakes has reached 100 million users in just two months.
With its investment, Microsoft Corporation (NASDAQ:MSFT) also has the added benefit of potentially benefiting from more cloud computing demand as well and also potentially improving its search engine, Bing.
When it comes to future stocks, stocks of companies with substantial competitive advantages that could play a part in the future, especially in technology, can be potential candidates for investments.
That being said, the shares of many big tech companies did not do well in 2022 given the Federal Reserve raised interest rates substantially in response to high inflation. Although shares of many big companies have rallied this year, there is still potential economic uncertainty if the U.S. central bank raises rates too much further.
As a result, the stock market has downside if economic data doesn't meet expectations and it could be a good idea for long term investors to own a well diversified portfolio of leading stocks across many different sectors.
Methodology
For our list of 12 Most Promising Future Stocks to Buy, we selected 12 stocks of companies with substantial competitive advantages that could play a part in the future.
We ranked them based on the number of hedge funds in our database of 943 funds that held shares at the end of Q4.
For those of you interested, check out 10 High Growth Dividend Paying Stocks to Buy.
12 Most Promising Future Stocks to Buy
12. SAP SE (NYSE:SAP)
Number of Hedge Fund Holders: 18
SAP SE (NYSE:SAP) is an enterprise software company which could be part of the future workplace given it makes various apps for businesses. The company is also incorporating AI into its software to make suggestions and offer potential insights. For full year 2022, the company's cloud sales rose 33% year over year and its current cloud backlog exceeded €12 billion. Total revenue rose 11% year over year. Out of the 943 hedge funds in our database at the end of Q4, 18 owned shares of SAP SE (NYSE:SAP) at the end of Q4, ranking the company #12 on our list of 12 Most Promising Future Stocks to Buy.
Alongside Meta Platforms, Inc. (NASDAQ:META), Amazon.com, Inc. (NASDAQ:AMZN), and Microsoft Corporation (NASDAQ:MSFT), SAP SE (NYSE:SAP) is a future stock with growth potential.
11. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 43
International Business Machines Corporation (NYSE:IBM) could be part of the future given it has a growing hybrid cloud business and the company is also one of the leaders when it comes to quantum computing. International Business Machines Corporation (NYSE:IBM) said of its hybrid cloud opportunity, "An important part of our open hybrid cloud platform’s value lies in the expertise and services we provide to help clients on their journey—whether that’s modernizing apps, building cloud-native apps, or migrating to the cloud. This represents a significant portion of the $1 trillion opportunity. What gives our open hybrid cloud platform the fuel it needs to accelerate adoption and become ubiquitous is the large ecosystem of partners we are building. With freed up resources, we will continue to form strategic partnerships as we have recently done with Tech Mahindra, Adobe, and Schlumberger." International Business Machines Corporation (NYSE:IBM) has a forward P/E ratio of 13.02 and a dividend yield of 5.01% as of 2/21.
10. ASML Holding N.V. (NASDAQ:ASML)
Number of Hedge Fund Holders: 59
ASML Holding N.V. (NASDAQ:ASML) is a leading semiconductor equipment producer that is a future stock given semiconductors are considered the new oil of this century given how essential they are for modern technologies such as computers, smartphones, AI processing, and more. If demand for semiconductor end products increase like analysts expect and the company maintains its edge in its field, ASML Holding N.V. (NASDAQ:ASML) has substantial growth potential for the years to come. As of 2/21, ASML Holding N.V. (NASDAQ:ASML) has a forward P/E ratio of 25.61 and a dividend yield of 1.58%.
9. Oracle Corporation (NYSE:ORCL)
Number of Hedge Fund Holders: 65
Although Oracle Corporation (NYSE:ORCL)'s database software might not be as in demand in the future, the company is nevertheless a future company given it is incorporating AI into its enterprise products. Oracle Corporation (NYSE:ORCL) has also had a long history of M&A of buying companies that increases its sales. If it purchases the right companies, Oracle Corporation (NYSE:ORCL) could remain a leading software maker in workplaces in the future too.
8. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 97
Advanced Micro Devices, Inc. (NASDAQ:AMD) is one of the leading semiconductor producers in the United States. In recent years, Advanced Micro Devices, Inc. (NASDAQ:AMD) has gained market share given its semiconductors have surpassed Intel in some ways. As a result, Advanced Micro Devices, Inc. (NASDAQ:AMD)'s sales have grown at a fair rate and analysts expect the company to grow into its relatively high valuation in the future. In Q4 2022, the company's sales rose 16% year over year to $5.599 billion and analysts expect the company to earn $3.50 per share in 2022, $3.10 per share in 2023, $4.31 per share in 2024, and $5.40 per share in 2025.
7. The Walt Disney Company (NYSE:DIS)
Number of Hedge Fund Holders: 99
Although most people don't view it as a technology company, The Walt Disney Company (NYSE:DIS) is arguably a future company given it owns valuable brands in terms of Star Wars and the Marvel Cinematic Universe that could be potentially useful in the metaverse. If the metaverse becomes as big as some bullish analysts predict, The Walt Disney Company (NYSE:DIS) could potentially gain another valuable income stream by making various metaverse related services that incorporate its substantial library of characters. 99 hedge funds in our database owned shares of The Walt Disney Company (NYSE:DIS) at the end of Q4.
6. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 106
NVIDIA Corporation (NASDAQ:NVDA) is a future stock given its GPUs are used for AI processing in some instances. If AI apps such as ChatGPT continue to improve, their usage and demand could continue to increase. If overall AI usage increases, demand for computer processing for AI could increase and NVIDIA Corporation (NASDAQ:NVDA) could sell more GPUs if it maintains its technological edge. 106 hedge funds in our database owned shares of NVIDIA Corporation (NASDAQ:NVDA) at the end of Q4, ranking the stock #6 on our list of 12 Most Promising Future Stocks to Buy.
Like NVIDIA Corporation (NASDAQ:NVDA), Meta Platforms, Inc. (NASDAQ:META), Amazon.com, Inc. (NASDAQ:AMZN), and Microsoft Corporation (NASDAQ:MSFT) are future stocks with growth potential.
Click to continue reading and see 5 Most Promising Future Stocks to Buy.
Suggested articles:
Disclosure: None. 12 Most Promising Future Stocks to Buy is originally published on Insider Monkey.
