13 Best Hot Stocks To Buy Now
In this article, we discuss 13 best hot stocks to buy now. If you want to see more stocks in this selection, check out 5 Best Hot Stocks To Buy Now.
The US GDP grew by 2.9% in the fourth quarter of 2022, according to figures from the Commerce Department, topping consensus estimate of 2.8% from economists polled by Dow Jones. This growth was higher than expected, despite concerns about a potential recession. According to the IMF’s latest forecast, the global economic growth is expected to decrease from 3.4% in 2022 to 2.9% in 2023, and then recover to 3.1% in 2024. The 2023 forecast is slightly better than what was predicted in October 2022, but still lower than the average growth rate of 3.8% from 2000-2019.
The increase in central bank interest rates to curb inflation and the ongoing conflict in Ukraine are affecting global economic activity. The COVID-19 pandemic initially slowed growth in 2022, but the recent easing of restrictions has led to a faster-than-anticipated recovery. The forecast for global inflation is to decrease from 8.8% in 2022 to 6.6% in 2023 and 4.3% in 2024, although it remains higher than pre-pandemic levels of around 3.5%.
Richard Saperstein, the Chief Investment Officer at Treasury Partners, has expressed his belief that the stock market and economy are still facing challenges and are not yet in a secure position. He told Forbes on February 1:
“Markets have been reacting favorably to moderating inflation and expectations of a reduced pace of Fed tightening, but the lag effects of the Fed’s tightening so far will slow the economy in the second half of 2023 and cause analysts to slash earnings estimates, which ultimately is a headwind for stocks.”
As per Forbes, the stock market in China has begun 2023 with strong performance and is expected to continue to improve as the country eases its COVID-19 policies, such as lifting travel restrictions and ending lockdowns. This is due to the growth potential of the world's second-largest economy. Investors also favor value stocks since they tend to perform better than growth stocks during times of high interest rates. This is because high interest rates affect discounted cash flow valuations, which have a greater impact on high-growth stocks compared to value stocks. In addition to that, utilities, consumer staples, and healthcare stocks are considered to be defensive plays that can reduce overall portfolio risk until economic conditions improve. These stocks are generally less affected by economic fluctuations and can provide stability to an investment portfolio. Some of the best momentum stocks so far in 2023 include Meta Platforms, Inc. (NASDAQ:META), Tesla, Inc. (NASDAQ:TSLA), and Shopify Inc. (NYSE:SHOP).
Luis Louro / shutterstock.com
For this article, we first used stock screeners to identify stocks that have gained at least 50% year to date in 2023 and have an average 3-month volume of more than 5 million as of February 6. From this resultant dataset, we selected 13 hot stocks with the highest hedge fund sentiment. We have assessed the hedge fund sentiment from Insider Monkey’s database of 920 elite hedge funds tracked as of the end of the third quarter of 2022. The list is arranged in ascending order of the number of hedge fund holders in each firm.
Best Hot Stocks To Buy Now
13. AMC Entertainment Holdings, Inc. (NYSE:AMC)
Average 3-month Volume as of February 6: 30.66 million
YTD Share Price Gains as of February 6: 63.10%
Number of Hedge Fund Holders: 17
AMC Entertainment Holdings, Inc. (NYSE:AMC) is a Kansas-based company that owns, operates, and has interests in theaters in the United States and Europe. AMC Entertainment Holdings, Inc. (NYSE:AMC), one of the largest movie theater chains in the world, experienced a difficult 2022, with its stock declining 76% due to several factors, including low box-office returns, a shortage of major productions, and changes in theater attendance patterns caused by the ongoing COVID-19 pandemic. Despite the challenges of 2022, the release of Disney's Avatar: The Way of Water at the end of December gave a boost to both box-office revenue and theater attendance. This has had a positive impact that has continued into the new year. Year-to-date as of February 6, AMC Entertainment Holdings, Inc. (NYSE:AMC) stock has climbed 63%.
On January 30, AMC Entertainment Holdings, Inc. (NYSE:AMC) filed a proxy with the SEC detailing two proposals that are necessary to convert its preferred equity units into common shares. According to B. Riley analyst Eric Wold, the preferred equity unit holders control 64% of the combined holdings and may not get another chance to extract value from those units. Hence, the analyst expects the proposals to pass, which could open the door for the company to raise more equity in the coming years. This could help AMC Entertainment Holdings, Inc. (NYSE:AMC) eliminate all debt and pursue additional diversification options for growth in the media industry. The analyst has a Neutral rating on AMC's shares with a $4.50 price target and sees potential for a positive outcome in the mid-March vote.
According to Insider Monkey’s Q3 data, 17 hedge funds were long AMC Entertainment Holdings, Inc. (NYSE:AMC), compared to 18 funds in the last quarter.
Like Meta Platforms, Inc. (NASDAQ:META), Tesla, Inc. (NASDAQ:TSLA), and Shopify Inc. (NYSE:SHOP), AMC Entertainment Holdings, Inc. (NYSE:AMC) is one of the best momentum stocks to monitor.
12. C3.ai, Inc. (NYSE:AI)
Average 3-month Volume as of February 6: 5.62 million
YTD Share Price Gains as of February 6: 138.12%
Number of Hedge Fund Holders: 18
C3.ai, Inc. (NYSE:AI) is a California-based company that operates as an enterprise artificial intelligence software company in North America, Europe, the Middle East, Africa, the Asia Pacific, and internationally. It is one of the best hot stocks to invest in. On February 6, C3.ai, Inc. (NYSE:AI) shares rose more than 5% as investors continued to pour into artificial intelligence stocks. The year-to-date share price gains as of February 6 came in at more than 138%.
On February 2, DA Davidson analyst Gil Luria initiated coverage of C3.ai, Inc. (NYSE:AI) with a Buy rating and a $30 price target. The firm considers C3.ai, Inc. (NYSE:AI) to be a valuable asset in the critical software arena of artificial intelligence, as the emergence of generative AI is seen as a crucial application. The analyst believes that C3.ai, Inc. (NYSE:AI) can capitalize on its investment and experience in AI to generate revenue.
According to Insider Monkey’s third quarter database, 18 hedge funds were long C3.ai, Inc. (NYSE:AI), compared to 17 funds in the last quarter. Jim Simons’ Renaissance Technologies is the biggest position holder in the company, with approximately 3 million shares worth $37 million.
11. SoFi Technologies, Inc. (NASDAQ:SOFI)
Average 3-month Volume as of February 6: 44.13 million
YTD Share Price Gains as of February 6: 64.78%
Number of Hedge Fund Holders: 25
SoFi Technologies, Inc. (NASDAQ:SOFI) is a California-based provider of digital financial services. It operates through three segments – Lending, Technology Platform, and Financial Services. It is one of the best momentum stocks to buy. On January 30, SoFi Technologies, Inc. (NASDAQ:SOFI) stock rose by 8.4% in pre-market trading after the company reported Q4 results that exceeded analyst expectations and the company provided a higher guidance for 2023 adjusted EBITDA. SoFi Technologies, Inc. (NASDAQ:SOFI) is continuing to attract new members for its financial products and is forecasting 2023 adjusted net revenue to be between $1.93 billion to $2.00 billion, compared to the consensus estimate of $1.98 billion. The firm sees adjusted EBITDA of $260 million to $280 million, compared to a consensus of $253.8 million.
On January 31, Citi analyst Ashwin Shirvaikar stated that SoFi Technologies, Inc. (NASDAQ:SOFI) exceeded expectations in Q4 and has outperformed expectations three times since resetting them for the student loan moratorium push-out from Q1 of 2022. The analyst is positive about SoFi Technologies, Inc. (NASDAQ:SOFI)’s push to achieve GAAP profitability by Q4 2023 and the projected positive contribution margins in its faster-growing Financial Services segment. However, questions about growth and its balance sheet expansion/gain-on-sale will persist. Despite these concerns, Citi maintained a Buy rating on SoFi Technologies, Inc. (NASDAQ:SOFI) shares with a $10 price target.
According to Insider Monkey’s data, 25 hedge funds were long SoFi Technologies, Inc. (NASDAQ:SOFI) at the end of September 2022, compared to 22 in the last quarter. Jim Davidson, Dave Roux, and Glenn Hutchins’ Silver Lake Partners is the leading stakeholder of the company, with 31.15 million shares worth $152 million.
Here is what Altron Capital Management had to say about SoFi Technologies, Inc. (NASDAQ:SOFI) in its Q4 2021 investor letter:
“We have been building our position in SoFi over the last two quarters but have not yet written about our thesis until now. SoFi is an online financial technology company that started off refinancing student loans. This segment remains a big part of the company’s business, but they have more recently expanded their products to offer an entire suite of financial services including personal banking, investing, and credit. While their collection of products is still evolving and not yet complete, we believe the company is in the early stages of its inflection. The company nearly doubled its member count over the past year and is growing 50%+ despite its loan refinancing business taking a hit due to the COVID-related loan moratorium. Furthermore, the company is close to obtaining a bank charter through its acquisition of Golden Pacific Bancorp, a community bank based in Sacramento. A bank charter would allow SoFi to take in its own customer deposits, lowering its cost of capital and expanding the company’s breadth of financial offerings.
While SoFi is not the only online banking platform out there, we believe it could take a decent share of the financial services market. Banking is a notoriously sticky business, as the inconvenience and hassle of switching banks prevent consumers from jumping to competitors regardless of cost. This is one of the reasons that traditional banks are one of the few businesses to have truly been disrupted by technology. We think SoFi is well on its way to changing that and creating a new paradigm for the future of consumer banking and financial services.
The factors that will ultimately drive consumer adoption of online banking are cost and convenience. In our opinion, SoFi is best positioned to drive consumers away from the legacy banking model. Their one-stop-shop approach for financial services and their lack of a brick-and-mortar branch network to maintain may eventually propel them into becoming one of the larger players in the banking industry in the United States…” (Click here to see the full text)
10. Affirm Holdings, Inc. (NASDAQ:AFRM)
Average 3-month Volume as of February 6: 17.7 million
YTD Share Price Gains as of February 6: 87.47%
Number of Hedge Fund Holders: 26
Affirm Holdings, Inc. (NASDAQ:AFRM) was founded in 2012 and is headquartered in San Francisco, California. The company's platform for digital and mobile-first commerce includes point-of-sale payment solutions for consumers, merchant commerce solutions, and a consumer-centric app. On February 1, Deutsche Bank analyst Bryan Keane increased the firm's price target on Affirm Holdings, Inc. (NASDAQ:AFRM) from $11 to $18, while maintaining a Hold rating on the shares. The analyst believes that there is "more muted upside" compared to consensus estimates and the company's guidance for both Q2 and the fiscal year 2023 due to the potential for an upcoming economic slowdown. However, the price target was raised to reflect the recent increase in valuations among consumer lending fintechs in the same peer group.
According to Insider Monkey’s data, 26 hedge funds held long positions in Affirm Holdings, Inc. (NASDAQ:AFRM) as of the end of Q3 2022, compared to 27 funds in the last quarter. Colin Moran’s Abdiel Capital Advisors is a significant position holder in the company, with 2.17 million shares worth $40.7 million. Affirm Holdings, Inc. (NASDAQ:AFRM) is one of the best momentum stocks to buy according to smart investors.
Here is what Bireme Capital specifically said about Affirm Holdings, Inc. (NASDAQ:AFRM) in its Q2 2022 investor letter:
“We recently covered our short position in Affirm Holdings, Inc. (NASDAQ:AFRM) after a rapid decline brought the share price to ~$30 – down from our entry point above $100 – in only 7 months. We discussed Affirm in our Q4 letter, saying the following:
Affirm is a “Buy Now, Pay Later” (BNPL) company founded by former PayPal CTO and cofounder Max Levchin. They provide installment loans to consumers, partnering with retail companies looking to drive higher sales. They have two primary products: a zero-fee installment loan for consumers with the best credit scores, and a more traditional product with 20%+ interest rates for subprime borrowers. Their stated plan is to disrupt the credit industry with more transparent, lower-fee loans. At a roughly $28b market cap at the start of 2022, AFRM stock was priced at more than 20x trailing sales, a steep price for a money-losing lender. While their early lead in online BNPL transactions and partnerships with fast-growing retailers like Peloton has fueled significant historical growth, a wave of competition has arrived… While the stock has already fallen sharply from where we initiated our short position, we think it could fall another ~40% to trade at 8x FY2022 sales.
Interestingly, not much has changed about Affirm’s business from when it sported a $28b market cap. Estimates for 2022 sales have been inching up, from $1.25b at the start of the year to $1.35b today. And analysts estimate that the company will lose about $150m of EBITDA this year, slightly better than estimates in January. Rather than a story of deteriorating business fundamentals, this was a story of market participants simply deciding that a fast-growing, money-losing subprime lender – even a disruptive one – with around $1b of revenues should not be worth twenty-eight billion dollars. We think the current valuation is much more reasonable, and we do believe that Affirm will eventually generate profits from its lending platform, so we covered our short position.”
9. Coinbase Global, Inc. (NASDAQ:COIN)
Average 3-month Volume as of February 6: 17.28 million
YTD Share Price Gains as of February 6: 119.52%
Number of Hedge Fund Holders: 28
Coinbase Global, Inc. (NASDAQ:COIN) offers technology and financial infrastructure for the global crypto economy. It was founded in 2012 and is based in Wilmington, Delaware. Coinbase Global, Inc. (NASDAQ:COIN) is one of the best momentum stocks to monitor. Year to date, the stock has climbed nearly 120% as of February 6 and the average 3-month trading volume came in at 17.28 million.
On January 20, JPMorgan analyst Kenneth Worthington raised the firm's price target for Coinbase Global, Inc. (NASDAQ:COIN) from $53 to $60 and maintained a Neutral rating on the shares. The analyst stated that the recent surge in cryptocurrency prices in early 2023 has had a positive impact on broker/exchanges like Coinbase, as higher volumes and prices help the company's performance. He believes that although the crypto ecosystem has had credibility issues, Coinbase Global, Inc. (NASDAQ:COIN) has emerged with its credibility and brand strengthened compared to other brokers/exchanges following the collapse and bankruptcy of FTX.
According to Insider Monkey’s Q3 data, 28 hedge funds were bullish on Coinbase Global, Inc. (NASDAQ:COIN), compared to 29 funds in the last quarter. Cathie Wood’s ARK Investment Management is the largest stakeholder of the company, with 7.71 million shares worth $497.6 million.
Here is what Miller Value Partners Opportunity Trust Fund has to say about Coinbase Global, Inc. (NASDAQ:COIN) in its Q2 2022 investor letter:
“Coinbase Global Inc. Ordinary Shares (NASDAQ:COIN) fell during the quarter as the crypto markets continued to suffer. While the company reported disappointing results, it committed to capping EBITDA losses at $500M even in the event of “a prolonged market downturn”. COIN’s ample liquidity ($6b in cash on hand) should enable them to survive a prolonged “crypto winter” and invest to strengthen the business in the downturn. While the crypto market is early in its adoption, Coinbase is focused on building the platform for crypto not only supporting trading, and cold storage, but moving into NFTs, staking, and crypto derivatives. We see tremendous upside potential for COIN over the next decade if they are able to successfully execute on their platform strategy.”
8. Transocean Ltd. (NYSE:RIG)
Average 3-month Volume as of February 6: 22.52 million
YTD Share Price Gains as of February 6: 58.56%
Number of Hedge Fund Holders: 36
Transocean Ltd. (NYSE:RIG) was founded in 1926 and is based in Steinhausen, Switzerland. The company provides offshore contract drilling services for oil and gas wells worldwide. On January 4, Transocean Ltd. (NYSE:RIG) announced that it has secured contract awards and extensions for five of its drilling rigs, which will result in a total of $488 million in firm order backlogs. It is one of the best momentum stocks to consider buying.
On January 25, BTIG analyst Gregory Lewis raised the firm's price target for Transocean Ltd. (NYSE:RIG) to $10 from $8 and maintained a Buy rating on the shares. The analyst noted that the offshore drilling market is undergoing an ongoing upcycle, with leading edge drillship day rates having more than doubled since early 2021 to over $450,000 per day, which is the highest level since 2015. BTIG expects that with drillship day rates consistently above $400,000, there will likely be more drillship reactivations in the coming year.
According to Insider Monkey’s Q3 data, 36 hedge funds were bullish on Transocean Ltd. (NYSE:RIG), compared to 28 funds in the earlier quarter. Stephen Mildenhall’s Contrarius Investment Management is the largest stakeholder of the company, with 27.7 million shares worth $68.4 million.
7. Lyft, Inc. (NASDAQ:LYFT)
Average 3-month Volume as of February 6: 15.63 million
YTD Share Price Gains as of February 6: 57.46%
Number of Hedge Fund Holders: 37
Lyft, Inc. (NASDAQ:LYFT) is a California-based company that runs a platform connecting passengers with drivers for ride sharing services in North America. The firm manages transportation networks that provide customers with tailored, on-demand access to different transportation options. It is one of the premier momentum stocks to invest in.
On January 30, MoffettNathanson analyst Michael Morton initiated coverage of Lyft, Inc. (NASDAQ:LYFT) with a Market Perform rating and a $15 price target. The company's growth at all costs over the past decade is now behind it and the toughest times are over, the analyst wrote in a research note. He believes that the leading companies in the gig economy are becoming firmly established, marketing efforts are reducing, and consolidation is taking place in the U.S. market. However, MoffettNathanson argued that Lyft, Inc. (NASDAQ:LYFT) is at a disadvantage compared to Uber's mobility and delivery network effect.
According to Insider Monkey’s Q3 data, 37 hedge funds were bullish on Lyft, Inc. (NASDAQ:LYFT), compared to 35 funds in the prior quarter. Ken Fisher’s Fisher Asset Management is the leading position holder in the company, with 11.7 million shares worth $154.4 million.
Here is what Artisan Partners specifically said about Lyft, Inc. (NASDAQ:LYFT) in its Q2 2022 investor letter:
Lyft, Inc. (NASDAQ:LYFT), the second-largest ride-hailing company in the US, connects riders and drivers over a mobile app. When we began our GardenSM campaign, our thesis was based on a likely strong ridership recovery post-pandemic, as well as management’s growing focus on increasing profitability after years of heavy investment. While the company has made some progress on margins as the economy has re-opened, driver shortages and fuel inflation have disrupted that progress. Given uncertainty around when these cost pressures could abate, we exited our position.
6. Carvana Co. (NYSE:CVNA)
Average 3-month Volume as of February 6: 30.49 million
YTD Share Price Gains as of February 6: 184.88%
Number of Hedge Fund Holders: 43
Carvana Co. (NYSE:CVNA) is an Arizona-based company that operates an e-commerce platform for buying and selling used cars in the United States. On January 26, JMP Securities analyst Nicholas Jones maintained an Outperform rating on Carvana Co. (NYSE:CVNA) but lowered the firm's price target on the shares to $15 from $25 as part of a broader research note on Internet and Digital Media. The analyst believes that current projections for Carvana Co. (NYSE:CVNA)’s earnings and revenue may still be overly optimistic based on the volume of new and used vehicles sold, the average price of vehicles, and the availability of inventory.
According to Insider Monkey’s data, Carvana Co. (NYSE:CVNA) was part of 43 hedge fund portfolios at the end of September 2022, compared to 47 funds in the prior quarter. Clifford A. Sosin’s CAS Investment Partners is the largest stakeholder of the company, with 6.8 million shares worth $138.6 million.
In addition to Meta Platforms, Inc. (NASDAQ:META), Tesla, Inc. (NASDAQ:TSLA), and Shopify Inc. (NYSE:SHOP), Carvana Co. (NYSE:CVNA) is one of the hottest stocks in the market.
Miller Value Partners made the following comment about Carvana Co. (NYSE:CVNA) in its Q4 2022 investor letter:
“Carvana Co. (NYSE:CVNA) 10.25% 5/1/2030 was the top detractor for the quarter. The auto retailer reported 3Q22 revenue of $3.39B, -2.7% Y/Y, below consensus of $3.71B, and gross profit per unit (GPU) of $3.5K, +4.2% sequentially, but -25.1% Y/Y, and below consensus of $3.74K. Adjusted EBITDA for the quarter came in at -$186MM, compared to 3Q21 EBITDA of $20MM, as the company sold 102.6K retail units in the quarter, -8.4% Y/Y. Management noted it has made strong progress in reducing selling, general, and administrative (SG&A) expenses on an absolute dollar basis, as the company is still striving to eventually achieve total GPU in excess of $4K and significant adjusted EBITDA profitability at current volume levels, although the timeline for achieving these goals is uncertain. During the quarter, multiple creditors, including Apollo and PIMCO, which account for ~70% of Carvana’s total outstanding unsecured debt, agreed to a cooperation agreement in the event of any debt restructuring negotiations with the company.”
Click to continue reading and see 5 Best Hot Stocks To Buy Now.
Disclosure: None. 13 Best Hot Stocks To Buy Now is originally published on Insider Monkey.