In this article, we take a look at the 10 hot growth stocks to buy now. If you want to see more hot growth stocks, go directly to5 Hot Growth Stocks To Buy Now.
Global stock markets fell in 2022, with the S&P 500 index declining over 19.4%by year's end. One of the main reasons for the S&P 500's drop in 2022 was the increase in interest rates to fight inflation. However, it's equally crucial to understand that equities rise more frequently than they fall and they usually don't decline two years in a row. The S&P 500 increased by 4% so far in 2023.
When interest rates are low and the economy is growing, growth stocks tend to perform well. They outperformed value stocks and the S&P 500 significantly from the end of the global financial crisis until recently. However, the era of low-interest rates and increasing stock prices has come to an end. As a consequence, growth stocks suffered losses in 2022, with the S&P 500 growth index dropping around 30.1%, compared to a 7.4% decline in the value index (.IVX).
Among the greatest losers in the S&P 500 growth index (.IGX), down between 28% and 66% in 2022, are Alphabet Inc. (NASDAQ:GOOG), Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), NVIDIA Corporation (NASDAQ:NVDA), Amazon.com, Inc. (NASDAQ:AMZN), and Tesla, Inc. (NASDAQ:TSLA). Investors have turned away from growth equities and towards value stocks due to rising interest rates. The previously exorbitant values of growth companies have decreased, creating excellent buying opportunities for long-term investors who are willing to seize them.
In 2023, growth stocks have been the go-to investment, with many of them experiencing significant gains since the start of the year. These stocks are popular among investors due to their impressive returns and exceptional financial growth, which often place them in rapidly expanding sectors such as technology, e-commerce, and biotechnology. As a result, growth companies have the potential to generate substantial profits, with certain stocks showing particular promise. To capitalize on this opportunity, here are ten growth stocks that are currently hot and worth considering for purchase.
Keeping all these points in mind, let’s start our list of the 10 hot growth stocks to buy now. For this article, we have picked the stocks with at least a 20% revenue growth rate over the last 12 months and sorted them by their 3 month returns. In addition, we have excluded companies smaller than $500 million in market cap and $2 million in daily trading volume.
10. The Walt Disney Company (NYSE:DIS)
Revenue Growth Rate over Last 12 Months: 22.70%
3 months return: 11.30%
Number of Hedge Fund Holders: 112
The Walt Disney Company (NYSE:DIS) is a media and entertainment conglomerate. It creates and acquires television shows, live-action films, and animated films. Shares of the company rallied 17.45% in the last month, resulting in a 203.41 billion market capitalization. Walt Disney's current price-to-earnings ratio (TTM) is 63.31x, based on the company's most recent financial reports and stock price. In addition, the company's P/E ratio was 91.1x at the end of 2021.
As part of the company's Q4 media networks overview, Macquarie analyst Tim Nollen increased his price objective on The Walt Disney Company (NYSE:DIS) from $110 to $122, maintaining an Outperform rating onthe stock. In addition, the firm predicted that fiscal Q2, the first quarter of results following CEO Bob Iger's comeback, would be crucial, with a particular focus on an update on the decline in direct-to-consumer losses.
Overall, hedge funds are loading up on The Walt Disney Company (NYSE:DIS), as 112 out of the 920 funds tracked by Insider Monkey held stakes in the media giant up from 109 funds a quarter earlier. Ric Dillon's Diamond Hill Capital is the company's biggest stakeholder, with 2.88 million shares worth $250.52 billion.
In its Q4 2022 investor letter, Madison Funds highlighted a few stocks, and The Walt Disney Company (NYSE:DIS) was one of them.Hereis what the fund said:
“The Walt Disney Company(NYSE:DIS) reported a disappointing fourth quarter with revenue and earnings below consensus which was followed by the board replacing then-CEO Bob Chapek and the return of Bob Iger as CEO. Parks remained a bright spot while losses at direct-to-consumer increased and linear networks continued to be challenged by cord cutting.”
9. Performance Food Group Company (NYSE:PFGC)
Revenue Growth Rate over Last 12 Months: 59.65%
3 months return: 15.77%
Number of Hedge Fund Holders: 33
Performance Food Group Company (NYSE:PFGC) is one of North America's top food and food-service distribution firms. PFG employs over 30,000 employees who operate in more than 150 sites around the country to supply over 300,000 national and branded food goods to over 300,000 client locations. In the third quarter, 33 hedge funds monitored by Insider Monkey were bullish on Performance Food Group Company (NYSE:PFGC). The stakes of these funds are valued at $607.87 million.
In 2023, PFGC stock increased marginally, from $57 to about $60 per share. Performance Food Group Company (NYSE:PFGC)'s revenue increased 8.3% YoY to $13.89 billion in Q2 FY '23. Furthermore, the company's gross profit increased by 17% to $1.5 billion. Net sales increased 8.3% year on year to $13.9 billion in the second quarter of fiscal 2023. Net sales increased largely due to an increase in selling price per case as a result of inflation and channel mix.
As part of a larger research note on Restaurants resulting from the ICR Conference presentations, Truist analyst Jake Bartlett boosted his price objective on Performance Food Group Company (NYSE:PFGC) to $75 from $72 and maintained a Buy rating on the shares on January 12. According to the analyst, the conference verified that restaurant demand is still strong. This supports his bullish outlook for equities in the restaurant and foodservice distribution sectors.
Hereis whatClearBridge Investmentshad to say about Performance Food Group Company (NYSE:PFGC) in its Q4 2021 investor letter:
“Performance Food Group is another example of a quality franchise bought during a depressing period for the food service industry that has flexed its balance sheet to make acquisitions of weaker players and continues to consolidate its leading market share.”
8. Salesforce, Inc. (NYSE:CRM)
Revenue Growth Rate over Last 12 Months: 21.26%
3 months return: 18.06%
Number of Hedge Fund Holders: 117
Salesforce, Inc. (NYSE:CRM) offers customer relationship management software that connects businesses and customers globally. With more than 150,000 users across 150,000 companies, Salesforce holds a 33% market share as the most popular CRM system. With 22%, Microsoft's Dynamics platform is second, and Oracle completes the top three with 11%. According to data on Salesforce application development, the reason for Salesforce's popularity is that it provides a variety of capabilities that are difficult to find in a single CRM program. Although Salesforce's stock has been up 17.78% so far in 2023, it was still down a staggering 45% from its all-time high in November 2021.
Salesforce has witnessed an unprecedented revenue increase over the last decade, with revenue topping $26.49 billion for the fiscal year 2022, a 25% increase over the previous year's period. In 2012, the company's sales was $2.27 billion.
Although Salesforce's growth has slowed, the situation is not as dire as the markets have suggested. Salesforce anticipates sales to increase by 17% to around $31 billion for the fiscal year 2023, which ends on January 30. In addition, Salesforce aims for $50 billion in revenue and consistent profit expansion by the fiscal year 2026. Moreover, Elliott Management, an activist investor, just acquired a sizeable investment in Salesforce. Because other activists also have stakes in the business, they'll all urge Salesforce to increase its profitability.
At the end of Q3 2022, 117 hedge funds owned a stake in Salesforce, Inc. (NYSE:CRM), up from 116 in the preceding quarter. On January 30, Morgan Stanley analyst Keith Weiss maintained an Overweight rating on Salesforce and increased his price objective to $236 from $228, contending that the current valuation considerably underpriced future profitability potential.
Oakmark Funds mentioned Salesforce, Inc. (NYSE:CRM) in its Q3 2022 investor letter.Here’swhat the firm said:
“Salesforce, Inc.(NYSE:CRM)has become a dominant global player in sales, customer service, commerce and marketing software over the past 20 years. The company earns 80% gross margins and grows 20% organically. Plus, virtually all of its revenue is recurring. We see Salesforce as a great business that we’ve admired from afar for a long time. More recently, the organization has made some changes at the top that prompted us to take a closer look at the stock. New CEO Bret Taylor and CFO Amy Weaver are bringing a culture of financial discipline. We believe this renewed focus on profitability and capital return, combined with Salesforce’s strong underlying business characteristics, will yield strong results. The current valuation of 3.9x next year’s revenues represents a significant discount compared to publicly traded peers and recent private market values in the software space that have similar growth profiles. We view this discount as an opportunity to invest in a great business at a good value.”(Video) WATCH IMMEDIATELY! I JUST BOUGHT A TON OF THIS TODAY TO GET READY FOR THE FED'S NEXT MOVE!
7. Airbnb, Inc. (NASDAQ:ABNB)
Revenue Growth Rate over Last 12 Months: 50.97%
3 months return: 21.89%
Number of Hedge Fund Holders: 58
Airbnb, Inc. (NASDAQ:ABNB) runs a vacation marketplace that links visitors with rental units listed by over 4 million hosts worldwide. Currently, 20% of the holiday rental market is controlled by Airbnb. In contrast to the P/E of 21.05x for the Internet - Content industry, Airbnb, Inc.'s trailing-twelve-months P/E is 49.87x.
Since its Nasdaq debut in December 2020, Airbnb stock has mesmerized and piqued the interest of investors in growth stocks. The price of ABNB stock from its initial public offering of $68 per share rose as much as 223%, reaching an all-time high of 219.94 on February 11, 2021. Airbnb, Inc. (NASDAQ:ABNB) stock is undoubtedly off to a very strong start in 2023. The company shares have offered investors more than 30.39% in returns over the past month.
On January 25, Justin Post, a BofA analyst, increased his price objective on Airbnb from $125 to $130 while maintaining a Neutral rating for the stock. At the end of the third quarter of 2022, 58 hedge funds in the database of Insider Monkey held stakes worth $ 2.02 billion in Airbnb, Inc. (NASDAQ:ABNB), up from 57 in the preceding quarter worth $1.79 billion. Beech Hill Partners is the company’s largest shareholder, with shares worth $1.50 billion.
In its Q2 2022 investor letter, Brick By Brick Capital highlighted a few stocks, and Airbnb, Inc. (NASDAQ:ABNB) was one of them.Hereis what the fund said:
What is millennial tech?
It is a term I have coined to describe the type of companies I research. It is a disruptive technology that is changing the status quo of a given industry. For example,Airbnb(NASDAQ:ABNB) with the lodging industry. This definition casts a wide net in terms of what sectors I look at, but it is very specific in terms of what type of companies I look at. I also believe focusing on these companies gives me an inherent edge over Wall St. as they are often older and disconnected from what is truly innovative (…Click here to read more).”
6. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Revenue Growth Rate over Last 12 Months: 43.61%
3 months return: 30.32%
Number of Hedge Fund Holders: 89
Advanced Micro Devices, Inc. (NASDAQ:AMD) is a Santa Clara, California-based maker of industry-leading processors, graphics processing units (GPUs), and other hardware, software, and tools. Shares of this chipmaker have returned 22.28% over the past month.
In the fourth quarter, Advanced Micro Devices, Inc. (NASDAQ:AMD) reported $5.6 billion in sales, a +16% year-over-year gain largely driven by growth across the Embedded and Data Center sectors, somewhat offsetting reduced revenue in the Client and Gaming segments. This is remarkable given that all major cloud providers, including Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG), have issued warnings about declining demand for their cloud services as a result of corporate budget cuts and a growing emphasis on cost-cutting.
Advanced Micro Devices, Inc. (NASDAQ:AMD) has consistently outperformed consensus EPS forecasts over the past four quarters. Over this time, the firm three times outperformed consensus sales projections. However, hyper scalers increasingly employ EPYC processors in high-performance computing since they outperform the competition in terms of performance and energy efficiency. As a result, the business is well positioned to take a sizable chunk of the supercomputer industry, which is expected to be worth $21 billion in 2026, as it powers 101 of the 500 fastest supercomputers in the world.
Based on 15 buy, 7 hold, and 0 sell opinions, the consensus rating for Advanced Micro Devices, Inc. (NASDAQ:AMD) is ‘Moderate Buy.’ At the end of the third quarter, 89 hedge funds in Insider Monkey's database held stakes in Advanced Micro Devices, Inc. (NASDAQ:AMD), up from 87 in the preceding quarter.
Baron Funds mentioned Advanced Micro Devices, Inc. (NASDAQ:AMD) in its Q2 2022 investor letter.Hereis what the fund said:
“Advanced Micro Devices, Inc.(NASDAQ:AMD) is a global fabless semiconductor company focusing on high-performance computing technology, software, and products. AMD designs leading high-performance central and graphics processing units (known as CPUs and GPUs) and integrates them with hardware and software to build differentiated solutions for customers……. (Click here to read the full text).”
Click to continue reading and see 5 Hot Growth Stocks To Buy Now.
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Disclosure: None. 10 Hot Growth Stocks To Buy Nowis originally published on Insider Monkey.