In this article, we look at the 12 best S&P 500 stocks to buy, as selected by analysts. If you would like to skip this article on the latest happenings surrounding one of America's most widely followed stock indexes, please visit the following link. The 5 best S&P 500 stocks to buy, according to analysts.
The S&P 500 is having a great year so far. The main stock indexes were pretty volatile a little over a year ago, but they've been doing well lately. This performance comes after the end of 2022, when analysts and investors were worried about a U.S. economic recession due to high interest rates. However, 2023 brought a number of surprises in the form of artificial intelligence, lower inflation, and economic growth, all of which ended up calming the bears.
So how great was the first quarter of 2024 for the S&P 500? First of all, the index set new records this year. In fact, the index has been setting records regularly in 2024, with the most recent record set just before the big Easter holiday weekend. With this, the S&P 500 Index set a new closing price record of 5,245. This makes the index a coveted benchmark that most would have thought impossible at its close in 2022, and in a time marked by “expensive” and hardship. It was guaranteed that it would remain at a level comfortably above 5,000 points. To get cash because interest rates are high.
The next question to ask is why is the S&P 500 setting new records? Ultimately, despite the continued euphoria surrounding artificial intelligence, by the end of the first quarter of 2024, investors may have readjusted their expectations about the Federal Reserve's potential to lower bank rates. There is. Those expectations have changed for the worse, with most now expecting rate cuts to begin later than originally expected.
Now, several macroeconomic data points have caused the S&P to set new records. For example, investors were in for a pleasant surprise in the form of an upward revision to the GDP growth rate for Q4 2023, with the new forecast coming in at just 3.4%, up from the previous 3.2%. Additionally, U.S. home sales rose 1.6% in February, beating expectations for a 1.5% increase, even as the commercial real estate sector continues to feel the pinch from large swings in the bond market and interest rate environment. . Another data point not yet reflected in the S&P 500 is the personal consumption expenditures (PCE) index, the Fed's preferred measure of inflation. The latest data shows U.S. inflation as of February 2024 at 2.5%, meeting expectations and more in line with the Fed's recommended 2% forecast.
Digging deeper, stocks that have fueled the S&P 500's 11% year-to-date rise include Super Micro Computers (NASDAQ:SMCI), Constellation Energy Corporation (NASDAQ:CEG), and of course Wall Street's A.I. The darling, NVIDIA Corporation (NASDAQ:NVDA). These three stocks are up 254%, 60%, and 88% year-to-date, and the fact that two out of three out-performing S&P 500 stocks in Q1 2024 are technology companies is a sign that artificial intelligence It shows how it fundamentally changed stock prices. Market evaluation. We all know that it was NVIDIA's high-end GPUs that injected stock prices on steroids, but in the case of Super Micro and Constellation Energy, the catalyst was the former's better second-quarter earnings. and an increase in guidance, the latter exceeding expectations for 2024.
When it comes to investing, retail camps often have no choice but to react to news, while hedge funds spend countless hours and millions of dollars picking the right stocks. Now that the first quarter of 2024 is coming to an end, let's take a look at what hedge funds said about her NVIDIA in the fourth quarter of 2023.
Excerpts from Pollen Capital's letter to investors from the same period are below.
NVIDIA stock slightly underperformed the Portfolio and Russell 1000 Growth in Q4, but has soared well over 200% in 2023. Generative AI has been a huge boon for his NVIDIA because using LLMs like ChatGPT requires a huge amount of processing power, but most of that processing power is now provided by his NVIDIA GPUs. Masu. All large cloud service providers, AI factories, and many large consumer internet companies are deploying NVIDIA GPUs and other parallel processing chips to support internal use (i.e., meta) or large-scale production AI. We are laying the foundation for generative AI. As a service for others (such as AI factories) or both (cloud service providers such as Amazon, Microsoft, and Google).
It's unclear how sustainable the current demand for GPUs actually is, given that many of NVIDIA's customers and their end customers are still experimenting with generative AI. At the same time, NVIDIA has historically been known to be highly cyclical. By the end of 2024, NVIDIA will already control about half of the data center chip, server, and network equipment market. This is unprecedented. A valuation of 25 times forward earnings doesn't seem too harsh at first glance, even though NVIDIA will effectively own the entire data center chip market over the next few years, and it's a cyclical business. We expect to maintain year-on-year growth. Now, a new, even higher peak is occurring.
With these details in mind, let's take a look at the stocks in the S&P 500 that analysts can't stop talking about. Stocks to watch include Newmont Corporation (NYSE:NEM), Warner Bros. Discovery, Inc. (NASDAQ:WBD), and Biogen, Inc. (NASDAQ:BIIB).
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our methodology
To create a list of S&P 500 stocks to buy, according to analysts, we ranked the stocks in the index by average price increase target and singled out the top stocks.
For these top S&P 500 stocks, we used hedge fund sentiment. The top 10 consensus stocks selected by hedge funds have outperformed the S&P 500 index by more than 140 percentage points over the past 10 years (Please see here for the detail). That's why we pay close attention to this often ignored metric.
Top 12 S&P 500 stocks to buy, chosen by analysts
12. Carnival Corporation & plc (NYSE:CCL)
Number of hedge fund shareholders in Q4 2023: 41
Analyst average price target: 21
Increase rate: 28.82%
Carnival Corporation & plc (NYSE:CCL) is a Carnival ship operating company headquartered in Miami, Florida. 2024 has been a dynamic year for the company. In addition to facing potential losses in the wake of the Baltimore bridge collapse, it's unclear whether Carnival Corporation & plc (NYSE:CCL) will be able to offer Red Sea cruises. to be in conflict.
As of the end of Q4 2023, 41 of the 933 hedge funds profiled by Insider Monkey were shareholders of Carnival Corporation &plc (NYSE:CCL). His Two Sigma Advisors of Josh Overdeck and David Siegel were the largest investors with $298 million in stock.
Newmont Corporation (NYSE:NEM), Warner Bros. Discovery Inc. (NASDAQ:WBD), and Biogen Inc. (NASDAQ:BIIB) are all S&P 500 stocks that are highly rated by analysts.
11. Aptiv PLC (NYSE:APTV)
Number of hedge fund shareholders in Q4 2023: 39
Analyst average price target: $104
Increase rate: 31.09%
Aptiv PLC (NYSE:APTV) is an Ireland-based automotive parts manufacturer that manufactures and sells electrical systems and other products. The company has exceeded analysts' EPS estimates in each of the last four quarters, and the stock is rated a Buy on average.
By the end of December 2023, 39 of the 933 hedge funds covered by Insider Monkey held shares in the company. Apptiv PLC (NYSE:APTV)'s largest hedge fund shareholder is Ian Sim's Impax Asset Management, with a stake worth $651 million.
10. Charter Communications, Inc. (NASDAQ:CHTR)
Number of hedge fund shareholders in Q4 2023: 69
Analyst average price target: $383
Increase rate: 31.79%
Charter Communications, Inc. (NASDAQ:CHTR) is a leading telecommunications company that sells broadband packages. The company's stock price fell by double digits in February after its latest earnings report showed a decline in customers and revenue.
In terms of stock holdings in the fourth quarter of 2023, 69 out of 933 hedge funds profiled by Insider Monkey purchased and owned shares of Charter Communications (NASDAQ:CHTR). Harris Associates of Natixis Global Asset Management became the largest investor through a $2 billion investment.
9. First Solar, Inc. (NASDAQ:FSLR)
Number of hedge fund shareholders in Q4 2023: 47
Analyst average price target: $223
Increase rate: 32.11%
First Solar, Inc. (NASDAQ:FSLR) is a green energy stock that manufactures and sells photovoltaic modules used in power generation systems. The fact that the company's stock price is up 32% is understandable considering the recent devastation of green energy stocks due to high interest rates that make it difficult to finance new projects.
As of the end of December 2023, 47 of the 933 hedge funds covered by Insider Monkey have invested in the company. First Solar, Inc. (NASDAQ:FSLR)'s largest hedge fund shareholder is Robert Pauley's Samlin Capital with a stake of $308 million.
8. Insight Corporation (NASDAQ:INCY)
Number of hedge fund shareholders in Q4 2023: 37
Analyst average price target: $75
Increase rate: 32.37%
Incyte Corporation (NASDAQ:INCY) is a mid-sized biotechnology company headquartered in Wilmington, Delaware. We develop treatments for cancer, blood disorders, and other diseases. The stock has an average rating of “buy” and an average price target of $75.41.
Insider Monkey investigated 933 hedge funds' portfolios for their stock holdings in the fourth quarter of 2023 and found 37 Incyte Corporation (NASDAQ:INCY) investors. Julian Baker and Felix Baker's Baker Brothers Advisors was the largest investor with $2.2 billion.
7. Zoetis Co., Ltd. (NYSE:ZTS)
Number of hedge fund shareholders in Q4 2023: 50
Analyst average price target: $226
Increase rate: 33.47%
Zoetis Inc. (NYSE:ZTS) is a specialty healthcare company whose products cover animal health. The company has been in the middle of a bit of trouble in Europe recently, facing allegations that it blocked a competitor from releasing a painkiller for dogs.
In the last quarter of 2023, 50 of the 933 hedge funds surveyed by Insider Monkey bought the company's stock. Zoetis Inc. (NYSE:ZTS)'s largest shareholder is William von Mueffling's Cantillon Capital Management, with an ownership stake worth $280 million.
6. Caesars Entertainment, Inc. (NASDAQ:CZR)
Number of hedge fund shareholders in Q4 2023: 65
Analyst average price target: $59
Increase rate: 35.21%
Caesars Entertainment, Inc. (NASDAQ:CZR) is one of the world's largest casino companies, with offices in more than 10 American states. March 2024 was a busy month for the company, including inviting Michelin-starred chefs to some of its locations and renewing its partnership with the NFL.
65 of the 933 hedge funds in Insider Monkey's Q4 2023 database invested in Caesars Entertainment (NASDAQ:CZR). Parag Vora's HG Vora Capital Management was the largest investor with $239 million.
Newmont Corporation (NYSE:NEM), Warner Bros. Discovery, Inc. (NASDAQ:WBD), and Biogen Inc. (NASDAQ:BIIB) are selected by top analysts for S&P 500 stocks.
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Disclosure. none. Top 12 S&P 500 stocks to buy, chosen by analysts Originally published on Insider Monkey.
