In this piece, we will take a look at the 13 hot stocks to invest in according to Wall Street analysts. If you want to skip our overview of the stock market and the latest news, then you can skip ahead to the 5 Hot Stocks to Invest in According to Wall Street Analysts.
Just like in 2023 and 2022, the stock market of 2024 is focused on the Federal Reserve. Now that investors are finished with the euphoria surrounding artificial intelligence stocks, and are happy with NVIDIA Corporation (NASDAQ:NVDA)'s latest supply and pricing details for the Blackwell artificial intelligence processors, they can now turn their focus back on what the Fed might or might not do later this year.
This macro trend can very well decide which stocks are hot or not. This is because high interest rates mean that high growth firms find it difficult to raise capital and the opportunity costs for investors to pile their money into speculative investments also go up. One of the strongest examples of this trend is stocks in the clean energy sector. Before the coronavirus pandemic, clean energy was one of the hottest sectors in the world with investors rushing in hand over fist. However, now that interest rates are high, clean energy stocks are in a bear market if we consider the 12-month performance of the S&P Global Clean Energy Index. The index of clean energy stocks is down by nearly 27% over the past twelve months, and it is one of the strongest examples of potentially hot stocks if the Federal Reserve changes its course of action on interest rates.
So much so that investors have discovered that by betting on clean energy stocks, they can end up 'playing' the Federal Reserve's interest rate decisions. What this means is that if markets decide that the Fed will cut interest rates, then stocks such as those in the clean energy sector will see their prices appreciate on the back of bullish bets such as easy money being available for financing pricey projects such as wind power plants and solar farms.
For hot stocks, which are typically seeing higher trading volume and volatility than other stocks, a timely investment decision can yield benefits. In fact, we don't have to look too far to see how this has played out on the market. One of the hottest stocks of 2023 has been NVIDIA Corporation (NASDAQ:NVDA), the Santa Clara, California based semiconductor designer whose graphics processing unit (GPU) chips are at the forefront of the global shift to advanced data analysis and computing techniques collectively dubbed as artificial intelligence.
NVIDIA's shares are up by a stunning 627% since the last bottom of the semiconductor industry in the third quarter of 2022. Back then, the stock was trading for $120, meaning that the current trading price of $907 is beyond what most NVIDIA investors might have imagined would have been possible with their shares. Yet, even though NVIDIA's triple digit percentage share price appreciation does make it one of the hottest stocks of the past year or so, there are countless other examples of equities making similar jumps but in small time periods.
Two recent examples of such hot stocks are Ocean Biomedical, Inc. (NASDAQ:OCEA) and Elevation Oncology, Inc. (NASDAQ:ELEV). These are penny stocks that trade for roughly the same price ($4.34 - $4.64), and the stocks are up by 648% and 588% respectively, year to date. Unsurprisingly perhaps, both belong to the biotechnology sector, which is another area of the stock market that is highly sensitive to interest rates. The former is a biotechnology firm founded by professors from the illustrious Brown University, and the stock is up by 163% since Ocean Biomedical, Inc. (NASDAQ:OCEA) announced that its joint venture firm had made progress related to a Hepatitis B treatment. This treatment is particularly special, as according to the firm, it is the first human data from a genetically modified T-Cell vaccine.
The second hot stock, Elevation Oncology, Inc. (NASDAQ:ELEV), has also beaten NVIDIA's share price appreciation over the past year and a half, year to date in 2024. Elevation's shares popped in February end when it announced that its treatment that stops tumors from turning into cancer will now also include Japanese patients in its sample.
With these details in mind, let's take a look at what hot stocks are also finding favor among analysts. A couple of notable picks are Arch Capital Group Ltd. (NASDAQ:ACGL), Uber Technologies, Inc. (NYSE:UBER), and Juniper Networks, Inc. (NYSE:JNPR).
13 Hot Stocks to Invest in According to Wall Street Analysts
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Our Methodology
To make our list of the top hot stocks according to analysts, we ranked the 30 best performing stocks of the S&P 500 year to date by their average analyst share price target percentage upside.
For these best hot stocks according to analysts, we used hedge fund sentiment. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
13 Hot Stocks to Invest in According to Wall Street Analysts
The Progressive Corporation (NYSE:PGR) is a sizeable insurance firm headquartered in Mayfield, Ohio. The fact that it's a hot stock right now is unsurprising given that the fourth quarter results marked a whopping 141% net income growth to $2 billion.
During last year's fourth quarter, 79 out of the 933 hedge funds part of Insider Monkey's database had bought a stake in The Progressive Corporation (NYSE:PGR). Andreas Halvorsen's Viking Global was the firm's biggest hedge fund shareholder due to its $933 million stake.
The Progressive Corporation (NYSE:PGR)joins Uber Technologies, Inc. (NYSE:UBER), Arch Capital Group Ltd. (NASDAQ:ACGL), and Juniper Networks, Inc. (NYSE:JNPR) in our list of the best hot stocks according to analysts.
Targa Resources Corp. (NYSE:TRGP) is a small oil and gas transportation and storage firm headquartered in Houston, Texas. Despite the fact that the firm has missed analyst EPS estimates in three out of its four latest quarters, the shares are rated Strong Buy on average.
As of December 2023 end, 32 out of the 933 hedge funds part of Insider Monkey's survey had owned the firm's shares. Targa Resources Corp. (NYSE:TRGP)'s largest investor among these is Stuart J. Zimmer's Zimmer Partners through its $224 million investment.
The Kroger Co. (NYSE:KR) is an American grocery retailer headquartered in Cincinnati, Ohio. With high rates and inflation making the business environment difficult, the firm made a crucial announcement in March 2024 when it shared that it would sell its specialty pharmaceutical business for an undisclosed price tag.
After digging through 933 Q4 2023 hedge fund portfolios, Insider Monkey found 45 The Kroger Co. (NYSE:KR) hedge fund shareholders. Out of these, the biggest shareholder is Warren Buffett's Berkshire Hathaway due to its $2.2 billion stake.
Howmet Aerospace Inc. (NYSE:HWM) is a global aerospace parts provider that caters to the needs of airplanes. Despite its size, it's a highly rated hot stock, with the average analyst share rating being Strong Buy.
Insider Monkey's fourth quarter of 2023 survey covering 933 hedge funds revealed that 43 had invested in the firm. Howmet Aerospace Inc. (NYSE:HWM)'s largest hedge fund investor is William B. Gray's Orbis Investment Management as it owns $348 million worth of shares.
Diamondback Energy, Inc. (NASDAQ:FANG) is a small American oil and gas exploration and production firm targeting the hot oil fields of the Permian Basin. February 2024 was a great month for the stock as not only did it set a new 52 week high, but analysts from KeyCorp also raised the share price target to $186 from $170 and assigned an overweight rating to the shares.
For their December quarter of 2023 shareholdings, 42 out of the 933 hedge funds part of Insider Monkey's database had bought and owned Diamondback Energy, Inc. (NASDAQ:FANG)'s shares. Ric Dillon's Diamond Hill Capital was the biggest investor through its $ 248 million stake.
Catalent, Inc. (NYSE:CTLT) is a diversified pharmaceutical firm with a presence in the traditional and biotechnology markets. The shares are rated Buy on average, and the average analyst share price target is $57.32.
During last year's fourth quarter, 28 out of the 933 hedge funds tracked by Insider Monkey were the firm's shareholders. Catalent, Inc. (NYSE:CTLT)'s largest hedge fund stakeholder is Eric Bannasch's Cadian Capital as it owns 6 million shares that are worth $272 million.
Tapestry, Inc. (NYSE:TPR) is a fashion company that sells handbags, scarves, gloves, and other similar items. The firm's latest quarterly results unveiled in February 2024 made it a hot stock after shares jumped in the wake of a potential recovery in China.
For their December quarter of 2023 shareholdings, 40 out of the 933 hedge funds part of Insider Monkey's database had bought and owned Tapestry, Inc. (NYSE:TPR)'s shares. Ken Griffin's Citadel Investment Group was the biggest shareholder as it owned a $147 million stake.
Eli Lilly and Company (NYSE:LLY) is an unmistakable addition to a list of the best hot stocks since its weight loss drug Mounjaro. Despite the fact that the stock is on its way to potentially becoming a rare non tech trillion dollar firm, the shares are rated Buy on average with an average share price target of $801.75.
102 out of the 933 hedge funds part of Insider Monkey's Q4 2023 database were Eli Lilly and Company (NYSE:LLY)'s investors. Ken Fisher's Fisher Asset Management owned the biggest stake which was worth $2.6 billion.
Eli Lilly and Company (NYSE:LLY), Arch Capital Group Ltd. (NASDAQ:ACGL), Uber Technologies, Inc. (NYSE:UBER), and Juniper Networks, Inc. (NYSE:JNPR) are some best hot stocks to buy according to analysts.
