In the dynamic world of investing, there’s always a buzz surrounding “smart money” stocks. This excitement isn’t just about fleeting market trends; it’s rooted in the savvy market decisions made by individuals with incredible financial acumen. While the current market headwinds might tempt many to adopt a more defensive approach, picking up smart money stocks could be a more appropriate strategy.
Hedge funds, particularly the most successful ones, have long been the gold standard in smart investing. Their choices, often backed by insider knowledge, meticulous research, and years of industry experience, set them apart. Thus, as we delve deeper, let’s uncover the allure of these seven smart money stocks and understand what makes them tick.
Smart Money Stocks: Microsoft (MSFT)
The Microsoft logo outside a building representing MSFT stock.
Source: Asif Islam / Shutterstock.com
Total Institutional Investor Holdings: 5.26 billion shares
% of Institutional Ownership: 70.8%
Tech tian, Microsoft (NASDAQ:MSFT) caught a huge break after regulators in the U.K. green-lit its monumental $68 billion acquisition of gaming titan Activision Blizzard (NASDAQ:ATVI). This pivotal move is set to finally dissolve clouds of uncertainty, allowing Microsoft to bolster its video gaming division significantly. With it being a proud owner of renowned franchises such as “Call of Duty” and “World of Warcraft” and other exclusive gaming sagas, it’s likely to inject unprecedented vitality into Microsoft’s Xbox gaming division.
Simultaneously, Microsoft’s robust foray into artificial intelligence (AI), marked by a $10 billion infusion into OpenAI, the brain behind ChatGPT, has added new layers to its growth story. Seamlessly integrating generative AI into Bing and other diverse applications, it showcases a harmonious blend of technology across different realms, including cloud storage to video games. Given these strides, it’s no surprise that MSFT stock enjoys a robust double-digit uptick year-to-date (YTD), reflecting the flourishing trajectory of this tech behemoth.
GSK (GSK)
A GlaxoSmithKline (GSK) office in London.
Source: Willy Barton / Shutterstock.com
Total Institutional Investor Holdings: 278.4 thousand shares
% of Institutional Ownership: 13.6%
Renowned pharmaceutical titan GSK (NYSE:GSK) continues to make waves in the sector with its promising product pipeline. Research heavyweight GlobalData forecasts a whopping $2.5 billion in sales from GSK’s Arexvy vaccine targeting the RSV virus from the current year through to 2029. Moreover, affirming earlier projections, the U.S. FDA recently stamped its approval on Jemperli, GSK’s cancer treatment, for advanced endometrial cancer cases.
Interestingly, while the stock appears undervalued, trading at just two times forward sales estimates, it paints a picture of a powerful financial fortress. GSK’s second quarter report card beams with a revenue hike of 4% and an 11% jump in profits. The crescendo in its vaccine business, especially the 20% year-on-year (YOY) surge for shingles vaccines, generating a cool $1.7 billion in the first half of the year, fortifies its optimism.
Apple (AAPL)
Apple store. Apple Inc. (AAPL) sells consumer electronics, computer software, services and personal computers.
Source: Vytautas Kielaitis / Shutterstock.com
Total Institutional Investor Holdings: 9.38 billion shares
% of Institutional Ownership: 60%
Apple (NASDAQ:AAPL) is basking in the spotlight following the debut of its highly anticipated iPhone 15. Early reviews are encouraging, painting a promising canvas of robust sales, even in China, where apprehensions had loomed over potential governmental bans. Moreover, Investment mogul JP Morgan highlights a staggering 50-day average fulfillment time for the iPhone 15 Pro Max orders globally. Additionally, Wedbush analysts unveiled a 10% sales surge for iPhone 15 over its predecessor, the iPhone 14, in its initial weeks.
Apple’s innovation train doesn’t stop there, though, as its horizon gleams with the 2024 introduction of the Vision Pro augmented reality headset. Priced at a premium of $3,500, early reviews hint at another feather in its cap. As the first trailblazing consumer product in over a decade, the Vision Pro is generating palpable excitement. Also, with AAPL stock soaring more than YTD, the tech behemoth is poised for even loftier pinnacles in the financial realm.
Medtronic (MDT)
Medtronic (MDT) sign outside office building representing healthcare stocks
Source: JHVEPhoto / Shutterstock.com
Total Institutional Investor Holdings: 1.09 billion shares
% of Institutional Ownership: 81.9%
Renowned for its cardiology innovations, Medtronic (NYSE:MDT) has evolved into a medical juggernaut, boasting a diverse portfolio addressing ailments from diabetes to neurology. Moreover, the firm has paid a dividend for the past 44 consecutive quarters, amplifying dividends at a robust average of 10% annually over the past decade.
Recent trends only polish Medtronic’s sterling reputation. With a surging demand for its heart and gastrointestinal devices, the reported second quarter results surpassed market expectations. Consequently, its full-year profit forecast for 2023 was nudged upward, now ranging between $5.08 and $5.16 a share from previous estimates of $5 to $5.10.
As we gaze into the industry’s crystal ball, the horizon seems ripe with promise. Market pundits estimate that by 2030, the global medical device domain, where Medtronic is a key player, could touch a staggering revenue pinnacle of nearly $1 trillion.
Amazon (AMZN)
Closeup of the Amazon logo at Amazon campus in Palo Alto, California. The Palo Alto location hosts A9 Search, Amazon Web Services, and Amazon Game Studios teams. AMZN stock
Source: Tada Images / Shutterstock.com
Total Institutional Investor Holdings: 6.11 billion shares
% of Institutional Ownership: 59.2%
Navigating the eCommerce sphere, Amazon (NASDAQ:AMZN) continues its meteoric ascent. The titan’s stellar integration of AI, from curating product recommendations to streamlining logistics, has fueled over a 50% surge in its stock price this year. Beyond its core commerce functionalities, Amazon’s revenue streams burgeon with its robust Amazon Web Services. Additionally, the icing on the cake is a jaw-dropping $10.7 billion revenue influx from its burgeoning advertising realm in its most recent quarter.
Furthermore, with foundational e-commerce and cloud ventures steering a steady course, Amazon is now moving full steam ahead into AI. The tech behemoth recently made waves with its announcement of injecting up to $4 billion into AI trailblazer Anthropic. Competing head-to-head with OpenAI, Anthropic finds Amazon anchoring a minority stake. This symbiotic alliance promises Amazon’s cloud patrons a novel AI experience through its “Bedrock” business platform, potentially adding new layers to AMZN’s growth story.
Palantir Technologies (PLTR)
Palantir Technologies (PLTR) logo seen on billboard, known as Palantir is a public American company that specializes in big data analytics.
Source: Poetra.RH / Shutterstock.com
Total Institutional Investor Holdings: 747.7 million shares
% of Institutional Ownership: 36.5%
Charting an impressive trajectory, Palantir Technologies (NASDAQ:PLTR) has soared with a staggering 145% YTD return. This ascension isn’t just linked to its impressive numbers but echoes the company’s forward-thinking ventures, underscored by its recent alliance with Babcock International Group. This partnership aims to reshape data management in healthcare, showcasing Palantir’s drive to innovate consistently.
Additionally, selling bespoke data analytics tools, Palantir empowers firms to scrutinize data intricacies and make informed choices. Its clientele? The U.S. government sits at the apex, tapping into Palantir’s expertise for a myriad of endeavors, from health monitoring of diplomats to enhancing combat communication.
Ultimately Palantir sparkles financially, with it delivering second quarter revenue of $533.3 million, marking a 12.7% leap YOY, while its net income ballooned over 100%, reaching $28.1 million. Furthermore, Palantir’s third quarter revenue forecast nudges the bar higher, projecting figures between $553 million and $557 million. To encapsulate, in the fast-evolving realm of AI, Palantir stands tall, making it a prudent choice for those seeking a robust upside ahead.
Salesforce (CRM)
lose up of Salesforce (CRM) logo displayed on one of their towers in downtown San Francisco. Salesforce layoffs
Source: Sundry Photography / Shutterstock.com
Total Institutional Investor Holdings: 767.7 million shares
% of Institutional Ownership: 78.9%
In the volatile world of tech stocks, Salesforce (NYSE:CRM) remains a beacon of resilience and innovation. Its recent restructuring blueprint has resulted in strong operational results. It posted a non-GAAP operating margin of 31.6% in the second quarter, showcasing a robust 10% growth YOY. Although external economic factors may temporarily weigh down its stock, its strength and dominance in the customer relationship management sector showcase that any dip is a fleeting opportunity for keen investors.
Moreover, harnessing the AI wave, Salesforce’s Data Cloud has proven to be instrumental, ingesting a whopping six trillion records in the second quarter. This not only fortifies its AI strategy but empowers clients with unparalleled AI-driven insights. Additionally, the company’s diverse product suite, ranging from Sales Cloud to Commerce Cloud integrated seamlessly, continues to elevate user experiences.
Highlighting its credibility, an astounding 90% of Fortune 500 companies entrust Salesforce, leveraging its myriad offerings to optimize operations. In essence, for investors eyeing a blend of stability and growth, Salesforce emerges as a compelling choice.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.
