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In this article, we will be taking a look at the 11 best FAANG stocks to buy now. To skip our detailed analysis of these stocks and the technology sector, you can go directly to see the 5 Best FAANG Stocks to Buy Now.
In spite of the Fed jacking up interest rates, the technology sector is continuing to attract investor attention in 2022. With rampant inflation still plaguing the market, the sector was expected to suffer from a loss in popularity. However, its cheaper valuation in a time of economic recession is managing to work in its favor. According to a Bloomberg article published this September, The Nasdaq 100 Index was 35% cheaper than its peak in 2020. Some of the best FAANG stocks like Apple Inc. (NASDAQ:AAPL) still continued to rake in cash and maintain their earnings outlooks, inspiring confidence as far as investors were concerned.
What are FAANG stocks?
The acronym FAANG refers to the top five American technology companies in the market today: Facebook (now known as Meta Platforms, Inc. (NASDAQ:META)), Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), Netflix, Inc. (NASDAQ:NFLX), and Alphabet Inc. (NASDAQ:GOOG). With Netflix, Inc. (NASDAQ:NFLX) losing the favor of many investors with its performance this year, Microsoft Corporation (NASDAQ:MSFT) is steadily becoming a new member of this group of stocks.
Investors' approach to the markets this year has demonstrated that staying away from the best FAANG stocks like Amazon.com, Inc. (NASDAQ:AMZN) and Microsoft Corporation (NASDAQ:MSFT) is not an option. The sheer size of the tech industry alone makes it the largest of its kind in the S&P 500, making up almost 27% of the index. As a result, many investors are now being pulled towards durable businesses like the FAANG stocks.
According to a Reuters article published this July, Microsoft Corporation's (NASDAQ:MSFT) earnings results added to investor confidence in the tech sector, as they showed that the FAANG stocks were well-equipped to deal with a recession. Microsoft Corporation (NASDAQ:MSFT) rose by about 3.1% in July after the company mentioned it was targeting double-digit growth in fiscal revenue.
Let's now take a look at the 11 best FAANG stocks to buy now.
Our Methodology
We have selected renowned tech stocks that are comparable to the Big Tech companies. These stocks were popular among the 895 hedge funds tracked by Insider Monkey in the second quarter of 2022. They have also reported positive latest earnings and demonstrate growth potential based on projected EPS growth, revenue growth, and free cash flow growth, among other factors. We have ranked these stocks based on the number of hedge funds holding stakes in them, from the lowest to the highest. We have also mentioned analyst ratings and price targets for these stocks.
Best FAANG Stocks To Buy Now
11? International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 40
International Business Machines Corporation (NYSE:IBM) is an information technology company providing integrated solutions and services across the globe. The company offers hybrid cloud platform and software solutions, software for business automation, data and artificial intelligence solutions, and more. It is based in Armonk, New York.
An Overweight rating was reiterated on shares of International Business Machines Corporation (NYSE:IBM) on October 6, by analyst Erik Woodring at Morgan Stanley. The analyst also placed a $152 price target on the stock.
The company's revenue has grown by 27.28% year-over-year, and its EPS is expected to grow by 8.97% over the next three to five years. International Business Machines Corporation (NYSE:IBM) has a one-year dividend growth rate of 0.77% as well. Its EPS in the second quarter of 2022 was $2.31, beating estimates by $0.02. International Business Machines Corporation (NYSE:IBM) also brought in $15.54 billion in revenue, beating estimates by $359.15 million.
Citadel Investment Group was the largest stakeholder in International Business Machines Corporation (NYSE:IBM) in the second quarter, holding 2.9 million shares worth about $420.9 million. In total, 40 funds were long the stock, with a total stake value of $948 million.
International Business Machines Corporation (NYSE:IBM), like Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), and Microsoft Corporation (NASDAQ:MSFT), is one of the top tech stocks hedge funds are pouring into today.
10. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 65
Intel Corporation (NASDAQ:INTC) is a semiconductor company working to design, manufacture, and sell computer products and technologies across the globe. It offers platform products like central processing units and chipsets. It is based in Santa Clara, California.
Ross Seymore at Deutsche Bank has a Hold rating on Intel Corporation (NASDAQ:INTC) shares as of September 8. The analyst also placed a $35 price target on the stock.
Intel Corporation (NASDAQ:INTC) has a forward dividend per share growth rate of 4.21%, and a one-year dividend growth rate of 5.17%. The company has been investing large sums in research and development, manufacturing, and packaging technologies, a move that will benefit it in the long run. This March, Intel Corporation (NASDAQ:INTC) announced plans to invest $85 billion in the above areas.
In total, there were 65 hedge funds long Intel Corporation (NASDAQ:INTC) in the second quarter. Their total stake value was $2.5 billion.
9. QUALCOMM, Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 71
QUALCOMM, Incorporated (NASDAQ:QCOM) is a semiconductor company working to develop and commercialize foundational technologies for the wireless industry worldwide. The company operates through its Qualcomm CDMA Technologies (QCT), Qualcomm Technology Licensing (QTL), and Qualcomm Strategic Initiatives (QSI) segments. It is based in San Diego, California.
On September 26, Samik Chatterjee at JPMorgan reiterated an Overweight rating on shares of QUALCOMM, Incorporated (NASDAQ:QCOM). The analyst also placed a $185 price target on the stock.
QUALCOMM, Incorporated's (NASDAQ:QCOM) EPS is expected to grow by 23.02% over the next three to five years. The company's revenue has grown by 29.36% year-over-year, and its forward free cash flow per share growth rate is 50.65%. QUALCOMM, Incorporated (NASDAQ:QCOM) also has a one-year dividend growth rate of 6.08%. Analyst Chatterjee sees a substantial upside in the stock in light of the stock's current valuation.
QUALCOMM, Incorporated (NASDAQ:QCOM) was found among the 13F holdings of 71 hedge funds in the second quarter, and 73 funds in the previous quarter. Their total stake values were $2.8 billion and $3.6 billion, respectively.
8. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 84
NVIDIA Corporation (NASDAQ:NVDA) is another semiconductor company providing graphics, compute, and networking solutions in the US, Taiwan, China, and internationally. It offers game streaming services and related infrastructure, solutions for gaming platforms, and automotive platforms for infotainment systems. It is based in Santa Clara, California.
Joseph Moore at Morgan Stanley holds an Equal Weight rating on shares of NVIDIA Corporation (NASDAQ:NVDA) as of September 21. The analyst also maintains a $182 price target on the stock. Moore believes NVIDIA Corporation (NASDAQ:NVDA) will benefit in the near future, since gaming revenues are set to recover in 2023, seeing how prices in the sector are 28% higher than the baseline price from two year ago. NVIDIA Corporation (NASDAQ:NVDA) had revenue of $6.7 billion in the fiscal second quarter of 2023, beating estimates by $3.47 million.
There were 84 hedge funds long NVIDIA Corporation (NASDAQ:NVDA) in the second quarter, with a total stake value of $3.3 billion. Of these funds, Citadel Investment Group was the largest stakeholder in the company, holding 17.7 million shares worth $2.7 billion.
7. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 87
Advanced Micro Devices, Inc. (NASDAQ:AMD) is another information technology company operating in the semiconductor industry. The company offers chipsets, discrete and integrated graphics processing units (GPUs), data center and professional GPUs, and development services, among more. It is based in Santa Clara, California.
An Overweight rating was maintained on shares of Advanced Micro Devices, Inc. (NASDAQ:AMD) on October 5, placed by analyst Aaron Rakers at Wells Fargo. The analyst also placed a $90 price target on the stock.
Advanced Micro Devices, Inc.'s (NASDAQ:AMD) working capital growth year-over-year stands at a rate of 61.17%. The company's EPS is expected to grow by 30.95% over the next three to five years, and its revenue has grown by 61.74% year-over-year. This October, Advanced Micro Devices, Inc. (NASDAQ:AMD) also led chip stocks higher for the third straight day of gains this month.
Out of 895 funds, 87 funds were long Advanced Micro Devices, Inc. (NASDAQ:AMD) in the second quarter, with a total stake value of $4.8 billion. In comparison, 83 funds were long the stock in the previous quarter, with a total stake value of $6.9 billion.
6. Alibaba Group Holding Limited (NYSE:BABA)
Number of Hedge Fund Holders: 106
Alibaba Group Holding Limited (NYSE:BABA) is an internet and direct marketing retail company operating in the consumer discretionary sector. The company provides technology infrastructure and marketing reach to help merchants, retailers, and businesses to engage with their consumer bases in China and internationally. It is based in Hangzhou, China.
On October 3, Jiong Shao at Barclays kept an Overweight rating on Alibaba Group Holding Limited (NYSE:BABA) shares, while placing a $135 price target on the stock.
This October, Alibaba Group Holding Limited (NYSE:BABA) led Chinese tech stocks in the broader market, rising 4.6% on October 4. The company's revenue has grown by 10.87% year-over-year, and its EPS is expected to grow by 1.74% over the next three to five years. In the fiscal first quarter of 2023, Alibaba Group Holding Limited (NYSE:BABA) had an EPS of $1.74, beating estimates by $0.18, while its $30.46 billion revenue also beat estimates by $296.3 million.
Alibaba Group Holding Limited (NYSE:BABA) had 106 hedge funds long its stock in the second quarter, with a total stake value of $7.4 billion. Fisher Asset Management was the largest stakeholder in the company, holding 14.5 million shares worth $1.6 billion.
Distillate Capital Partners LLC, an investment management firm, mentioned Alibaba Group Holding Limited (NYSE:BABA) in its second quarter 2022 investor letter. Here's what the company said:
“Changes & Regional Weights: The largest new position is Alibaba Group Holding Limited (NYSE:BABA), which underperformed considerably and has seen its enterprise value fall by almost two thirds from its peak despite a net cash position on its balance sheet.”
Alibaba Group Holding Limited (NYSE:BABA), like Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), and Microsoft Corporation (NASDAQ:MSFT), has been on the rise in the tech sector for many year, attracting positive investor attention.
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Disclosure: None. 11 Best FAANG Stocks to Buy Now is originally published on Insider Monkey.
