We recently compiled a list of 8 Most Active US Stocks To Buy Now. In this article, we will look at where Intel Corp. (NASDAQ:INTC) ranks among the most active US stocks to buy now.
Market Will Likely Remain Resilient
Amid economic uncertainty and upcoming elections, analysts are adopting a cautious stance due to market volatility driven by mixed investor sentiments. It’s being noted that while the Fed’s easing cycle could yield positive market outcomes in the coming months, immediate stock performance remains uncertain as many investors prefer to wait until after the elections to commit capital.
Vance Howard, CEO of Howard Capital Management, is of a similar view, as he is predicting a significant rate cut in early 2025 due to declining inflation. He emphasized that markets typically rise following initial rate cuts and advised investors to remain optimistic despite current market fluctuations. Howard recommended focusing on resilient sectors like utilities, real estate, and technology, while also considering financials as likely beneficiaries of future rate cuts as we approach 2025. We actually covered his opinion in more detail in our 8 Best Inexpensive Stocks To Invest In Now article, here’s an excerpt from it:
“Howard pointed out that historically, after the first rate cut, markets tend to rise, with a perfect record of being higher 7 out of 7 times following such cuts. He also noted that if the S&P 500 has already gained 10% in the first half of the year, there is an 83% chance of continued upward movement in the second half. Therefore, he advised investors to remain optimistic and not be overly distracted by current market noise.”
Liz Young Thomas, SoFi head of investment strategy, joined ‘Squawk Box’ at CNBC on September 30 and shared her insights regarding the market’s trajectory as it approaches an easing cycle. She acknowledged that while there has been a significant run-up leading to this cycle, much of the substantial gains may have already been realized.
However, she noted that this does not necessarily mean the market will slow down immediately. Historically, after the first rate cut, markets tend to remain flat or slightly up in the following 30 to 60 days. 3 months post-cut, the market evaluates whether these cuts were necessary due to cooling economic conditions or if they were merely opportunistic adjustments.
Young highlighted several positive factors contributing to the current market rally. Despite a slight pullback in technology stocks, she observed that many other stocks are performing well, with 80% of the S&P 500 trading above their 200-day moving averages. This indicates a strong internal market dynamic. Additionally, optimism surrounding potential stimulus measures from China adds further support to market sentiment.
When discussing valuation concerns, Young agreed that while US market multiples are relatively high, hovering around 21 to 22, this is not unprecedented when compared to historical standards. She pointed out that current valuations are above both the 5-year and 10-year averages but not at overbought levels. Young referenced Warren Buffett’s long-term investment philosophy, emphasizing that he does not focus on timing market multiples but rather on fundamental growth.
Young expressed a desire for the market to shift towards trading based on fundamentals rather than multiple expansions. She noted that while earnings stability is crucial, there are signs of strength in sectors outside of technology, particularly in industrial stocks. However, financials have shown mixed signals.
As for identifying sectors with potential for faster earnings growth, Young emphasized the importance of thorough research and analysis rather than relying solely on top-down market movements. She identified healthcare, especially biotech and pharmaceuticals, as a promising area for growth. Healthcare tends to perform well in environments characterized by a steepening yield curve, which has been observed recently.
Moreover, she cautioned against assuming certainty in market outcomes. With prevailing confidence in a soft landing scenario from both the market and the Fed, she advised investors to remain vigilant and consider protective strategies. She suggested exploring opportunities across the Treasury curve, particularly in shorter-duration bonds, as a hedge against potential faster-than-expected rate cuts by the Fed.
Young’s insights propose that by focusing on sectors with strong fundamentals and remaining adaptable to changing conditions, investors can position themselves for potential gains while being mindful of risks associated with high valuations and economic uncertainties. With that said, we’re here with a list of the 8 most active US stocks to buy now.
Methodology
We sifted through Yahoo Finance’s list of the most active US stocks that are experiencing high trading volumes. We looked at the top 15 US stocks to find the ones that were the most popular among elite hedge funds. We then narrowed down our list to the 10 stocks with high trading volumes and those that were the most popular among hedge funds. The stocks are ranked in ascending order of their trading volumes, as of September 30.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Intel Corp. (NASDAQ:INTC)
Volume: 85.883 million
Average Volume (3-Month): 83.601 million
Number of Hedge Fund Holders: 75
Intel Corp. (NASDAQ:INTC) designs, manufactures, and sells computer components and related products for business and consumer markets, best known for its microprocessors. It includes a range of processors for various applications, including personal computers, servers, and data centers, making it a major player in the semiconductor industry, with a strong presence in the global technology market.
The company experienced a 0.9% decline in revenue, as compared to the year-ago period. High inventory levels, at 137 days compared to the industry average of 90 days, remain a significant challenge. However, Intel Corp. (NASDAQ:INTC) has recently secured significant government funding through the CHIPS and Science Act.
Reports regarding a potential Qualcomm-Intel merger surfaced on September 28, following coverage by the WSJ, later confirmed by CNBC, leading to an initial rise in Intel Corp.’s (NASDAQ:INTC) share price by ~3%. However, Wells Fargo assessed the likelihood of such a deal as low due to regulatory challenges, particularly in China, alongside internal resistance from management.
The company’s new Xeon 6 processors, launched in Q2, offer improved performance and AI acceleration for enterprise AI systems. AI PCs are poised to dominate the market, with projections suggesting they will account for over half of all PC sales by 2026. Intel Corp.’s (NASDAQ:INTC) upcoming Panther Lake CPU, built on the 18A process, is expected to significantly boost performance and profitability. Its focus on cost reduction and innovation positions it well for future growth, despite recent challenges.
Columbia Threadneedle Global Technology Growth Strategy stated the following regarding Intel Corporation (NASDAQ:INTC) in its Q2 2024 investor letter:
“Intel Corporation (NASDAQ:INTC) stumbled, and shares retreated as the company continued to struggle to right the ship as part of its shift in strategy. The company reported a weak quarter, with most results coming in below expectations, especially margins. The company did outline accelerating revenue growth in the second half of the year based off stable PC demand, the ramp up of its AI product and the recovery of end markets off of cyclical lows.”
Overall INTC ranks 2nd on our list of most active US stocks to buy now. While we acknowledge the growth potential of INTC, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than INTC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure: None. This article is originally published on Insider Monkey.