Top 3 Stocks Institutions Are Buying Right Now

Key Points

• Despite the stock market trading at new all-time highs, institutions still find enough reason to buy more enormous stakes in three stocks.
• Backed by Wall Street analysts and their price targets, fundamental tailwinds help justify these stocks' potential upside into the future today.
• The price action offers enough momentum and discounts relative to where these stocks could be trading today.

Despite the S&P 500 trading near its all-time high today, some stocks still offer a potential buy opportunity for investors to consider, especially after some institutions have come along to buy and increase some of their positions in these stocks today to reiterate their long bias and optimism in these companies moving forward.

Also backed by some of the fundamental trends gaining momentum today, today’s list of buy targets from institutions makes for attractive options for retail investors to consider buying before the year ends. Wall Street analysts seem to agree with these institutions about how much upside potential can be had in these stocks today, with enough momentum and price action gaps to solidify new runs in them.

This list includes names like Hims & Hers Health Inc. NYSE: HIMS, which combines the stability of the healthcare sector with the growth of technology stocks for investors. A new run for overseas stocks could renew the recent rallies in shares of Alibaba Group NYSE: BABA to deliver a double-digit upside. Finally, a dip-buying opportunity could be had in ASML Holding NASDAQ: ASML after an earnings flop brought the stock down to attractive levels today.

Could Upgrades in Hims & Hers Stock Trigger a Short Squeeze?

As of today, Hims & Hers stock has up to 18.3% of its float held in short positions, which lies on the upper end of the spectrum that could trigger a short squeeze. This happens when a stock experiences a sharp rally that forces short sellers to close their positions, adding additional buying pressure to the existing rally.

This rally could come from the new “Buy” rating from Bank of America analysts, where they now see a price target of up to $25 a share, implying a rally of as much as 15.2% from where the stock trades today. Fundamentally, here’s where the company aligns with today’s economic environment.

With inflation pressures on the rise again, as Stanley Druckenmiller and Paul Tudor Jones warned of potentially higher inflation in the coming quarters for the United States, businesses like Hims & Hers could shine. As a technology company, Hims & Hers financials report up to 82.2% gross margins today.

This high profitability allows the company to scale and outpace inflation, placing it above its peers in the space. These reasons led the Healthcare of Ontario Pension Plan Trust Fund to boost its stakes in Hims & Hers stock by 164% as of September 2024, a net position of $10.7 million today, to showcase new interest from buyers coming into the stock.

Inflation Pressures Could Re-Ignite a Rally in Alibaba Stock

After reaching a new 52-week high, shares of Alibaba retraced down to only 83% of their marked high for the year, but that doesn’t mean there can’t be a new rally to bring those gains back to the stock. If these inflation pressures do end up making their way into the economy, overseas stocks will benefit directly.

The risk-to-reward scale is now favoring the bulls for Alibaba, considering that the Chinese economy is now at one of its low cycles, which might turn around in the coming quarters on the back of new stimulus measures making their way into different sectors. Wall Street analysts and institutions agree with this potential trend through new outlooks.

Leading the wave of institutional buying were those at Assenagon Asset Management, which boosted its investments in Alibaba stock by as much as 1,392% as of October 2024 to net its positions at a high of $650 million today. Adding to the bullish sentiment lately, investors can also gauge Wall Street’s view on the stock.

Those at Macquarie recently upgraded Alibaba stock to an “Outperform” rating from a previous “Neutral,” a new view with a price target of up to $145 a share. To prove these analysts right, Alibaba would need to rally by as much as 48.9% from where it trades today, not to mention a new 52-week high.

ASML Stock: Is It a Dip Buy as Fears in the Semiconductor Industry Fade?

After a quarterly earnings flop, shares of ASML declined by as much as 16% in a single day; investors might consider this stock a potential dip buy. However, this consideration could only be taken seriously under the right circumstances, which include the results and behaviors of comparable companies in the semiconductor industry.

Some of these trends can be confirmed when investors gauge the price action in Taiwan Semiconductor Manufacturing Co. NYSE: TSM, whose shares rallied by over 15% in a single day on stronger-than-expected earnings. Considering that Nvidia Co. NASDAQ: NVDA is one of Taiwan Semiconductor’s biggest customers, that’s another leg of demand and strength investors can consider.

With the odds looking better for ASML stock’s future, the potential for it to be a dip-buy opportunity today increases as well. Institutional investors from International Assets Investment Management decided to boost their stakes in ASML stock up to $4.1 billion as recently as October 2024.