Many stocks have seen massive rallies this year as investors turned bullish on sectors like Big Tech, biotech, electric vehicles, and weight loss drugs. As the year-end nears, CNBC Pro asked three fund managers for sectors — and stocks — they are bullish on in the lead-up to 2024. Here are five of their top picks. Nvidia The U.S. chipmaking giant has gotten a lot of love from investors this year, with shares up close to 230% year-to-date. But for portfolio manager Karen Kharmandarian, it remains a top pick. “Everybody likes or mentions the stock, but, I think it remains an attractive investment proposition for 2024,” the senior portfolio manager at Thematics Asset Management said. Some concerns on Nvidia emerged last week following comments from its chief financial officer Colette Kress on the impact of the export restrictions on sales, especially to China. Its stock fell on the news, and ended last week down 2.12%. The chipmaker has been feeling the pressure after the U.S. government curbed the export of artificial intelligence chips to China over concerns that they could be used for military development purposes. This restricts the export of Nvidia’s A800 and H800 chips, among others. However, analysts continue to back the stock. According to FactSet data, 51 out of 54 analysts covering Nvidia have a buy or overweight rating on the stock at an average target price of $667.43 – giving it over 40% upside potential. Snowflake Elsewhere in the tech sector, Kharmandarian is looking favorably at cloud computing Snowflake , which he sees as having “good prospects for 2024.” The stock accounted for 3.3% of his AI and Robotics Fund as of Sept. 30. Warren Buffett is also a fan, with 0.3% of the Berkshire Hathaway portfolio invested in the stock. Shares in Snowflake rose 7.7% on Thursday last week after it posted third-quarter adjusted earnings of 25 cents per share on revenue of $734 million, surpassing analysts’ expectations. Year-to-date, the cloud stock is trading up around 37%. FactSet data shows that 70% of the 43 analysts covering Snowflake have buy or overweight ratings on the stock. BE Semiconductor Industries Meanwhile, Rahul Ghosh, equity portfolio specialist at T. Rowe Price, is bullish on the semiconductor sector and named Dutch company BE Semiconductor Industries as a favorite. He said AI remains a strong theme and he’s most bullish on the semiconductor aspect of it. “The demand is very strong for companies like BE Semiconductor,” he Ghosh. “AI is essentially improving productivity so much that the development of more large language models and the eventual application software is going to require significantly more intensity, unlike [in] the past decade.” He said that packaging solutions companies like BE Semiconductor were being underappreciated in the semiconductor value chain. Year-to-date, shares in the company are up over 120%. Of the 19 analysts covering the stock, nine give it a buy or overweight rating with an average price target of $120.88, indicating a fall of around 7% from current prices, according to FactSet. Danaher Corp In the healthcare sector, Ghosh is bullish on Danaher . Year-to-date shares in the biotechnology and life sciences equipment manufacturer are down nearly 4%, but Ghosh remains positive. “People just underappreciate the scale of the opportunity with Danaher, I think you’re getting a good chance to enter ahead of a potentially powerful cycle over the next year or so,” he said. Ghosh sees potential for the company – like others in the space – to gain from the renewal of the order cycle for its equipment for drug development, genomic research, now that the inventory built during the pandemic is close to normalization. “You look at names like Danaher which are high-quality names. They are relatively oligopolistic companies that have very specialized equipment,” he said. As such, he said the company could become a go-to testing provider for companies ranging from drug manufacturers and life sciences research, looking for “an approved manufacturer.” The stock is down 15% year-to-date. FactSet data shows that 77% of analysts covering the company have a buy or overweight rating on the stock, with an average price target indicating around 4.5% upside. Schneider Electric Elsewhere, French energy management company Schneider Electric is on the radar of Steven Glass, managing director and investment analyst at Pella Funds. “We’re very bullish, although it’s not as cheap as it used to be on Schneider Electric. [It] is a triple-A-rated stock that’s got excellent ESG. It’s wonderfully managed. It’s an excellent business. And it’s got huge exposure to this electrification theme,” he said. Glass also sees it as a good company to get exposure to the growing electric vehicle sector, with Schneider offering various EV charging systems. Other merits include its strong bargaining power as a result of having “thousands of products” where “no one product accounts for [more than] 2% of its revenue,” Glass said. “So, it doesn’t depend on any one customer.” Year-to-date, shares in Schneider Electric are up around 28%. Just over 60% of analysts covering the stock give it a buy or overweight rating.
Five stocks to buy before the year end, according to the pros
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