The Meta Platforms (
NASDAQ:META
), Microsoft (
NASDAQ:MSFT
), and Nvidia (
NASDAQ:NVDA
) are among the widely-discussed stocks on the famous social media platform Reddit. While these stocks are buzzing on Reddit and have significantly gained mentions, TipRanks’
Analyst Top Stocks tool shows that analysts love these stocks.
TipRanks’ Analysts’ Top Stocks tool highlights stocks with a 'Strong Buy' or 'Strong Sell' rating consensus based on the recommendations of the
best-performing analysts.
Note that TipRanks identifies the top Wall Street analysts per sector, per timeframe, and against different benchmarks. The ranking reflects an analyst’s ability to deliver high returns via recommendations.
Against this backdrop, let’s delve deeper into these trending Reddit stocks.
What are Expectations for META Stock?
Meta stock has appreciated quite a lot on a year-to-date basis, thanks to the momentum in its products and social platforms. Further, its focus on reducing costs and driving profitable growth impressed investors. Despite the massive increase in its stock, analysts are bullish about Meta’s prospects.
On TipRanks, META stock has received 27 unanimous Buy recommendations from top Wall Street analysts for a Strong Buy consensus rating. The
average Meta stock price forecast of $347 implies 8.5% upside potential from current levels. Also, the highest 12-month price target on META is $410, which indicates an impressive 28.5% upside potential.
Meta recently
announced stronger-than-expected Q2 results. Following the
Q2 earnings,
Goldman Sachs analyst Eric Sheridan increased his price target on META stock to $384 from $335 and maintained a Buy recommendation on the stock.
With ad revenues reaccelerating and the investments in
AI (artificial intelligence) increasing efficiency and providing growth opportunities ahead, Sheridan sees META stock as a solid long-term pick.
Along with Sheridan, top analysts, including
Brad Erickson of RBC Capital and
Mark Shmulik of Bernstein, reiterated their Buy recommendations on META stock on July 27.
Microsoft: Are Analysts Bullish on the Stock?
With 23 Buys, one Hold, and one Sell recommendation from top Wall Street analysts, Microsoft stock has a Strong Buy consensus rating. These analysts’
average MSFT price target of $391.75 implies 16.86% upside potential from current levels.
Nine analysts, including
Rishi Jaluria of RBC Capital and
Bradley Sills of Bank of America Securities, reiterated a Buy recommendation on MSFT stock on July 26. Further, the highest 12-month price target on MSFT is $425, which implies an impressive ~27% upside potential. This was given by
Citi analyst Tyler
Radke and
Barclays analyst Raimo Lenschow on July 25.
Microsoft stock has gained over 40% so far this year. Meanwhile,
Goldman Sachs analyst Kash Rangan remained upbeat about MSFT stock and reiterated a Buy rating on July 21. The analyst expects Microsoft to benefit from the strength of its cloud offering (encompassing Azure and Office). Further, the analyst sees MSFT as well-positioned to capitalize on secular tailwinds, including digital transformation and generative AI.
Is NVDA Stock a Good Buy Right Now?
Shares of the
chip company Nvidia skyrocketed this year thanks to the advancements in generative AI and its dominant positioning in the AI space. Despite the massive growth in its share price, the stock has received 27 Buys and two Hold recommendations from top Wall Street analysts. The
average NVDA price target of $502.86 from these analysts implies 7.6% upside potential.
Further, the highest price target of $600 represents 28.5% upside potential from current levels.
Mizuho securities analyst Vijay Rakesh reiterated a Buy recommendation on NVDA stock on July 24. The analyst increased the price target to $530 from $400.
Rakesh expects the addressable market for AI unit servers to expand by 10 times over the next five years. Moreover, Nvidia, the dominant AI player, remains well-positioned to capitalize on this significant growth opportunity.
The Bottom Line
META, MSFT, and NVDA stocks are trending on Reddit and appear attractive long-term bets, owing to the strong secular sector trends, their solid competitive positioning, and their Strong Buy consensus ratings from top Wall Street analysts.
Disclosure
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Investing doesn’t always need to be complicated, and investors don’t necessarily need to use complex strategies to be successful. Take, for example, the
Vanguard Total Stock Market ETF (
NYSEARCA:VTI)
, a simple, uncomplicated ETF that has produced excellent returns for its investors for many years. Let’s take a closer look at this long-term winner.
What is VTI's Strategy?
VTI is a popular ETF from low-cost index fund pioneer Vanguard that boasts a massive $318.5 billion in assets under management (AUM). This AUM makes VTI the fourth-largest ETF in the stock market today. As the name suggests, VTI seeks to track the performance of the entire U.S. stock market (by investing in its underlying index, the CRSP U.S. Total Market Index).
So, rather than investing in one theme or sector of the market, or even one major index like the S&P 500 (
SPX
) or the Nasdaq (
NDX
) for that matter, VTI goes a step further and invests across the entire spectrum of publicly-traded U.S. companies. This means that VTI holds over 3,800 U.S. stocks, including small-cap, mid-cap, and large-cap companies.
What I like about this strategy is that VTI leaves no stone unturned, and it gives investors the ability to harness the power and innovation of the entire breadth and depth of U.S. publicly-traded companies in their portfolios using one vehicle.
VTI has been around since 2001, so it has had plenty of time to compile a consistent track record, which we will cover later in this article.
Over 3,800 Holdings
As alluded to above, VTI holds an incredible 3,837 stocks, making it incredibly diversified. Furthermore, its top 10 holdings make up just 25.9% of the fund, adding to this diversification. Below, you’ll find a table of
VTI’s top holdings using TipRanks’ holdings tool.
As you can see, Apple (
NASDAQ:AAPL
) is VTI’s largest holding, with a 6.5% weighting, which makes sense, as Apple is the world’s biggest company by market cap. As you can surmise from this overview, VTI’s top holdings currently look somewhat tech-centric, although this isn’t by design. These were already some of the largest companies in the market, to begin with, and after the incredible gains that many of these companies have posted so far in 2023, they are back to dominating the market.
That’s why the so-called "magnificent seven" of Apple, Microsoft (
NASDAQ:MSFT
), Amazon (
NASDAQ:AMZN
), Nvidia (
NASDAQ:NVDA
), Alphabet (
NASDAQ:GOOG
) (
NASDAQ:GOOGL
), Meta Platforms (
NASDAQ:META
) and Tesla (
NASDAQ:TSLA
) all rank in VTI’s top 10 positions.
However, unlike some tech or broader-market ETFs where these mega-cap tech stocks combine to make up half of the fund or more, they only account for just under a quarter of VTI’s assets, so VTI's positioning isn't exposing investors to undue risk in this handful of names.
VTI also goes well beyond these tech behemoths -- Warren Buffett’s Berkshire Hathaway (
NYSE:BRK.B
) and health insurer UnitedHealth Group (
NYSE:UNH
) take up the other two spots in the top 10, and beyond the top 10 holdings, the fund becomes much more omnivorous.
Energy giant ExxonMobil (
NYSE:XOM
), financials like JPMorgan Chase (
NYSE:JPM
), Visa (
NYSE:V
), and Mastercard (
NYSE:MA
), and additional healthcare names like Eli Lilly (
NY
S
E:LLY
) and Merck (
NYSE:MRK
) all occupy spots within VTI’s top 20 holdings.
VTI's top holdings feature some strong Smart Scores, as well as some less compelling ones. The
Smart Score is a proprietary quantitative stock scoring system created by TipRanks. It gives stocks a score from 1 to 10 based on eight market key factors. A Smart Score of 8 or better is equivalent to an Outperform rating.
Five of VTI's top 10 holdings feature Outperform-equivalent Smart Scores, while five feature neutral ratings. VTI itself features an ETF Smart Score of 8.
Is VTI Stock a Buy, According to Analysts?
Turning to Wall Street, VTI has a Moderate Buy consensus rating, as 60.49% of analyst ratings are Buys, 34.22% are Holds, and 5.29% are Sells. At $250, the
average VTI stock price target implies 10.1% upside potential.
Consistent Results
VTI has established a venerable track record over the years, proving itself to be a long-term winner for investors over a variety of time horizons. Over the past year, the fund has had a total return of 18.9%. Over the past three years, VTI has posted a total annualized return of 13.8%. Its five-year annualized return of 11.3% and 10-year annualized return of 12.3% are impressive as well. Investing in an ETF that has generated double-digit returns for an entire decade is a great way to build long-term wealth.
Since its inception in 2001, VTI has had an annualized return of 8.1%. Cumulatively, an investor who put $100,000 into VTI 10 years ago would now have $218,590 today, and an investor who put $100,000 into the ETF at its inception in 2001 would have $456,230 today, showing the power of long-term compounding.
Minimal Fees
In addition to this strong performance and comprehensive portfolio, VTI is also an appealing investment because of its minuscule fees. VTI’s rock-bottom expense ratio of just 0.03% is among the cheapest you will find with ETFs. An investor allocating $10,000 to this long-term winner would pay just a paltry $3 in fees in year one for their investment -- less than a cup of coffee at many places nowadays.
Assuming the expense ratio remains consistent over time and that the fund gains 5% per year, after three years, this same investor would pay just $10 total in fees; after five years, they will have paid just $17, and after a decade their total fees would amount to just $39. Investing in ETFs with low fees like this is an important consideration because it helps investors to preserve the principal of their portfolios over time.
While it may not sound like much at first glance, the difference between VTI and its 0.03% fee and that of an ETF with a fee of 0.35%, or 0.75%, for example, is massive when compounded over time. Assuming the same parameters, an investor putting the same $10,000 into an ETF with an 0.35% expense ratio would pay $443 in fees after 10 years, while the investor putting $10,000 into the ETF with a 0.75% expense ratio would pay a whopping $871.
A Viable Cornerstone for Portfolios
It’s not overly fancy or complicated, but VTI has given its investors great returns for a long time. The ETF offers plenty of liquidity, with an average daily volume of over 2.7 million shares over the past three months, and it also offers a dividend yield of 1.5%.
With its comprehensive portfolio that gives investors exposure to the entire U.S. economy, its proven track record, and its minimal fees, VTI continues to be an attractive investment opportunity that investors can consider building their portfolios around.
Disclosure
Microsoft Corp will provide artificial intelligence technology to the Japanese government after enhancing the processing power of its data centres located within the country, the Nikkei newspaper reported on Thursday.