Wall Street is ready for the start of the second quarter, and this is the time for investors to take a good look at their portfolios. The first quarter was an excellent time to invest in stocks, with the Nasdaq and S&P 500 hitting new highs. The economy is improving, and the Fed has promised a rate cut later this year. All of these signs mean there is a high chance for the stock market to rally, and your investment portfolio could make you significant gains.
Several stocks are nearing the 52-week high, while many companies are hiking dividends. This is the best time to be an investor, and if you have $5,000 in hand and are looking for stocks to buy and hold this quarter, I’ve picked the best three for you. These stocks are set to gain as the economy improves, and their quarterly results could be mind-blowing, taking the stock higher. With that in mind, let’s take a look at the three smart stocks to jumpstart the quarter.
Smart Stocks to Jumpstart the Quarter: Ferrari (RACE)
An unstoppable stock, Ferrari (NYSE:RACE) has tripled in the last five years. Trading at $435 today, the stock is up 29% year-to-date (YTD) and 61% in the year. One of the most stable and resilient stocks, Ferrari caters to a niche consumer base, ensuring growth even in times of high inflation.
The company manufactures a limited number of cars each year and has a group of highly rich individuals loyal to the brand. Known for some of the most luxurious and fastest cars in the world, a lot is working in favor of Ferrari.
Management expects earnings and sales to keep growing this year, driven by the robust order book fully covered until 2025. One thing to keep in mind is that Ferrari is a brand for the ultra luxurious and it enjoys a pricing power.
People are willing to join a waitlist to buy new models. In 2023, the company sold 13,663 units, and while it is not competing with the other automakers, it knows a low supply means higher demand.
The company is also set to unveil the first fully electric car this year, which could make its entry into the thriving EV segment. Another reason for the stock to keep rallying is Lewis Hamilton joining Ferrari in 2025, a huge win that could impact the company’s financials.
If you are looking to add a high-end brand to your portfolio, Ferrari is the one to buy and hold. There is no stopping the stock’s rally. In fact, we could see it hit a new 52-week high soon. RBC Capital gave it a Buy rating, with a price target of EUR 463 from EUR 380.
Microsoft (MSFT)
If you have $5,000 and want to start Q2 right, invest in Microsoft (NASDAQ:MSFT). The tech giant has been around for as long as I remember and is one company that doesn’t disappoint. Its timely investment in OpenAI has borne fruit, and we can see it in the financials today.
The company has done an exceptional job of integrating Artificial Intelligence (AI) into its products, and the roll-out of new services has been highly appreciated. Starting today, the company will offer AI for cybersecurity professionals to enhance security in an ever-evolving landscape. Microsoft 365 has also seen a massive growth in subscribers.
According to media reports, Microsoft and OpenAI have planned to invest $100 billion in a data center project. It will build an AI supercomputer known as “Stargate” and could launch in 2028.
As compared to the other companies trying to integrate AI into their products and services, Microsoft has been the most successful. Its cloud computing business is steadily growing, and I believe it will continue to expand its market share. Microsoft is one of the top smart stocks to jumpstart the quarter.
MSFT stock is trading at a premium of $420, up 13% YTD and 47% on the year. However, there is still an upside possible from here. Yes, the stock is expensive but it will be worth your money. Jefferies (NYSE:JEF) analysts have a Buy recommendation for MSFT stock and call it a top AI winner while a Wedbush analyst has an Outperform rating for the stock with a price target of $500.
Chevron (CVX)
Oil and gas giant Chevron (NYSE:CVX) has been moving sideways over the past year due to macroeconomic factors. However, the demand for oil and gas is not going to drop anytime soon, meaning the company will continue generating revenue. The energy sector was up 10% in March, and oil prices have notched gains for the past three months straight. Chevron has an investment-grade balance sheet, and with oil trading over $80 per barrel, it will continue to enjoy steady cash flows.
The company recently announced a solar-to-hydrogen project to start in 2026, which will produce hydrogen fuel. That shows its commitment to the clean energy sector and could be a game changer for Chevron. It expects to invest about $10 billion in clean energy by 2028, including hydrogen energy.
CVX stock is trading for $157 and is up 5% YTD. The stock is down from its high of $172 and could move upward once the economic conditions improve. When it comes to free cash flow, Chevron has nothing to worry about. It is a cash-heavy business and steadily enjoys revenue growth.
With a dividend yield of 4.13%, Chevron is one of the best stocks to own for passive income investors. Even if the price of oil declines from the current level, Chevron can sustain the dividends. Mizuho (NYSE:MFG) analysts have a Buy rating for the stock with a price target of $200.
On the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
