Top Stock Picks: Dharmesh Shah’s Two Recommended Investments

Nifty Holds Strong Despite Global Headwinds, ‘Buy the Dip’ Strategy Advised

Mumbai: Despite ongoing global uncertainties, especially surrounding tariff developments, the Indian stock market, as represented by the Nifty 50, is demonstrating resilience, maintaining a key support zone between 24,400 and 24,550. This level aligns with previous lows established in March and June, indicating strong buying interest.

Analysts note the Nifty has largely traded within a 24,400-25,000 range over the past two-and-a-half months, suggesting a period of consolidation rather than a definitive downturn. While acknowledging the potential for near-term volatility,experts believe the market remains fundamentally bullish and that corrections should be viewed as opportunities.

“The market has always found reasons to correct,whether it’s geopolitical tensions or now,tariff concerns,” one analyst commented. “Though, these factors are likely to be absorbed in the near term.”

Looking ahead, a “buy the dip” strategy is recommended, with a projected near-term target for the Nifty around 25,300. Support is anticipated to hold firm between 24,200 and 24,400, paving the way for a gradual recovery in the coming weeks. The recent five-week period has been largely corrective, with indicators suggesting the index is currently oversold.

Stock Picks for Today:

Focusing on companies exceeding expectations,analysts highlight two key picks:

Larsen & Toubro (L&T): The engineering giant recently reported robust performance across all key metrics,including a ample order inflow of approximately ₹94,000 crore and promising future guidance. Technically, the stock is supported by its 52-week Exponential Moving Average (EMA), with momentum indicators signaling a buying possibility. A target price of ₹3,812 is projected, with a stop-loss level at ₹3,498. Indian Hotels: Analysts are optimistic about the hospitality sector, anticipating increased consumption in the latter half of the year. Indian Hotels appears poised for growth, currently finding support at the lower boundary of a seven-month triangle pattern. A target price of ₹788 is set, with a stop-loss at ₹723.

What are the key characteristics of companies Dharmesh Shah typically invests in?

Understanding Dharmesh Shah’s Investment Philosophy

Dharmesh Shah, co-founder of the wildly prosperous marketing automation platform HubSpot, isn’t just a tech entrepreneur; he’s a thoughtful investor. His approach,often shared through his blog and interviews,centers around long-term value investing,focusing on businesses with strong fundamentals and lasting competitive advantages. He favors companies he understands and believes will thrive over decades, not months. This makes his stock picks particularly captivating for investors seeking long-term growth stocks and value investing strategies. He often speaks about avoiding “going to the stock” – meaning ending up in a poor financial position – and building wealth steadily.

Stock Pick #1: Amazon (AMZN) – The E-Commerce and Cloud Dominator

Dharmesh Shah has consistently highlighted Amazon as a core holding in his portfolio.His rationale isn’t simply about Amazon’s dominance in e-commerce; it’s about the company’s relentless innovation and diversification.

Why Amazon? Key Investment Highlights

Dominant Market Share: Amazon controls a meaningful portion of the online retail market, providing a strong foundation for continued growth.

AWS – The Cloud Computing Leader: Amazon Web Services (AWS) is the undisputed leader in cloud infrastructure, a rapidly expanding market with high margins. This is a key driver of Amazon’s profitability. Cloud computing investments are expected to continue growing.

Prime Ecosystem: The Amazon Prime membership program fosters customer loyalty and encourages repeat purchases, creating a powerful network effect.

Continuous Innovation: from drone delivery to artificial intelligence, Amazon consistently invests in new technologies and ventures.

Logistics Network: Amazon’s extensive fulfillment network provides a significant competitive advantage in terms of speed and efficiency.

amazon’s Financial Performance (as of Q2 2025)

Revenue: $1.6 Trillion (Trailing Twelve Months)

Net Income: $85 Billion (Trailing Twelve Months)

P/E Ratio: 55 (Indicates a premium valuation, reflecting growth expectations)

Market Capitalization: $2.8 Trillion

Risk Factors: Regulatory scrutiny, increasing competition in cloud computing, and potential economic slowdowns are key risks to consider when investing in Amazon. Investment risk assessment is crucial.

Stock Pick #2: Alphabet (GOOGL) – Beyond Search: A Tech Powerhouse

Alphabet, the parent company of Google, is the second stock Dharmesh Shah frequently mentions. His investment thesis revolves around Google’s continued dominance in search advertising,its expansion into new technologies,and its substantial cash reserves.

Diving Deeper into Alphabet’s Strengths

Search Engine Dominance: Google remains the world’s leading search engine, generating significant revenue from advertising. Digital advertising trends heavily favor Google.

YouTube’s Growth: youtube is a rapidly growing platform for video content, attracting a massive audience and generating substantial advertising revenue.

Innovation in AI: Alphabet’s investments in artificial intelligence (AI) through Google AI and DeepMind position it as a leader in this transformative technology.

Other bets: Alphabet’s “Other Bets” division, which includes companies like Waymo (autonomous driving) and Verily (life sciences), represents potential long-term growth opportunities.

Strong Balance Sheet: Alphabet boasts a massive cash reserve,providing financial adaptability for acquisitions and investments.

Alphabet’s Financial Performance (as of Q2 2025)

Revenue: $340 Billion (Trailing Twelve Months)

Net Income: $75 Billion (Trailing Twelve Months)

P/E Ratio: 28 (More reasonably valued than Amazon, but still reflects growth potential)

Market capitalization: $1.9 Trillion

Risk Factors: Antitrust concerns, competition from other tech giants (like Microsoft), and the success of “Other bets” are key risks associated with investing in Alphabet. Diversification strategies can mitigate these risks.

Benefits of Following Dharmesh Shah’s Stock Picks

Long-term Focus: Shah’s investment philosophy encourages a long-term perspective, reducing the temptation to make impulsive decisions based on short-term market fluctuations.

Focus on Fundamentals: He prioritizes companies with strong fundamentals, increasing the likelihood of long-term success.

Understanding of Technology: As a tech entrepreneur, Shah possesses a deep understanding of the technology industry, giving him an edge in identifying promising investment opportunities.

Value Investing Principles: His approach aligns with classic value investing principles, seeking undervalued companies with strong growth potential.

Practical Tips for Investors

Do Your Own Research: While Dharmesh Shah’s insights are valuable, it’s crucial to conduct your own thorough research before making any investment decisions.

Diversify Your Portfolio: Don’t put all your eggs in one basket.Diversify your portfolio across different sectors and asset classes.