In the current economic landscape, characterized by high interest rates, the importance of debt-free stocks has become increasingly significant for investors. Debt-free companies do not have to allocate resources to paying interest on loans or other forms of debt. This means they have more financial flexibility to invest in growth opportunities, research and development, and other strategic initiatives that can enhance their long-term value. In a high-interest-rate environment, this flexibility is crucial and can lead to stronger financial performance and a more resilient business model, which is especially important during economic downturns.
Moreover, debt-free stocks tend to be less volatile during periods of economic uncertainty. High interest rates often accompany inflationary pressures and economic slowdowns, which can lead to market volatility and investor anxiety. Companies with no debt are generally perceived as safer investments, as they are less likely to face financial distress or bankruptcy. This can provide a level of stability and peace of mind for investors, who may be looking to protect their portfolios from the adverse effects of a volatile market.
Another advantage of investing in debt-free stocks in a high-interest-rate environment is the potential for higher dividend yields. Companies with strong cash positions and no debt obligations are more likely to have the financial capacity to pay dividends to shareholders. Additionally, the valuation of debt-free stocks can be more favorable in a high-interest-rate environment.
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In an interview with CNBC on January 30, Jeffrey Gundlach, CEO of DoubleLine Capital, discussed the Federal Reserve’s recent meeting and the market’s reaction to it. Gundlach noted that the market perceived the Fed’s stance as slightly hawkish, despite the Fed’s emphasis on taking a “no hurry” approach to cutting interest rates. He highlighted that the Fed’s current policy is well-aligned with the current economic conditions, with the two-year Treasury yield and the federal funds rate being closely in sync. However, Gundlach expressed concern over the Fed’s high degree of data dependency which suggests that this approach might lead to short-termism in monetary policy decisions.
Gundlach also pointed out the unusual market dynamics since the Fed’s first rate cut in September. He mentioned that typically a rate-cutting cycle would lead to a bond rally, but in this instance, the two-year Treasury yield has increased by 60 basis points, and the ten-year Treasury yield has risen by 85 basis points. This trend, combined with the decline in the long bond ETF, indicates that the bond market has not responded as expected to the Fed’s actions. Gundlach sees this as a sign that the market is in a relatively stable position, with the Fed on hold and waiting for more data to guide future decisions.
Furthermore, Gundlach discussed the valuation concerns in the stock market, particularly the high Cyclically Adjusted Price-to-Earnings (CAPE) ratio of the S&P 500, which stands at about 35. He compared this to the CAPE ratio when Ronald Reagan took office, which was around 10, suggesting that there is limited room for further valuation expansion. This implies that any gains in the stock market will likely be driven by earnings rather than multiple expansions.
With interest rates unlikely to decline soon, debt-free stocks remain attractive for their stability, resilience, and strong financial positioning. With that in context, let’s take a look at the 10 best debt free stocks to buy now.
Our Methodology
To compile our list of the 10 best debt free stocks to buy now, we used the Finviz stock screener to identify companies with zero or very little debt. We compared their enterprise value (EV) to their market capitalization as of January 31. We then used Insider Monkey’s Hedge Fund database to rank 10 stocks according to the largest number of hedge fund holders, as of Q3 2024. The list is sorted in ascending order of hedge fund sentiment.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Debt Free Stocks to Buy Now
10. Wheaton Precious Metals Corp. (NYSE:WPM)
Number of Hedge Fund Holdings: 23
Market Capitalization as of January 31: $28.38 Billion
Enterprise Value: $27.69 Billion
Wheaton Precious Metals Corp. (NYSE:WPM) is a leading precious metals streaming company that provides upfront capital to mining companies in exchange for the right to purchase a portion of their future metal production at a fixed, discounted price. The company’s portfolio includes long-term agreements with top-tier gold and silver miners worldwide.
Wheaton Precious Metals Corp. (NYSE:WPM) is actively expanding its portfolio through strategic partnerships and value-accretive transactions. The company recently announced an expansion to its existing stream on Rio2’s Phoenix project by committing an additional $100 million investment. Furthermore, Wheaton Precious Metals Corp. (NYSE:WPM) has secured a new $625 million gold stream on Montage’s Kona project in Côte d’Ivoire, which is one of the most promising and high-quality gold projects on the continent, with an extended 16-year mine life.
Wheaton Precious Metals Corp. (NYSE:WPM) has further strengthened its portfolio by finalizing a $175 million streaming deal with Allied Gold for the Kurmuk project in Ethiopia. Under this agreement, the company will provide upfront cash payments in four equal installments during the project’s construction phase. In return, the company will receive 6.7% of the payable gold until 220,000 ounces have been delivered, after which it will acquire 4.8% of the payable gold for the remainder of the mine’s life. This transaction will add 180,000 ounces of proven and probable gold reserves, 30,000 ounces of measured and indicated resources, and 20,000 ounces of inferred resources to the company’s growing asset base.
Wheaton Precious Metals Corp. (NYSE:WPM) is also investing in several development projects which expected to commence gold production in the near future. Key projects include Blackwater, Goose, Platreef, and Mineral Park, all of which are anticipated to become operational within the next 12 months. These new mines are projected to significantly boost the company’s gold output, with production expected to grow at an industry-leading rate of approximately 40%, surpassing 800,000 ounces by 2028.
9. Full Truck Alliance Co. Ltd. (NYSE:YMM)
Number of Hedge Fund Holdings: 24
Market Capitalization as of January 31: $11.78 Billion
Enterprise Value: $8.94 Billion
Full Truck Alliance Co. Ltd. (NYSE:YMM) is a China-based technology company that operates a digital freight platform and is often referred to as the “Uber for trucks.” The company connects truck drivers with shippers, optimizes logistics, and helps reduce transportation inefficiencies across China. The company generates revenue through service fees, transaction commissions, and value-added services such as financial and insurance solutions for its users.
Full Truck Alliance Co. Ltd. (NYSE:YMM) is committed to driving substantial growth in its user base by implementing comprehensive user acquisition campaigns and refining its product features. The company has successfully expanded its reach through diverse channels, including online app stores, strategic marketing placements, and offline initiatives such as truck sticker advertising and brand awareness campaigns. These efforts have led to a significant increase in monthly active users.
To further enhance user engagement, Full Truck Alliance Co. Ltd. (NYSE:YMM) has simplified the order placement interface and proactively engaged dormant users through targeted customer service efforts. Additionally, the company has introduced a membership program, which offers benefits like shipment tracking and freight discounts. This program has effectively converted a larger proportion of low and medium-frequency shippers into paying members.
8. Check Point Software Technologies Ltd. (NASDAQ:CHKP)
Number of Hedge Fund Holdings: 32
Market Capitalization as of January 31: $23.98 Billion
Enterprise Value: $22.61 Billion
Check Point Software Technologies Ltd. (NASDAQ:CHKP) is an Israeli cybersecurity company specializing in network security, endpoint protection, cloud security, and mobile security solutions. The company generates revenue through software subscriptions, hardware sales, and professional services. Check Point Software Technologies Ltd.’s (NASDAQ:CHKP) clients include government agencies, financial institutions, and Fortune 500 companies.
Check Point Software Technologies Ltd. (NASDAQ:CHKP) is focused on developing a hybrid mesh network architecture to address the growing complexity and interconnectedness of modern networks. This approach aims to consolidate and unify various security solutions, including on-premises firewalls, cloud network security, and remote workforce protection, into a single, cohesive platform. The hybrid mesh network will not only enhance the company’s existing products but also position it as a leader in the evolving cybersecurity landscape.
Furthermore, Check Point Software Technologies Ltd. (NASDAQ:CHKP) is investing heavily in AI to develop autonomous capabilities that can detect and respond to threats in real time, without human intervention. The company’s Threat Cloud, which already includes 48 AI engines, is being expanded to include even more sophisticated algorithms. Check Point Software Technologies Ltd. (NASDAQ:CHKP) is also working on integrating AI to simplify the user experience to make it easier for security teams to manage and operate their systems.
7. Franco-Nevada Corporation (NYSE:FNV)
Number of Hedge Fund Holdings: 32
Market Capitalization as of January 31: $26.24 Billion
Enterprise Value: $24.92 Billion
Franco-Nevada Corporation (NYSE:FNV) is a leading royalty and streaming company. The company provides upfront capital to miners in exchange for a percentage of future metal production or sales. This business model allows the company to generate consistent cash flow while avoiding operational and environmental risks associated with mining. The company’s portfolio includes gold, silver, platinum, and other resource royalties from mines worldwide.
Franco-Nevada Corporation (NYSE:FNV) is actively pursuing strategic acquisitions and investments in new mine developments. The company has recently seen a boost in contributions from its newly commissioned Tocantinzinho mine in Brazil, alongside increased royalty revenues from the recently completed Greenstone mine and the newly acquired Yanacocha royalty. These additions are expected to play a crucial role in accelerating revenue growth and improving overall financial performance. In addition to these recent successes, Franco-Nevada Corporation’s (NYSE:FNV) business development team is actively assessing a robust pipeline of potential precious metal streams and royalty opportunities.
Moreover, Franco-Nevada Corporation (NYSE:FNV) remains dedicated to operational excellence and continuous improvement across its diverse asset base. The company maintains close collaboration with its operating partners to optimize mine performance, enhance efficiency, and proactively address any operational challenges that may arise. By leveraging its strong industry expertise and maintaining a disciplined approach to capital allocation, Franco-Nevada Corporation (NYSE:FNV) is well-positioned to sustain long-term growth while delivering consistent returns to its shareholders.
6. Mobileye Global Inc. (NASDAQ:MBLY)
Number of Hedge Fund Holdings: 33
Market Capitalization as of January 31: $13.40 Billion
Enterprise Value: $11.98 Billion
Mobileye Global Inc. (NASDAQ:MBLY) is an Israel-based company specializing in autonomous driving and advanced driver-assistance systems (ADAS). The company develops computer vision technology, AI-powered software, and mapping solutions for self-driving vehicles. Mobileye Global Inc. (NASDAQ:MBLY) generates revenue by supplying its technology to automakers such as BMW, Volkswagen, and General Motors.
Mobileye Global Inc. (NASDAQ:MBLY) is committed to maintaining its leadership in ADAS and autonomous driving through continuous innovation. The company has a strong focus on developing highly efficient AI and silicon designs that outperform competing technologies. For example, the company recently developed the EyeQ6 chip, which is 1/4 the size of competing high-performance chips. The company has also recently showcased a transformer architecture that is 100 times more efficient than standard transformers and a purpose-built solution for autonomous driving. These technological advancements not only enhance the performance of Mobileye Global Inc.’s (NASDAQ:MBLY) products but also reduce costs, making advanced driving technologies more accessible to a broader range of vehicles.
Mobileye Global Inc. (NASDAQ:MBLY) is actively working to expand its customer base and increase its market share. The company continues to win new ADAS business with its core customers and is seeing opportunities with new customers, particularly in emerging markets. The company recently secured a multimillion-unit RAM data harvesting and cloud-enhanced driving assist program from a key customer, which strengthened its global data harvesting capabilities. Additionally, Mobileye Global Inc. (NASDAQ:MBLY) is collaborating with an Indian OEM on a REM data harvesting company, which will enable the company to expand its presence in the rapidly growing Indian market.
5. Astera Labs, Inc. (NASDAQ:ALAB)
Number of Hedge Fund Holdings: 39
Market Capitalization as of January 31: $16.09 Billion
Enterprise Value: $15.26 Billion
Astera Labs, Inc. (NASDAQ:ALAB) is a semiconductor company specializing in connectivity solutions for cloud computing and AI infrastructure. The company develops high-speed data center interconnects that enable efficient communication between GPUs, CPUs, and other computing components. Astera Labs, Inc.’s (NASDAQ:ALAB) products are critical for accelerating AI workloads and cloud computing performance. The company serves major technology firms, including cloud service providers and hyperscale data centers.
Astera Labs, Inc. (NASDAQ:ALAB) is actively pursuing a multifaceted approach to drive business growth and maintain its leadership in the intelligent connectivity solutions market. One of the key strategies is the continuous expansion of its product portfolio. The company has recently introduced the Scorpio Smart Fabric Switch family, which significantly broadens its market opportunity.
The Scorpio family includes the P-Series and X-Series switches. The P-Series is designed for AI Server Head Node scale-out applications and addresses the critical challenge of keeping modern GPUs fed with data at ever-increasing speeds. The X-Series, on the other hand, is built for AI accelerator scale-up clustering, improving the efficiency and size of AI clusters.
These advanced solutions not only enhance the performance of AI systems but also command higher average selling prices, thereby increasing the dollar content per AI platform. This expansion is expected to unlock additional multiyear growth trajectories for Astera Labs, Inc. (NASDAQ:ALAB), as the company targets a total market opportunity of over $12 billion by 2028.
4. GitLab Inc. (NASDAQ:GTLB)
Number of Hedge Fund Holdings: 43
Market Capitalization as of January 31: $11.81 Billion
Enterprise Value: $10.89 Billion
GitLab Inc. (NASDAQ:GTLB) is a prominent DevOps platform that delivers comprehensive software development solutions for enterprises and developers. The company’s services facilitate project planning, source code management, and application monitoring to help streamline the development process. GitLab Inc. (NASDAQ:GTLB) generates revenue through subscriptions and by offering premium features tailored to the needs of large-scale teams.
GitLab Inc. (NASDAQ:GTLB) is leading the integration of AI into its DevSecOps platform with the introduction of GitLab Duo Pro and GitLab Duo Enterprise. These AI-driven tools are designed to boost developer productivity by automating repetitive tasks and offering real-time code assistance. A key innovation in this space is the company’s agentic AI which is aimed at creating autonomous agents capable of managing the entire software development lifecycle. This technology, known as GitLab Duo Workflow, is set to transform the industry by minimizing the time developers spend on routine tasks and allowing them to focus on high-value work.
GitLab Inc. (NASDAQ:GTLB) is also actively forming strategic alliances with hyperscalers such as AWS and system integrators. These partnerships are essential for broadening the company’s reach and ensuring that customers can seamlessly integrate its platform with other leading technologies. Recently, GitLab Inc. (NASDAQ:GTLB) announced a collaboration with AWS to provide a bundled solution featuring Amazon Q and GitLab Duo, enabling developers to create and deploy secure, high-quality code more efficiently on the AWS cloud.
3. Arista Networks Inc. (NYSE:ANET)
Number of Hedge Fund Holdings: 70
Market Capitalization as of January 31: $145.16 Billion
Enterprise Value: $140.75 Billion
Arista Networks Inc. (NYSE:ANET) is a networking hardware and software company that specializes in high-performance cloud networking solutions. The company generates revenue by selling Ethernet switches, routers, and software-driven networking solutions to large enterprises, data centers, and cloud service providers including tech giants such as Microsoft, Meta, Cisco, Google, Juniper, and HP Enterprise.
Arista Networks Inc. (NYSE:ANET) is strategically well-positioned to capitalize on the growing demand for cloud and artificial intelligence (AI) solutions. For 2025, the company is forecasting a revenue growth rate of 15% to 17%, driven primarily by the cloud and hyperscaler AI market. This forecast is based on the company’s anticipation of a continued mix of cloud and AI spending, which is expected to be accretive.
To support its growth ambitions, Arista Networks Inc. (NYSE:ANET) is making strategic investments in talent and channel partnerships. The company is ramping up its sales headcount at a low double-digit rate, particularly in regions outside of the Americas, where it sees significant growth opportunities. Arista Networks Inc. (NYSE:ANET) has also entered into preferred partner elite programs to strengthen its channel presence and ensure that it can reach and serve a broader customer base effectively.
2. Intuitive Surgical, Inc. (NASDAQ:ISRG)
Number of Hedge Fund Holdings: 82
Market Capitalization as of January 31: $203.96 Billion
Enterprise Value: $199.95 Billion
Intuitive Surgical, Inc. (NASDAQ:ISRG) is a pioneer in robotic-assisted surgery and is best known for its da Vinci Surgical System. The company generates revenue through the sale of surgical robots, instrument replacements, and maintenance services. Intuitive Surgical, Inc.’s (NASDAQ:ISRG) robotic systems enable minimally invasive procedures across various medical fields, including urology, gynecology, and general surgery.
Intuitive Surgical, Inc. (NASDAQ:ISRG) is focusing on the full launch of da Vinci 5, its fifth-generation multi-port platform. The company has already placed 362 da Vinci 5 systems in 2024, with over 2,500 surgeons performing more than 32,000 procedures. The da Vinci 5 offers a wide range of clinical indications and has been used for over 40 different procedure types.
Intuitive Surgical, Inc. (NASDAQ:ISRG) plans to roll out hardware and software upgrades to enhance the digital features supported by a 10,000-time increase in computing power. These upgrades will focus on improving surgical precision, ergonomics, and data analytics by providing surgeons with a more comprehensive surgical experience. The company is also working on securing regional clearances and expanding the platform’s availability globally, which will drive adoption and increase market penetration.
Intuitive Surgical, Inc. (NASDAQ:ISRG) is also focused on building industrial scale and optimizing its manufacturing processes. The company is opening new facilities for da Vinci 5 and Ion system manufacturing in California and new endoscope manufacturing facilities in Germany and Bulgaria. These expansions will enhance production capacity, improve product margins, and reduce costs. Intuitive Surgical, Inc. (NASDAQ:ISRG) is also transferring mature products to facilities in Peachtree Corners, Georgia, and Mexicali, Mexico, to further optimize its manufacturing footprint.
1. GE Vernova Inc. (NYSE:GEV)
Number of Hedge Fund Holdings: 89
Market Capitalization as of January 31: $102.79 Billion
Enterprise Value: $101.86 Billion
GE Vernova Inc. (NYSE:GEV) is a leading global energy technology company that is dedicated to providing advanced solutions in power generation, electrification, and renewable energy. The company was created as an independent entity from a spin-off from General Electric in 2024 and generates revenue through the sale of wind turbines, power generation equipment, and energy management software.
GE Vernova Inc. (NYSE:GEV) is at the forefront of developing and implementing decarbonization technologies to address the global need for sustainable energy. The company is advancing carbon capture and sequestration (CCS) technology, which is crucial for reducing carbon emissions from power generation plants. The company’s Net Zero Teesside Power project is expected to be the first gas-fired power station fully integrated with CCS technology. Additionally, GE Vernova Inc. (NYSE:GEV) is collaborating with multiple large U.S. utilities to accelerate the deployment of its small modular nuclear reactor, the BWRX-300.
GE Vernova Inc. (NYSE:GEV) is experiencing robust demand for gas generation, driven by the need for reliable power and grid modernization. In 2024, the company secured approximately 20 gigawatts of gas orders, doubling the previous year’s level. The company is now focusing on expanding its production capacity and aims to produce 70 to 80 heavy-duty gas turbines per year by the second half of 2026, up from 48 in 2024. This expansion is crucial to meet the growing demand, particularly from data center hyperscalers driven by the AI boom.
While we acknowledge the potential of GE Vernova Inc. (NYSE:GEV) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than GEV but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
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