10 Best Financial Stocks To Buy According to Hedge Funds

In this article, we will discuss: 10 Best Financial Stocks To Buy According to Hedge Funds.

According to the Business Research Company, the market for financial services has expanded significantly in the last several years and is further expected to grow at a compound annual growth rate (CAGR) of 7.7% in the next few years.

The year 2024 was remarkable for the financial sector, as seen by the Financial Sector Index, which rose over 30% as of mid-December and outperformed the broader market by almost 5 percentage points. This expansion came after worries over mid-sized bank failures in early 2024, which turned out to be isolated events rather than a problem affecting the entire industry.

As of January 7, 2025, the market’s financial sector produced returns of 5.51% over three years, 9.68% over five years, and 9.49% over ten years. These numbers, however, pale in comparison to the sector’s remarkable success during the previous 12 months, which saw a return of 28.01%.

Looking forward, according to Fidelity’s report, the financial industry’s prospects for 2025 seem promising, backed by consistent economic expansion in the United States. It is projected that the Federal Reserve’s move to rate decreases in the second half of 2024 will boost confidence and lower credit risk. Falling rates have the potential to boost lending and deposit growth while also reducing net interest margins.

As per Fidelity analyst Matt Reed:

“Lower rates boost economic momentum, benefiting banks and payment processors alike.”

Banks that are well-diversified and have solid fundamentals are better equipped to handle a soft landing situation. Sensitive to consumer spending, payment processors are likewise poised for expansion as more accommodating monetary policy and strong consumer activity coincide.

Risks still exist, though. As per the aforementioned report, if the economy weakens, some lenders may face difficulties due to their exposure to commercial real estate and possible nonperforming loans. Nonetheless, financials start 2025 with significant momentum due to a less stringent regulatory agenda following the election and more prospects for mergers and acquisitions.

Michael Kantrowitz, chief investment strategist at Piper Sandler stated:

“I think investors have rotated a little bit out of some of the big tech companies and into the big financial companies,”

He claimed that while a lot of optimism about artificial intelligence (AI) is priced into tech businesses, some investor movement made sense since the rate environment has improved for bank earnings.

Deloitte’s 2025 banking and capital markets outlook report states that banks can strengthen their basis for sustainable growth with creativity and discipline as the banking industry adjusts to a low-growth, lower-rate environment. According to the report, the baseline scenario for economic growth in 2025 is projected to fall to 1.5%, with possible deviations between 1.0% and 1.9% due to slowing consumer spending, greater unemployment, and sluggish business investment. By Q2 of 2024, consumer debt had risen to $17.7 trillion, and by March 2024, savings from the pandemic had been spent, further straining the economy. Inflation is forecast to be around 2%, allowing for three to four rate cuts, bringing the federal funds rate down to 350-375 basis points. Treasury yields are projected to fall, and following two years of inversion, the yield curve may normalize. With the exception of economies that are under pressure, global central banks will likely choose to cut benchmark rates.

With that said, here are the 10 Best Financial Stocks To Buy According to Hedge Funds.

Methodology:

We sifted through holdings of financial ETFs and online rankings to form an initial list of 20 financial stocks. From the resultant dataset, we chose 10 stocks with the highest number of hedge fund investors, using Insider Monkey’s database of 900 hedge funds in Q3 2024 to gauge hedge fund sentiment for stocks.

Why are we interested in the stocks that hedge funds pile into? 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. Intercontinental Exchange Inc. (NYSE:ICE)

Number of Hedge Fund Holders: 84

One of the Best Financial Stocks, Intercontinental Exchange, Inc. (NYSE:ICE) offers supplementary data products and operates financial exchanges in a vertically integrated manner. Though the firm is best recognized for its ownership of the New York Stock Exchange, which it bought in 2013, it also operates a major derivatives exchange. The ICE Brent crude futures contract is the company’s largest commodity futures offering. Intercontinental Exchange has created its mortgage technology business (22% of net revenue) and fixed-income and data services division (24% of net revenue) through a series of acquisitions in addition to its exchanges business, which accounts for roughly 54% of net revenue.

In Q3 of 2024, Intercontinental Exchange, Inc. (NYSE:ICE), net sales hit a new high of $2.3 billion, up 17.27% year on year, due to record transaction revenues of $1.1 billion and record recurring revenues of $1.2 billion. Adjusted earnings per share also reached a record high of $1.55, while adjusted pro forma operating income increased by 12% yearly to a record $1.4 billion. The Exchange division performed exceptionally well, as seen by its net sales, which increased 12% year over year to a record $1.3 billion. This segment’s transaction revenues jumped by 17% to $890 million, mainly due to a rise of 23% in energy revenues and a 34% increase in interest rate business.

The Fixed Income and Data Services segment also experienced significant growth, with record revenues of $586 million. This segment’s recurring revenues hit a record $461 million, up 6% from the previous year. The index business witnessed growth of about 30% YoY. Furthermore, Intercontinental Exchange, Inc. (NYSE:ICE) achieved notable strides in debt reduction, reducing its outstanding debt by roughly $600 million over the quarter and finishing with an adjusted leverage ratio of approximately 3.5x EBITDA.

Aristotle Core Equity Strategy stated the following regarding Intercontinental Exchange, Inc. (NYSE:ICE) in its Q3 2024 investor letter:

“Intercontinental Exchange, Inc. (NYSE:ICE) contributed to portfolio performance in the third quarter, driven by continued strength in the company’s Exchanges segment and expectations that the Mortgage Technology segment’s revenues have troughed ahead of an eventual recovery in U.S. housing market activity. Exchanges’ revenues continue to be driven by growth in energy and interest rate futures trading volumes, with energy trading activity expected to remain elevated, primarily bolstered by increasing data center-driven electricity demand.”

Natixis Global Asset Management’s Harris Associates was the largest stakeholder in the company from among the funds in Insider Monkey’s database at the end of Q3 2024. It owns 13.29 million shares worth $2.14 billion as of Q3.

9. S&P Global Inc. (NYSE:SPGI)

Number of Hedge Fund Holders: 85

Participants in the capital and commodity markets can access data and benchmarks from S&P Global Inc. (NYSE:SPGI). In terms of profitability, its ratings division is S&P’s largest segment and the biggest credit rating firm globally. Market intelligence is S&P’s largest revenue division, offering desktop, data, and advisory solutions; enterprise solutions; and credit/risk solutions primarily to the financial services industry. The other segments of the company are indexes, mobility (Carfax), and commodity insights (Platts and other data).

Furthermore, S&P Global Inc. (NYSE:SPGI) has recently launched tools like ChatAI and integrated generative AI as part of its focus on technological advancement. The firm has also improved its portfolio and reaffirmed its fundamental skills through strategic actions, including the acquisition of Visible Alpha and its purchase of PrimeOne. The stock has risen by around 14% since the beginning of 2024, making it one of the Best Financial Stocks.

S&P Global Inc. (NYSE:SPGI) reported $3.6 billion in revenue for the third quarter of 2024, a 16% growth over the same period the previous year. Apart from its ratings business, the company also benefits from the consistent cash flow produced by its data and analytics division. As of now, the company’s operating cash flow has grown to around $4 billion, a substantial increase from $2.4 billion in the same period last year. For 52 consecutive years, S&P Global Inc. (NYSE:SPGI) has increased its dividends.

Aristotle Atlantic Partners, LLC highlighted S&P Global Inc. (NYSE:SPGI)’s strong performance in its Q3 2024 investor letter. Here is what the firm has to say:

“S&P Global Inc. (NYSE:SPGI) contributed to portfolio performance in the third quarter, driven by growth in corporate bond issuance and refinancing activity, with expectations for further acceleration if interest rates decline. The company has also achieved better-than-expected expense and revenue synergies from its acquisition of IHS Markit.”

Morgan Stanley increased its price target for S&P Global Inc. (NYSE:SPGI) from $570 to $595 on December 12, 2024. The company claims that it favors stocks in the business and education services markets, where it anticipates faster growth that is not yet represented in valuation, due to the possibility of better consumer credit and recovering capital markets in 2025.

Chris Hohn’s TCI Fund Management was the largest stakeholder in the company among the funds in Insider Monkey’s database at the end of Q3 2024. It owns 10.40 million shares worth $5.37 billion as of Q3.

8. Citigroup Inc. (NYSE:C)

Number of Hedge Fund Holders: 88

One of the Best Financial Stocks, Citigroup Inc. (NYSE:C) is a multinational financial services firm with operations in over 100 countries and jurisdictions. The activities of the company are divided into five main areas: wealth management, banking, markets, services, and US personal banking. The bank’s main offerings are credit card services in the US, investment banking and trading, and cross-border banking requirements for multinational companies.

Citigroup Inc. (NYSE:C) has both a domestic retail banking division and a franchise for international commercial banking. The bank’s commercial operations—services, markets, and banking segments (formerly known as Institutional Client Group, or ICG)—include large trading, investment banking, international corporate banking, and custody operations. Given its global reach, the firm’s commercial banking division is its most distinctive business. This global reach will support its continued status as a preferred bank for multinational corporations. Although there are certain benefits to having a global presence, maintaining it is costly and difficult, and the bank’s markets department yields low profits. Consequently, the commercial banking industry has seen a range of returns.

Citigroup Inc. (NYSE:C) is undergoing a strategic repositioning, which includes substantial measures like selling off its consumer business in Mexico and reinvesting in commercial banking and wealth. The business may finally emerge as a structurally improved franchise.

In Q3 of 2024, the company saw positive revenue growth, with overall revenues increasing by 3% excluding divestitures, as each key segment achieved growth and improved operating leverage. Significant fee growth and higher loan and deposit volumes propelled the Services segment’s 8% revenue gain, which set a new quarterly record. Wealth management also made significant strides, as seen by a 24% growth in client investment assets and a 9% increase in revenues. Meanwhile, adviser productivity at Citigold North America rose by more than 50%. YoY. Investment-grade debt issuance and solid advisory performance drove a 44% YoY increase in investment banking fees. The company also returned $2.1 billion in capital, including $1 billion in share repurchases, while maintaining a strong CET1 capital ratio of 13.7%.

Warren Buffett’s Berkshire Hathaway was the largest stakeholder in the company among the funds in Insider Monkey’s database at the end of Q3 2024. It owns 55.24 million shares worth $3.46 billion as of Q3.

7. PayPal Holdings Inc. (NASDAQ:PYPL)

Number of Hedge Fund Holders: 90

One of the Best Financial Stocks, PayPal Holdings, Inc. (NASDAQ:PYPL), which specializes in online transactions, was separated from eBay in 2015 and offers electronic payment options to both individuals and businesses. By the end of 2023, the firm had 426 million active accounts. Additionally, the company owns the person-to-person payment network Venmo.

PayPal Holdings, Inc. (NASDAQ:PYPL) was able to establish and preserve a competitive edge by building a network of merchants and customers early in the development of e-commerce. In the past, the firm’s expansion has been pushed by the continuous transition to electronic payments and the emergence of e-commerce, which the coronavirus pandemic momentarily worsened. More recently, however, the company has faced significant challenges as the benefits of the pandemic have reversed and new competitors have emerged. In an effort to ease the strain on top-line growth, management has put more of an emphasis on cost reduction and product innovation, with the ultimate goal of moving toward more profitable growth.

In the third quarter of 2024, PayPal Holdings, Inc. (NASDAQ:PYPL)’s net revenues jumped by 6% YoY to $7.8 billion, fueled by an increase in transaction volume and profit growth. Payment transactions rose by 6% to $6.6 billion, while the overall payment volume surged by 9% to $422.6 billion. The operating cash flow grew by 28.20% year over year. Additionally, PayPal repurchased shares, returning $1.8 billion to stockholders.

James Faucette, an analyst at Morgan Stanley, increased his price objective for PayPal Holdings, Inc. (NASDAQ:PYPL) from $76 to $90. According to the firm’s 2025 forecast statement, its attractive payments and processing industry assessment is based on better investor optimism, young consumer preferences, a call for further investment in competitive strengths, more M&A, and reduced regulatory scrutiny.

Ken Griffin’s Citadel Investment Group was the largest stakeholder in the company among the funds in Insider Monkey’s database. It owns 9.06 million shares worth $707.21 million as of Q3.

Artisan Value Fund stated the following regarding PayPal Holdings, Inc. (NASDAQ:PYPL) in its Q3 2024 investor letter:

“Our top contributor was PayPal Holdings, Inc. (NASDAQ:PYPL), a financial technology company that enables digital and mobile payments between consumers and merchants. PayPal was a recent new purchase added to the portfolio in Q2. Better growth in payment volumes and transaction margins during PayPal’s latest quarter offered evidence that the new management team’s efforts are gaining traction. Notably, payment service provider Braintree returned to providing positive transaction margin, branded checkout contributed strongly to payment volume growth, and monetization at Venmo showed progress. Post-COVID, PayPal’s shares had been pressured by intensifying competition, the threat of which was seemingly exacerbated by prior management missteps. Shares traded for under 14X next year’s expected earnings at the time of our initial purchase. This was an attractive entry point to purchase a stake in a business with above-average—and improving—unit economics, a strong balance sheet and consistent free cash flow. Competent new management is already leaning on the company’s strong financial position to maximize the value of these assets.”

6. The Progressive Corporation (NYSE:PGR)

Number of Hedge Fund Holders: 95

The Progressive Corporation (NYSE:PGR) provides private and commercial auto insurance, as well as specialty lines; it has about 20 million personal auto policies in force and is one of the major auto insurers in the United States. The company markets its plans directly over the phone and online, as well as via independent insurance companies in the US and Canada. Its premiums are divided almost evenly between the agent and direct channels. The firm also sells commercial auto plans and expanded into homeowners insurance through an acquisition in 2015.

One of the most successful franchises in the insurance sector and the Best Financial Stocks, The Progressive Corporation (NYSE:PGR) has continuously produced returns that lead the industry. However, due to the recent ups and downs in the auto insurance market, the company has experienced quite a bit of volatility.

The Progressive Corporation (NYSE:PGR) produced impressive results in the third quarter, with GAAP EPS of $3.97, $0.08 more than expected, and revenue of $19.46 billion, a 27% year-over-year growth. Since it paid out less in claims and expenses than it made in premiums, the company’s combined ratio of 89% showed profitability. Strong demand and more media spending drove Progressive to add a record 1.6 million new policies. Record-high direct channel applications and enhanced customer conversions led to strong growth in both direct and agency channels, setting up the business for long-term increases in market share.

The price objective for The Progressive Corporation (NYSE:PGR) was boosted by Wells Fargo from $299 to $302, and the firm maintained its Overweight rating on the shares. According to the firm, Progressive is well-positioned to grow and continue to gain market share as long as interest rates stay steady and margins are at all-time highs.

Andreas Halvorsen’s Viking Global was the largest stakeholder in the company among the funds in Insider Monkey’s database. It owns 3.49 million shares worth $884.58 million as of Q3.

Bretton Fund stated the following regarding The Progressive Corporation (NYSE:PGR) in its Q3 2024 investor letter:

“We think The Progressive Corporation (NYSE:PGR) is the most sophisticated auto insurer in the business. It leverages its vast amount of driver data and is usually one of the first in the industry to recognize important shifts in things like driver behavior and collision costs. Progressive was one of the first to raise rates aggressively in 2021 to offset the higher costs from the more frequent car crashes and higher repair costs post-Covid. By raising prices before its competitors did, Progressive lost customers and wasn’t able to grow as fast as it usually does. The rest of the industry has since caught up and increased rates. Progressive’s rates are now comparatively attractive once again, and that’s led to highly profitable growth. Through September 30, its premiums are up 20% over last year, which is great for a low-growth industry like auto insurance. Progressive added 1.5% to the fund this quarter.”

5. Bank Of America Corporation (NYSE:BAC) 

Number of Hedge Fund Holders: 98        

One of the Best Financial Stocks, Bank Of America Corporation (NYSE:BAC), has over $3.0 trillion in assets, making it one of the biggest financial institutions in the US. It is divided into four primary categories: consumer banking, global wealth and investment management, global banking, and global markets. The consumer-facing business segments of the company comprise its branch network and deposit-gathering operations, retail lending products, credit and debit cards, and services for small businesses. Both the firm’s private bank and Merrill Lynch operations offer wealth management and brokerage services. Investment banking, corporate and commercial real estate loans, and capital markets operations are all wholesale lines of business. Although Bank Of America Corporation (NYSE:BAC) operates in several countries, its primary focus is the United States.

Bank Of America Corporation (NYSE:BAC) has become one of the leading US banking franchises after years of problems during the 2008 financial crisis. The bank is a Tier 1 investment bank, a top four US credit card issuer, a top three US acquirer, has a strong commercial banking franchise, and owns the Merrill Lynch franchise, which has grown to become one of the top US brokerage and advisory firms. It also boasts one of the best retail branch networks and overall retail franchises in the US.

Bank of America (NYSE: BAC) makes a strong bull case with its diverse businesses and outstanding Q3 of 2024 earnings, which reported $25.49 billion in revenue, slightly above expectations. The bank benefited from Wall Street’s activity, with fixed-income trading revenue jumping by 8% YoY to $2.9 billion and equities trading up 18% YoY to $2 billion, both exceeding expectations. Investment banking fees increased by 18% to $1.4 billion, showing strength in advisory operations.

Evercore ISI maintained its Outperform rating on Bank Of America Corporation (NYSE:BAC) shares and increased its price objective from $45 to $53. The analyst notes that after a “pretty strong” September and October, investment banking activity levels continued to decline into December, and that equity markets sold off by roughly 2% in December in “a post-post-election breather driven largely by the realization” that rate cuts might not be as imminent as thought. In a Q4 forecast for the big banks’ group, the analyst stated that although December cooled, the firm anticipates a robust start to 2025 because Evercore generally views recovery in investment banking as a “when, not if” story.

Warren Buffett’s Berkshire Hathaway was the largest stakeholder in the company among the funds in Insider Monkey’s database. It owns 797.68 million shares worth $31.65 billion as of Q3.

4. JPMorgan Chase & Co. (NYSE:JPM) 

Number of Hedge Fund Holders: 105

One of the Best Financial Stocks JPMorgan Chase & Co. (NYSE:JPM), with assets of around $4.1 trillion, is one of the biggest and most complex financial firms in the US. It is divided into four key segments: consumer and community banking, corporate and investment banking, commercial banking, and asset and wealth management. The company is regulated in many countries where it conducts business.

JPMorgan Chase & Co. (NYSE:JPM) is perhaps the most dominant bank in the United States, with leading franchises in investment banking, commercial banking, credit cards, retail banking, and asset and wealth management. Though few other businesses have been able to implement a similar approach, the bank’s combination of scale, diversity, and careful risk control is a straightforward route to competitive advantage. Although even the most effectively managed banks occasionally make errors, the business has appeared to be able to put everything together more effectively and with fewer mistakes than its competitors.

JPMorgan Chase & Co. (NYSE:JPM)’s Q3 of 2024 revenue increased by 6% year on year to $43.3 billion, led by a rise of 31% YoY in investment banking fees, a 27% YoY increase in equity market revenue, and a 15% YoY increase in asset management fees. While assets under management increased by 23% to $3.9 trillion, consumer card loans increased by 11%. The firm maintained its top spot in retail deposit share for four years in a row. Higher interest rates and the expansion of loans drove the firm’s Q3 2024 net interest income, which increased 30% year over year to $22.9 billion.

Glenn Schorr, an analyst at Evercore ISI, increased his price target for JPMorgan Chase & Co. (NYSE:JPM) from $238 to $264 on January 2, 2025, and maintained his Outperform rating for the company’s shares. The analyst notes that after a “pretty strong” September and October, investment banking activity levels continued to decline into December, and that equity markets sold off by roughly 2% in December in “a post-post-election breather driven largely by the realization” that rate cuts might not be as imminent as thought.

Ken Griffin’s Citadel Investment Group was the largest stakeholder in the company among the funds in Insider Monkey’s database. It owns 16.78 million shares worth $3.54 billion as of Q3.

3. Berkshire Hathaway Inc. (NYSE:BRK.B) 

Number of Hedge Fund Holders: 120

One of the Best Financial Stocks, Berkshire Hathaway Inc. (NYSE:BRK.B) is a holding firm that has several distinct subsidiaries that do a variety of activities. The company’s primary business is insurance, which is mostly handled by Geico, Berkshire Hathaway Primary Group, and Berkshire Hathaway Reinsurance Group. Over the years, Berkshire has used the surplus funds from these and other businesses to buy Burlington Northern Santa Fe (a railroad), Berkshire Hathaway Energy (a distributor of utilities and energy), and the businesses that comprise its manufacturing, service, and retailing businesses (including five of its biggest noninsurance pretax earnings generators: Precision Castparts, Lubrizol, Clayton Homes, Marmon, and IMC/ISCAR).

The conglomerate is distinct in that it operates entirely decentralized. In 2024, the company ended the year up more than 23.0%.

Berkshire Hathaway Inc. (NYSE:BRK.B) reported solid growth in net earnings for Q3 2024, hitting $26.3 billion, as opposed to a loss of $12.8 billion in Q3 2023, fueled by significant investment gains of $16.2 billion. Operating earnings remained resilient at $10.1 billion, backed by insurance investment income growth of 48% YoY to $3.7 billion. The insurance float rose by $5 billion to $174 billion, and the $2.9 billion share repurchase shows smart capital usage.

Results were also strengthened by growth in BNSF and Berkshire Hathaway Energy. In Q3 of 2024, Berkshire Hathaway Energy reported a huge jump in earnings, hitting $1.63 billion, up from $498 million in Q3 2023, marking a 227% increase. BNSF saw earnings jump to $1.38 billion, compared to $1.22 billion in Q3 2023, showing a 13% growth YoY.

2. Mastercard Incorporated (NYSE:MA)

Number of Hedge Fund Holders: 131

In 2023, Mastercard Incorporated (NYSE:MA), one of the Best Financial Stocks, processed about $9 trillion in transactions, making it the second-largest payment processor globally. The business maintains excellent operating margins, benefits from increased travel, and excels at digital and cross-border payments. The firm processes transactions in more than 150 currencies and has operations in more than 200 countries.

Despite inflation and market challenges, the company has shown strong growth and profitability. Although competition and regulatory scrutiny are risks, Mastercard Incorporated (NYSE:MA) is well-positioned for future growth due to its innovative and strategic investments.

Mastercard Incorporated (NYSE:MA)’s sustainability can be seen in recent financial results. In Q3 of 2024, strong consumer spending and better global macroeconomic conditions drove a 13% YoY growth in revenue. The 10% YoY growth in gross dollar volume and the 17% YoY increase in cross-border volumes point to travel-related and overall spending still being on the rise. Revenue from value-added services increased by 18%, outpacing overall growth, while operating margins increased to 59.3%, resulting in a 16% increase in EPS. The firm continues to provide strong shareholder returns, as seen by its $12 billion authorization for a new share buyback and its $12 billion annual free cash flow. Operating cash flow increased by 58.86% YoY.

James Faucette, an analyst at Morgan Stanley, increased the price objective from $564 to $654 on Mastercard Incorporated (NYSE:MA). According to the company’s 2025 forecast statement, its attractive payments and processing market picture is predicated on a number of factors, including a demand for more M&A, quicker investment in competitive strengths, younger consumer preferences, improved investor optimism, and lessened regulatory scrutiny.

Ken Griffin’s Citadel Investment Group was the largest stakeholder in the firm among the funds in Insider Monkey’s database. It owns 4.12 million shares worth $2.03 billion as of Q3.

Montaka Global Investments stated the following regarding Mastercard Incorporated (NYSE:MA) in its Q3 2024 investor letter:

“Montaka owns several duopolists in the financial services industry, including Visa and Mastercard Incorporated (NYSE:MA) in payments; and S&P Global in credit ratings and financial data services. These businesses have competitively protected and reliably growing core businesses. But they also have newer, high-probability adjacent opportunities. The market, however, is underappreciating this powerful combination, in our view.

For Visa and Mastercard, their core businesses in global payment processing are being complemented by significant growth in two areas: New processing opportunities in peer-to-peer, business-to-business, business-to-consumer, and government-to-consumer payments; and Value-added services, including risk, fraud-detection, issuance, acceptance, and open banking.”

1. Visa Inc. (NYSE:V)

Number of Hedge Fund Holders: 165

Visa Inc. (NYSE:V) is the world’s largest payment processor. It handled about $15 trillion in total volume in fiscal 2023. The firm handles transactions in more than 160 currencies and operates in more than 200 countries. Its systems can handle more than 65,000 transactions in a second. In 2024, the stock increased by about 18%, making it the best financial stock.

Visa Inc. (NYSE:V) is typically connected with credit and debit cards; however, it does not issue or manage any of these accounts. To issue Visa-branded cards, it solely collaborates with banks and other financial institutions; accounts are managed by their partners.

In Q4 of 2024, the company reported a 12% year-over-year growth in net revenue of $9.6 billion, with a 16% increase in earnings per share. Expectations were met as net sales expanded by 10% and EPS improved by 15% over the fiscal year. The company reported considerable growth in new flows, with revenue up 22% year on year in constant dollars, driven by a rise of 38% in Visa Direct transactions. Revenue from value-added services increased by 22% in constant dollars as well. Visa secured 650 new business partnerships while expanding and renewing important ones, such as deals with Grupo Promerica, SMCC, Alrajhi, Standard Chartered Bank, RBC, Americas Bank, and USAA. Innovations in payment solutions, including the forthcoming Flexible Credential solution and Visa A2A for account-to-account payments, highlight the company’s dedication to technical advancement. Furthermore, in fiscal 2024, there were over 2 billion tap-to-ride transactions globally, a 25% increase from the previous year, showing Visa Inc. (NYSE:V)’s dominance in contactless payments.

Wells Fargo maintained its Overweight rating on Visa Inc. (NYSE:V) shares and increased its price objective from $325 to $360. The company is optimistic about consumer finance companies based on the Q4 results, stating that there are regulatory catalysts and that consumer metrics are trending stronger. In a research report, the analyst informs investors that modestly increased interest rates do not dissuade stocks or fundamentals. Wells believes with “high conviction the rally is to resume for the card issuer and network stocks.”

Chris Hohn’s TCI Fund Management was the largest stakeholder in the company from among the funds in Insider Monkey’s database. It owns 16.80 million shares worth $4.62 billion as of Q3.

Qualivian Investment Partners stated the following regarding Visa Inc. (NYSE:V) in its Q3 2024 investor letter:

“Visa Inc. (NYSE:V): FQ3 2024 revenues and EPS came inline versus consensus estimates with revenue and EPS growing 10% and 12% respectively. Payment volume increased by 7% and the highly profitable cross border volume increased by 14%. Operating margins at 67.1% missed consensus expectations at 67.4%. Management’s commentary on consumer spending for the back half of 2024 suggested a cautious but stable backdrop. Similar to our thoughts on MA, while we do not view V as immune to the macro backdrop, we continue to expect that over the longer term, it will continue to drive and benefit from the digitization of payments globally.

Overall, Visa Inc. (NYSE:V) ranks first on our list of the 10 Best Financial Stocks To Buy According to Hedge Funds. While we acknowledge the potential for V to grow, our conviction lies in the belief that some 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 V but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. 10 Best Financial Stocks To Buy According to Hedge Funds is originally published on Insider Monkey. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.