In this article, we’re going to talk about the 10 Best Quality Stocks to Buy According to Analysts.
Income-Focused Investing
The stock market has seen a notable 20% increase year-to-date, but as it approaches the seasonally volatile months leading up to Election Day, potential volatility is expected. The S&P 500 has historically pulled back 5% to 10% around election time but tends to recover afterward.
Instead of cashing out, investors are encouraged to take advantage of any market pullbacks. Historically, when the Fed cuts rates without an impending recession, it creates a favorable environment for broader market performance. Mona Mahajan, Edward Jones senior investment strategist, recently appeared on CNBC to discuss her similar sentiment on these latest market trends, and where investors can find opportunities right now. We talked about this in our article about the 10 Best WallStreetBets Stocks To Buy Right Now, here’s an excerpt from it:
“When asked if investors should consider cashing out and taking a holiday for the remainder of the year, Mahajan advised against such a move. Instead, she suggested that if there are pullbacks or corrections in the market, it would be prudent to lean into those opportunities… Additionally, rate cuts typically lead to expanded valuations, particularly for sectors that have lagged behind in this regard. She emphasized that lower borrowing costs from Fed rate cuts would benefit both consumers and corporations.
In terms of investment strategies during potential downturns, she recommended focusing on cyclical sectors such as utilities and industrials while also maintaining exposure to technology and the artificial intelligence sectors. Mahajan underscored that diversification would be key over the next 12 to 18 months.”
Global Investment Strategist at ProShares Advisors, Simeon Hyman, appeared on CNBC on October 2 to emphasize ‘income’ as a key focus, highlighting the opportunity in fixed-income markets, which could provide 10-15% returns if geopolitical tensions worsen. He thinks that the US economy is stronger than the rest of the world despite tensions.
Simeon Hyman emphasized the importance of the term ‘income’ in the context of current market conditions, noting that the market was just 1% off its all-time highs. This situation presents a salary cut for income-oriented investors, highlighting the challenges they face. However, the fixed-income market offers a silver lining; it currently provides enough yield to cushion against worsening geopolitical tensions. For instance, the yield on the 10-year bond is nearly 4%, and there is potential for it to drop to 3% or lower if significant negative events occur. This scenario presents an opportunity for investors to realize gains of 10% or 15% on bonds in a tumultuous environment, a situation not seen in over a decade.
Despite the current market being down by 3.7%, which is slightly less than 4%, Hyman insisted that rounding was at play. He expressed surprise at this performance given ongoing geopolitical tensions but pointed out that positive economic news in the US persists. Specifically, there has been a 50-basis point cut and indications of a soft landing for the economy. A month-over-month increase of just 0.1% suggests that if one can overlook geopolitical issues, the US economy is faring better than many others globally and remains on solid economic footing.
Additionally, Hyman proposed a covered call strategy focused on the Russell 2000 index, which has been underperforming compared to the S&P 500. He described this strategy as beneficial because it allows investors to generate income that could offset recent losses while maintaining a bullish position in small caps. Historically, rate cuts have positively impacted small-cap stocks, and this strategy enables investors to capitalize on that trend while also generating income through covered calls.
For risk-averse investors, the current emphasis on fixed-income markets as a viable investment option aligns well with the insights shared by Simeon Hyman, who highlighted the potential for 10-15% returns in bonds amid geopolitical tensions. Additionally, they may also explore quality stocks with reliable growth histories, which can provide stability in uncertain market conditions, similar to the defensive strategies Hyman suggested. As investors try to track stock performances to find strategies, we’re here with a list of the 10 Best Quality Stocks to Buy According to Analysts.
Methodology
To compile our list, we first sifted through Vanguard U.S. Quality Factor ETF holdings to find the ones with an upside potential of over 15% as of October 4, 2024. We then selected the 10 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of their analysts’ upside potential.
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 Best Quality Stocks to Buy According to Analysts
10. IDEXX Laboratories Inc. (NASDAQ:IDXX)
Average Upside Potential: 17.89%
Number of Hedge Fund Holders: 41
IDEXX Laboratories Inc. (NASDAQ:IDXX) is engaged in the development, manufacture, and distribution of products and services for companion animal veterinary, livestock and poultry, water testing, and dairy markets. It’s a global leader in the pet healthcare industry, helping veterinarians provide better care for their patients and improve animal health outcomes.
The company made $1 billion in revenue for the second quarter of 2024, representing 6.35% year-over-year growth, driven by solid gains across various regions. In the US, rapid assay revenues expanded 6% organically, supported by higher net price realization. Global lab revenues also saw a 6% increase, with the US leading the growth. Internationally, single-digit growth was observed in lab revenues.
Veterinary software and diagnostic imaging revenues surged 12% organically, boosted by a recent Greenline software and data platform acquisition. Recurring revenues, driven by cloud-based software placements, contributed significantly to the overall 8% organic revenue growth. Water revenues experienced double-digit gains in the US and continued solid growth in Europe, leading to a 10% organic increase. Livestock, poultry, and dairy revenues grew 3% organically.
However, near-term macro and sector headwinds constrained diagnostic recurring revenue growth in this period, contributing to a 2% decline in US same-store clinical visit growth levels. But IDEXX Laboratories Inc. (NASDAQ:IDXX) is still progressing in growing its business and innovating, despite facing challenges from current economic conditions and industry trends.
While near-term challenges may persist, the company’s leadership in the pet healthcare industry, combined with its focus on innovation and growth, positions it well for continued success in the future.
Baron Partners Fund stated the following regarding IDEXX Laboratories, Inc. (NASDAQ:IDXX) in its Q2 2024 investor letter:
“Shares of veterinary diagnostics leader IDEXX Laboratories, Inc. (NASDAQ:IDXX) detracted from performance. Foot traffic to veterinary clinics in the U.S. remains uneven, which will modestly hamper aggregate revenue growth. Despite this, IDEXX’s excellent execution has enabled the company to continue to deliver robust financial results. We believe IDEXX’s competitive trends are outstanding, and we expect new proprietary innovations and field sales force expansion to be meaningful contributors to growth in 2024. We see increasing evidence that long-term secular trends around pet ownership and pet care spending have been structurally accelerated, which should help support IDEXX’s long-term growth rate.”
9. Applied Materials Inc. (NASDAQ:AMAT)
Average Upside Potential: 20.25%
Number of Hedge Fund Holders: 77
Applied Materials Inc. (NASDAQ:AMAT) supplies equipment, services, and software for the manufacture of semiconductor chips for electronics, flat panel displays for computers, smartphones, televisions, and solar products. It provides a wide range of products and services, including deposition systems, etch systems, and inspection systems.
For the past 5 years, the company built new capabilities and dedicated teams focused on module integration, device design and simulation, data analytics and AI, advanced packaging, and ICAPS. It grew its revenue by 5.49% year-over-year to make $6.78 billion in FQ3 2024. This growth was driven by demand for the company’s unique and connected portfolio of products and services, which has positioned it to outperform the market over the long term.
Semiconductor Systems sales were up 5% year-over-year. DRAM sales grew nearly 50%. DRAM sales in China declined sequentially as management had anticipated, and this contributed to the company revenue in China declining by 11% sequentially, which is in line with the longer-term average inclusive of Semi Systems, AGS, and Display. NAND memory sales grew by 10%.
Foundry-logic sales were down 4% year-over-year. Leading-edge foundry-logic demand was lower year-over-year but continued to strengthen on a sequential basis. Despite the challenges faced by Applied Materials Inc. (NASDAQ:AMAT), many analysts remain optimistic about its future prospects. The company’s strong growth potential, particularly over the next few years, positions it as a compelling investment.
Parnassus Growth Equity Fund stated the following regarding Applied Materials, Inc. (NASDAQ:AMAT) in its Q2 2024 investor letter:
“Applied Materials, Inc. (NASDAQ:AMAT) is the world’s largest supplier of wafer fabrication technologies used in semiconductor manufacturing. The company reported solid earnings for the quarter, and investors believe Applied Materials should continue to benefit from accelerated industry spend due to AI and share gains.”
8. Target Corp. (NYSE:TGT)
Average Upside Potential: 20.32%
Number of Hedge Fund Holders: 52
Target Corp. (NYSE:TGT) operates a chain of discount department stores and hypermarkets and is the seventh-largest retailer in the US. It’s known for its convenient locations, competitive prices, and a variety of exclusive brands. It also offers online shopping and in-store pickup options for added convenience.
Earlier this year, the company integrated GenAI into the handheld devices in its stores, providing its team with rapid access to best practice documentation and the ability to quickly receive straightforward responses to common customer questions. Team members have used the technology over 50,000 times since its full roll-out, giving answers in less than a minute.
Revenue amounted to $25.45 billion in the second quarter of fiscal 2025, up 2.75% from a year-ago period, driven entirely by traffic. Its digital sales grew, with same-day services like Target Circle 360 and Drive Up growing even faster. These services make up most of its digital sales and give it an advantage over competitors. Drive Up is especially successful, bringing in over $2 billion in FQ2 and over $4 billion so far this year. Overall, the stores and online sales are doing well, and more people are shopping at the company. Sales in clothing, one of its main categories, increased by 3%.
Target Corp.’s (NYSE:TGT) loyalty program, Target Circle, grew by 2 million new members in the quarter, reaching 100 million total members. During a promotion in July, it added hundreds of thousands of new cardholders and Target Circle 360 members.
The company donated $2.5 million this year to help communities affected by disasters. After Hurricane Beryl, Target Corp. (NYSE:TGT) supported the Red Cross, Team Rubicon, and other organizations to provide aid to people in Houston.
Diamond Hill Large Cap Strategy stated the following regarding Target Corporation (NYSE:TGT) in its Q2 2024 investor letter:
“Other bottom contributors in Q2 included CarMax, Target Corporation (NYSE:TGT) and ConocoPhillips. US-based mass retailer Target faces concerns about a slowing consumer discretionary spending environment, which weighed on shares in the quarter.”
7. Amazon.com Inc. (NASDAQ:AMZN)
Average Upside Potential: 20.91%
Number of Hedge Fund Holders: 308
Amazon.com Inc. (NASDAQ:AMZN) is engaged in e-commerce, cloud computing, online advertising, digital streaming, and artificial intelligence. It’s the world’s largest online marketplace, offering a vast selection of products across various categories. It also provides cloud computing services through AWS, streaming services like Prime Video and Music, and hardware products like Kindle and Echo.
AWS, its most profitable part, has over 30% profit margins and is expected to grow by 15% to 21% each year until 2028, so its success is important for the company’s future profits. AWS grew by 18.8% in Q2 2024. Amazon Prime has become very successful, with 200 million members worldwide. It helps customers spend more and is almost $100 billion per year.
The company is making money from ads on its content. The ad business is now worth $50 billion, after AWS. Evercore ISI thinks Amazon Prime Video could make between $1.8 and $3.3 billion in profit by 2025, which could increase its total profit by 3% to 5% this year.
Physical stores, like Whole Foods, are the smallest part of Amazon’s business and aren’t growing very fast. Amazon.com Inc. (NASDAQ:AMZN) has invested $30.5 billion in capital expenditures this year and expects more spending in the second half. This is driven by growing AI demand. Investors are confident in its future, especially AWS, which has a $156.6 billion backlog and improved profitability to over 30%. These factors add up to make it a great investment opportunity.
Meridian Hedged Equity Fund stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q2 2024 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN) is a global technology company that operates e-commerce, cloud computing, digital advertising, and other businesses. We own Amazon because we believe it is well-positioned to benefit from several strong secular trends, including the shift to online shopping, the growth of cloud computing, and the increasing importance of digital advertising. The company exceeded expectations in the first quarter, with cloud-computing revenue growth accelerating, driven by easing cost optimization pressures and the ramp of generative AI workloads. The North American retail segment drove record operating margins, highlighting the success of Amazon’s efforts to improve efficiency and lower its cost to serve. International retail also showed promise, as emerging markets steadily progressed towards profitability. Given the strength across these key segments, we continue to hold the position in the company.”
6. NVIDIA Corp. (NASDAQ:NVDA)
Average Upside Potential: 22.10%
Number of Hedge Fund Holders: 179
NVIDIA Corp. (NASDAQ:NVDA) is known for its high-performance GPUs, which are widely used in gaming, artificial intelligence, data centers, and professional visualization. Its GPUs are essential for powering advanced graphics and computing tasks, and they are a key component in many modern technologies, such as self-driving cars, virtual reality, and supercomputers.
The company recently partnered with Accenture. Management recently talked about this partnership and its new AI chip, Blackwell. Blackwell is now being made in large numbers, and there is a lot of demand for it. AI will help businesses innovate faster through the partnership with Accenture. In late August, management also approved a $50 billion share buyback program.
NetApp released a new AI tool on September 25 that uses NVIDIA technology to help businesses manage their data. Elon Musk’s company, xAI, is using 100,000 NVIDIA H100 GPUs for its AI project, Colossal. Colossal may grow to use H200 GPUs and Blackwell chips in the future.
Its networking platform for AI, Spectrum X, is expected to be worth billions of dollars within a year. The company recently partnered with Salesforce to help businesses use AI and data better. In September, the company also introduced a new AI tool called Aerial to improve wireless networks for mobile devices, robots, self-driving cars, and 5G.
Its software called CUDA gives it an advantage over competitors. However, the company’s future depends on continuing to innovate and find ways to make money from AI. CUDA is a tool that helps developers use GPUs for different kinds of computing. Experts think the company should focus more on robotics to grow.
Columbia Contrarian Core Fund stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q2 2024 investor letter:
“NVIDIA Corporation (NASDAQ:NVDA) – Following the release of first-quarter earnings in May featuring record revenue growth of 262% year over year, NVIDIA continued its upward march. On June 10, shares of the company began trading on a split-adjusted basis following a 10-for-1 forward stock split, making stock ownership more accessible to employees and investors alike. Just one week later, the company officially surpassed Microsoft in market cap to become the most valuable publicly traded company (although it would relinquish the title not long after). While other companies have also stood to benefit from the artificial intelligence (AI) trend this year, NVIDIA stands out as the unquestionable leader in the space and that is unlikely to be challenged for many years ahead. NVIDIA continues to see extremely strong levels of demand and the recent introduction of the Blackwell system looks to be an exciting next phase of growth for the stock.”
5. SLM Corp. (NASDAQ:SLM)
Average Upside Potential: 22.67%
Number of Hedge Fund Holders: 24
SLM Corp. (NASDAQ:SLM) provides consumer banking. Initially, a government entity that serviced federal education loans, it then became private and began offering private student loans. It now offers both private student loans and federal student loans, as well as refinancing options for existing loans, to make education more affordable and accessible.
The company had strong business performance, better credit quality, and a gain from selling a loan in Q2 2024. It made $691 million in new loans in the second quarter, 6% more than last year. A gain of $112 million was realized from a loan sale. The average FICO score of borrowers increased from 747 to 752, and more borrowers are using cosigners, 80% in Q2 2024 compared to 76% in Q2 2023. The credit performance has improved with net charge-offs on private education loans lower year-over-year at 2.19% of average private education loans in repayment.
Despite such improvements, revenue in the second quarter of 2024 was down 3.74% from a year-ago period, accounting for $372.17 million in revenue. FAFSA completion rates are down 11% through mid-July this year, but management expects this to improve. This of course impacts enrollments negatively. However, new enrollments in programs are normalizing. Most borrowers have exited the extended grace program. Delinquencies are as expected. Loan modification programs are successful, with 84% of borrowers making payments now, compared to 64% before COVID.
The company has demonstrated improved credit quality, effective loss mitigation programs, a strong capital position, and a commitment to returning value to shareholders through share repurchases. Its financial health and strategic initiatives suggest a promising future.
4. Lululemon Athletica Inc. (NASDAQ:LULU)
Average Upside Potential: 23.40%
Number of Hedge Fund Holders: 45
Lululemon Athletica Inc. (NASDAQ:LULU) designs and retails athletic clothing products. It offers a range of products for both men and women, including yoga pants, tops, jackets, and accessories, and is known for its innovative designs, comfortable fabrics, and commitment to sustainability. It sells through sold through different channels, including direct-to-consumer via e-commerce, company-operated stores, outlets, sales to wholesale accounts, recommence, license and supply arrangements, and sales from temporary locations. It also operates Lululemon Studio, which offers in-home connected fitness and related content subscriptions.
The second quarter of fiscal 2025 at the company saw a revenue growth of 7.33% year-over-year. Sales of men’s clothing increased by 11%, women’s by 6%, and accessories by 7%. It also bought back $584 million of its own stock in Q2, bringing the total to $1.2 billion this year. The total revenue generated was $2.37 billion.
The company is doing especially well in Asia. In China, revenue increased by 34% year-over-year. Some mistakes with products and inventory have slowed down innovation. It’s expected to grow its international revenue by 4x by the end of 2026. In the last quarter, international revenue grew by 29%, or 31% when adjusted for currency changes. It’s now working on new styles of tops, shorts, and tracksuits for 2025 to help it return to its previous level of new products before next spring.
It’s trying to double its sales from men’s clothing, online sales, and international sales by 2026, as a part of its plan called “Power of Three ×2.” It has a lot of cash and has reduced its inventory, which is good for future growth. As Lululemon Athletica Inc. (NASDAQ:LULU) continues expanding outside of North America, it is well-positioned for continued growth in the athleisure market. Despite recent challenges, it seems to have a promising future.
Middle Coast Investing stated the following regarding Lululemon Athletica Inc. (NASDAQ:LULU) in its Q2 2024 investor letter:
“I mentioned last quarter and higher above that I like buying quality stocks on sale. Lululemon Athletica Inc. (NASDAQ:LULU), the 2nd worst performer in the S&P 500 this year, qualifies. I published a full thesis on the stock before its most recent earnings, but the basics: the yoga pants and clothing company has had an amazing post pandemic run that is approaching its end. Its growth in the U.S. is slow/non-existent at the moment, but it is growing very fast in China and Europe. I think that international growth is likely to endure, and that its U.S. slowness is likely to be temporary. Lululemon shares are not ‘cheap’, but they are on sale for an average price, and I think the company will grow faster than average over the next five years. I would be wrong if Lululemon is a fad gone bust, or faces a huge post-pandemic hangover as people get used to leaving the house more. We’ll see.”
3. Qualcomm Inc. (NASDAQ:QCOM)
Average Upside Potential: 25.80%
Number of Hedge Fund Holders: 100
Qualcomm Inc. (NASDAQ:QCOM) creates semiconductors, software, and services related to wireless technology, and owns patents critical to the 5G, 4G, CDMA2000, TD-SCDMA, and WCDMA mobile communications standards. Its chipsets provide the essential processing power and connectivity for these devices, enabling features like fast internet, high-quality cameras, and advanced multimedia capabilities.
The company is working with Microsoft to sell laptops with AI features. These laptops are available in over 60 retailers in 25 countries. Its Snapdragon 8 Gen 3 chip can help smartphones do complex AI tasks, making them like personal assistants. Microsoft recently said that its Surface Laptop and Surface Pro will have Qualcomm Inc. (NASDAQ:QCOM) chips, which can do AI tasks even without the internet.
It’s doing well in the smartphone market with the Snapdragon Gen 3 chip. Sales to Chinese companies increased by over 40% in the first half of this year. Microsoft is working with other companies to make new laptops with AI features, called Copilot+ PCs. These laptops will be available for as little as $700 and will be very powerful.
The company started working with Honeywell, a defense company, in late September. Honeywell is developing a new AI tool for their mobile devices that will use Qualcomm Inc. (NASDAQ:QCOM) chips. This tool will let workers and customers in stores and warehouses use their devices with voice, pictures, and barcodes.
Earlier in late August this year, it bought some parts of Sequans, a French company that makes chips for the Internet of Things (IoT). This will help the company offer better solutions for IoT devices that need to connect to the internet reliably and use less power. Sequans said this deal will give them more money to invest in their IoT business. Qualcomm Inc. (NASDAQ:QCOM) is strategically positioned for robust growth, driven by its cutting-edge AI technologies and expanding presence in the automotive and IoT sectors.
O’keefe Stevens Advisory stated the following regarding QUALCOMM Incorporated (NASDAQ:QCOM) in its Q2 2024 investor letter:
“During the quarter, the A.I. rally broadened beyond the obvious players of Nvidia, AMD, and hyperscalers. QUALCOMM Incorporated (NASDAQ:QCOM), a long-standing investment, is gaining recognition for integrating artificial intelligence into mobile phones. Qualcomm’s A.I. on-device capabilities enable real-time language translation, improved voice recognition, and sophisticated imaging techniques as A.I. becomes more integral to mobile experiences. Qualcomm benefits by leading the market in providing robust, efficient, and versatile A.I. solutions. A.I. could be the first technology advancement in several years to accelerate the smartphone replacement cycle as users desire these advanced capabilities.”
2. Adobe Inc. (NASDAQ:ADBE)
Average Upside Potential: 26.04%
Number of Hedge Fund Holders: 107
Adobe Inc. (NASDAQ:ADBE) is best known for its Adobe Creative Cloud suite, which includes popular applications like Photoshop, Illustrator, Premiere Pro, and InDesign. Its software is used by professionals in various industries, including graphic design, photography, video editing, and web development. It also offers other products and services, such as Acrobat (for PDF creation and editing), Experience Cloud (for digital marketing), and Document Cloud (for document management).
The company has bought back 10% of its shares since it started a program to buy back $25 billion of its stock. It has a market share of over 80% in graphic design because it has been developing products for many years. In the third fiscal quarter of 2024, its total revenue grew 10.59% year-over-year, where the Digital Media segment grew by 12%, and the Digital Experience segment grew 12%.
Its revenue has grown by 15.26% per year over the past four years. AI features like Adobe Firefly have helped customers use Adobe’s products more and stay with them longer. Document Cloud sales reached $807 million in the FQ3 2024, 18% higher year-over-year. This shows how AI is helping Adobe Inc. (NASDAQ:ADBE). However, AI tools are becoming more common and cheaper, which could be a problem for the company. At the same time, it is spending a lot of money on AI to improve its products. How well Adobe uses AI will decide how successful it is in the future.
Adobe Inc. (NASDAQ:ADBE) has added over 100 AI features to its products, like Creative Cloud, Document Cloud, and Experience Cloud. Adobe’s Firefly AI models are becoming popular, and the Express mobile app with Firefly has increased the number of people using it every month. With a strong focus on AI integration and a large total addressable market, the company is expected to continue growing at a healthy rate.
Polen Global Growth Strategy stated the following regarding Adobe Inc. (NASDAQ:ADBE) in its Q2 2024 investor letter:
“With Adobe Inc. (NASDAQ:ADBE), in some ways, we see it as a microcosm of the market’s “shoot first, ask questions later” approach to categorizing AI winners and losers. In the early part of last year, Adobe came under pressure with a perception that generative AI (GenAI) would represent a material headwind to their suite of creative offerings. In short order, the company introduced its GenAI offering, Firefly, which shifted the narrative to Adobe as a beneficiary with a real opportunity to monetize GenAI in the near term. Earlier this year, that narrative was again challenged as the company reported a slight slowdown in revenue growth. Results in the most recent quarter were robust as the company raised its full-year forecast across a number of key metrics and showcased better-than-expected results.”
1. Merck & Co Inc. (NYSE:MRK)
Average Upside Potential: 27.06%
Number of Hedge Fund Holders: 96
Merck & Co Inc. (NYSE:MRK) delivers innovative health solutions through its prescription medicines, vaccines, biologic therapies, and animal health products. It has a strong focus on research and development, and its products are used to treat a wide range of diseases and conditions, including cancer, infectious diseases, cardiovascular diseases, and neurological disorders.
Its growth is partly due to a patent for KEYTRUDA that will expire in 2028. This could affect its growth in the future. Merck & Co Inc. (NYSE:MRK) bought Elanco’s aqua business to become a leader in animal health. In July, it bought EyeBio to enter the ophthalmology market and develop treatments for eye conditions. It also bought Prometheus Biosciences, which will help them develop new and advanced treatments.
Recently, the company got FDA approval for its new pneumococcal vaccine, CAPVAXIVE, for adults. It also got FDA approval for the WINREVAIR vaccine for adults with pulmonary arterial hypertension. This vaccine made over $70 million in sales in Q2 2024, with 40% coming from patient doses.
Its revenue grew by 7.16% in Q22024. Human Health grew by 11%, Animal Health grew by 6%, and KEYTRUDA, the cancer drug, grew by 21%. Sales of GARDASIL and VAXNEUVANCE also increased. The company is growing quickly in other countries. Buying Harpoon Therapeutics will help it develop new cancer treatments. All of these factors position Merck & Co Inc. (NYSE:MRK) well for continued success in the global healthcare market.
Regarding Merck & Co., Inc. (NYSE:MRK), Baron Funds’ Baron Health Care Fund made the following statement in its investor letter for the first quarter of 2024:
“Global pharmaceutical company Merck & Co., Inc. (NYSE:MRK), Inc. contributed to the continued growth of Keytruda, the company’s key asset and the leading immuno-oncology agent used to treat a variety of cancers. The FDA’s late March approval of pulmonary arterial hypertension drug sotatercept also drove share gains. We retain conviction as Merck has started to transition from prioritizing its Keytruda franchise to building a more diversified business, with a focus on the Gardasil vaccine, pneumococcal vaccine development, and cardiovascular drug development, well in advance of the scheduled expiration of patent protection/exclusivity rights.”
While we acknowledge the growth potential of Merck & Co Inc. (NYSE:MRK), our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than MRK but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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