In this article, we’ll explore the 10 Best Stocks to Buy According to Billionaire Ray Dalio.
Ray Dalio was born in 1949 and graduated from Long Island University in 1971. After a brief stint as a clerk on the New York Stock Exchange, he attended Harvard Business School and earned his MBA in 1973. That same year, he became the Director of Commodities at Dominick & Dominick LLC and later traded futures at Shearson Hayden Stone for a year. Dalio founded Bridgewater Associates in 1973 in his apartment. In July 2011, he stepped down as CEO but continued to work as a co-CIO alongside Robert Prince and Greg Jensen, taking on the title of “Mentor.”
Bridgewater Associates is notable for its focus on transparency and accountability. The firm promotes a culture where team members take responsibility for mistakes and learn from them. It encourages questioning and alignment, ensuring everyone regularly evaluates the validity of their ideas. This approach is crucial to the firm’s management style and investment strategies.
Ray Dalio Warns of U.S. Decline
Ray Dalio, founder of Bridgewater Associates, emphasized that since 1945, the United States has been the dominant global empire, but it is now in a state of relative decline. This decline isn’t just an opinion, it’s supported by concrete measures such as the nation’s share of global GDP, military strength, and the quality of its education system. These factors indicate that the U.S. is losing its position.
In addition to these, Dalio points out two other key elements that often disrupt world order: natural events like droughts, floods, and pandemics, which have historically caused more damage and upheaval than wars, and human creativity and technological innovation, which bring about substantial changes. Dalio believes all five factors are influencing the U.S. today. However, he stresses that the most critical issue is how people manage these challenges together.
The ability to address them intelligently and without creating further conflict is essential. If conflict arises, it could lead to a devastating outcome. But if people can come together and handle the situation effectively, the country can navigate these issues successfully. For Dalio, how society deals with one another is the number one factor in determining the future.
China Faces Economic Challenges and Urgent Need for Restructuring After Four Years of Change
In a recent Bloomberg interview, Ray Dalio also highlighted significant issues in China that have emerged over the past four years. He explained that China is in need of a major restructuring, as a large portion of individual spending, around 70%, was invested in real estate. With the decline in real estate, stocks, and salaries, people have become more cautious, reducing their spending and holding onto cash. In a deflationary environment, cash has become a relatively safe asset. This situation is affecting both households and businesses.
Dalio also pointed out that the government sector is facing serious challenges. Local governments, responsible for 83% of public spending, previously relied on land sales to generate revenue. With land sales drying up, these governments have accumulated significant debt, and now they’re struggling to pay it off. The key question is how to inject money into these local economies to keep them functioning. Dalio compared the situation to Japan’s struggles in 1990, noting that China’s challenges are even more severe and will require deep restructuring to resolve.
In addition to economic concerns, Dalio raised questions about property ownership and values. He referenced Deng Xiaoping’s famous statement, “It’s glorious to be rich,” and wondered if that sentiment still holds true in China today. The overall environment in the country is becoming more complex and difficult, as these economic and political issues intensify.
Dalio also emphasized the importance of being cautious when investing in China. He made it clear that every country goes through economic cycles, experiencing both highs and lows. According to Dalio, it’s crucial not to invest too heavily in any one country, including China, to avoid having it dominate your portfolio. Despite the challenges China faces, Dalio continues to invest there, but he stressed that the key consideration is the size and structure of the investment. Overall, his experience investing in China has been positive, though careful management is essential.
With that, let’s take a look at the 10 Best Stocks to Buy According to Billionaire Ray Dalio.
Ray Dalio of Bridgewater Associates
Our Methodology
We sifted through Bridgewater Associates’ Q2 2024 13F portfolio and picked the top 10 stocks held by the fund. We also added the total number of hedge fund investors per company, as of Q2 2024. The stocks are ranked in ascending order of Bridgewater Associates’ stake in them.
At Insider Monkey we are obsessed with 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 Stocks to Buy According to Billionaire Ray Dalio
10. The Coca-Cola Company (NYSE:KO)
Total Number of Shares Owned: 5,146,875
Total Value of Shares Owned: $327,598,594
Number of Hedge Fund Investors: 68
The Coca-Cola Company (NYSE:KO) is an attractive investment option, especially after its impressive Q2 2024 results, which showed revenue of about $12 billion, up 10% from the previous year. This growth comes from strong demand for its wide range of beverages, including both sparkling and non-sparkling drinks, as well as a recovery in sales at restaurants and cafes as people return to dining out. The Coca-Cola Company (NYSE:KO) is also adapting to changing consumer preferences by introducing healthier drink options, which helps attract health-conscious customers.
With a robust global distribution network, The Coca-Cola Company (NYSE:KO) effectively reaches customers in both developed and emerging markets, ensuring steady sales. The Coca-Cola Company (NYSE:KO) commitment to sustainability, including efforts to reduce plastic waste, appeals to environmentally minded consumers. Additionally, The Coca-Cola Company (NYSE:KO) consistently pays dividends and has a track record of increasing them, making it appealing to investors looking for income.
Overall, The Coca-Cola Company (NYSE:KO)’s strong earnings growth, product innovations, effective distribution, sustainability efforts, and commitment to returning value to shareholders make it a solid choice for investors. Bridgewater Associates owns 5,146,875 shares of The Coca-Cola Company (NYSE:KO), valued at $327.6 million.
9. Costco Wholesale Corporation (NASDAQ:COST)
Total Number of Shares Owned: 440,819
Total Value of Shares Owned: $374,691,742
Number of Hedge Fund Investors: 71
Costco Wholesale Corporation (NASDAQ:COST) is an appealing investment due to its strong performance in Q2 2024, where it achieved around $57.2 billion in revenue, marking an 8% increase from the previous year, along with a 6% rise in same-store sales. A key strength of Costco Wholesale Corporation (NASDAQ:COST) is its membership model, which keeps renewal rates above 90%, ensuring a loyal customer base and steady income. By offering high-quality products at competitive prices, Costco Wholesale Corporation (NASDAQ:COST) attracts budget-conscious shoppers, especially during times of inflation.
Costco Wholesale Corporation (NASDAQ:COST) has also improved its online shopping experience, leading to significant growth in digital sales, which is likely to continue as more consumers shop online. Additionally, Costco Wholesale Corporation (NASDAQ:COST)’s efficient supply chain allows it to maintain low prices, further drawing in customers. With plans to open new warehouses, Costco Wholesale Corporation (NASDAQ:COST) is well-positioned for future growth.
Bridgewater Associates holds 440,819 shares of Costco Wholesale Corporation (NASDAQ:COST), valued at $374.7 million.
8. Walmart Inc. (NYSE:WMT)
Total Number of Shares Owned: 6,515,350
Total Value of Shares Owned: $441,154,348
Number of Hedge Fund Investors: 95
Walmart Inc. (NYSE:WMT) stands out as an attractive investment due to its strong performance in Q2 2024, where it reported a 5% increase in revenue, reaching about $160 billion. This growth was driven by a notable 6% rise in same-store sales in the U.S., showing that customers are eager to shop at Walmart Inc. (NYSE:WMT). Walmart Inc. (NYSE:WMT) ‘s e-commerce sales also grew by 11%, highlighting the success of its investments in online shopping and delivery services. As a leader in grocery sales, Walmart Inc. (NYSE:WMT) is benefiting from the shift towards more at-home dining, providing a stable revenue source that can withstand economic challenges.
Walmart Inc. (NYSE:WMT)’s focus on cutting costs and improving operations has helped maintain its profit margins, even amid supply chain issues. Additionally, its expansion into international markets like Mexico and India offers exciting growth opportunities for the future. Walmart Inc. (NYSE:WMT)’s commitment to paying dividends consistently makes it appealing to investors seeking steady income. Furthermore, Walmart Inc. (NYSE:WMT)’s reputation for low prices positions it well during inflation, attracting more shoppers. With ongoing efforts in sustainability and enhancements in customer service, Walmart Inc. (NYSE:WMT) is well-equipped for continued success, making it a solid investment choice.
Bridgewater owns 6,515,350 shares of Walmart Inc. (NYSE:WMT), worth $441.2 million.
7. Johnson & Johnson (NYSE:JNJ)
Total Number of Shares Owned: 3,204,305
Total Value of Shares Owned: $468,341,219
Number of Hedge Fund Investors: 80
Johnson & Johnson (NYSE:JNJ) ranks 7th in our list of the 10 best stocks to buy according to billionaire Ray Dalio. In Q2 2024, Johnson & Johnson (NYSE:JNJ) reported revenues of $21.1 billion, a 6% increase from last year, with net income at $5.2 billion. This growth was primarily driven by solid performance in its pharmaceuticals and medical devices divisions, which have remained resilient despite market challenges.
A major factor in Johnson & Johnson (NYSE:JNJ)’s success is its strong pipeline of innovative products, especially in immunology and oncology, with a recent approval for a new cancer treatment expected to boost sales. Johnson & Johnson (NYSE:JNJ) is also focusing on expanding in emerging markets, where the demand for healthcare products is growing quickly. Additionally, Johnson & Johnson (NYSE:JNJ) is committed to sustainability and corporate responsibility, setting goals to reduce its environmental impact and improve access to healthcare, which appeals to socially conscious investors.
Bridgewater’s stake in Johnson & Johnson (NYSE:JNJ) includes 3,204,305 shares, valued at $468.3 million.
6. Meta Platforms Inc. (NASDAQ:META)
Total Number of Shares Owned: 962,410
Total Value of Shares Owned: $485,266,370
Number of Hedge Fund Investors: 219
Ranking 6th in our list of the 10 best stocks to buy according to billionaire Ray Dalio is Meta Platforms, Inc. (NASDAQ:META). In Q2 2024, Meta Platforms, Inc. (NASDAQ:META) reported $32 billion in revenue, a 15% increase from the previous year, with net income of $10 billion. This increase was largely fueled by a 20% rise in advertising revenue as more brands invest in digital marketing on Meta Platforms, Inc. (NASDAQ:META). A major part of this success comes from Meta Platforms, Inc. (NASDAQ:META)’s focus on innovation, especially by using artificial intelligence to improve advertising, allowing for better targeting and higher returns for advertisers.
Additionally, Meta Platforms, Inc. (NASDAQ:META) is making strides in the metaverse, recently launching new virtual reality products and updating its Horizon Worlds platform, which could create new revenue opportunities in the future. Meta Platforms, Inc. (NASDAQ:META) is also committed to enhancing user safety and privacy, which helps build trust with consumers and meets regulatory standards. Overall, Meta Platforms, Inc. (NASDAQ:META)’s solid financial performance, innovative advertising strategies, ambitious plans for the metaverse, and dedication to user safety make a strong case for future growth.
Bridgewater Associates holds 962,410 shares of Meta Platforms Inc.(NASDAQ:META), worth $485.3 million.
5. Microsoft Corporation (NASDAQ:MSFT)
Total Number of Shares Owned: 1,090,347
Total Value of Shares Owned: $487,330,592
Number of Hedge Fund Investors: 279
Microsoft Corporation (NASDAQ:MSFT) ranks 5th in our list of the 10 best stocks to buy according to billionaire Ray Dalio. In Q2 2024, Microsoft Corporation (NASDAQ:MSFT) reported revenues of $57.4 billion, which is a 13% increase from last year, with net income reaching $20.3 billion. A big part of this growth came from its cloud services, especially Azure, which saw a remarkable 30% increase in revenue to $25.5 billion, showcasing Microsoft Corporation (NASDAQ:MSFT)’s strength in the cloud market.
Another key factor in Microsoft Corporation (NASDAQ:MSFT)’s success is its investment in artificial intelligence. Microsoft Corporation (NASDAQ:MSFT) has integrated AI features into products like Microsoft 365 and Dynamics 365, making them more user-friendly and boosting productivity. Partnerships with organizations like OpenAI also enhance Microsoft Corporation (NASDAQ:MSFT)’s position in the AI field.
Additionally, Microsoft Corporation (NASDAQ:MSFT)’s gaming division is thriving, with Xbox revenue growing by 18% year-over-year, fueled by the popularity of Game Pass and strategic acquisitions of gaming studios. Microsoft Corporation (NASDAQ:MSFT) is also committed to sustainability and social responsibility, working to reduce carbon emissions and promote responsible use of AI.
Bridgewater’s investment in Microsoft Corporation (NASDAQ:MSFT) includes 1,090,347 shares, valued at $487.3 million.
4. Amazon.com Inc. (NASDAQ:AMZN)
Total Number of Shares Owned: 2,645,567
Total Value of Shares Owned: $511,255,823
Number of Hedge Fund Investors: 308
Amazon.com, Inc. (NASDAQ:AMZN) has a bright outlook, supported by strong financial results and smart strategies for growth. In Q2 2024, Amazon.com, Inc. (NASDAQ:AMZN) reported revenues of $144.5 billion, a 12% increase from the previous year, with net income reaching $7.9 billion. This growth came from solid performances in both e-commerce and Amazon Web Services (AWS), which generated $26.4 billion in revenue, up 15%, showing its strength in the cloud computing market.
A major reason for Amazon.com, Inc. (NASDAQ:AMZN)’s success is its continuous investment in logistics and fulfillment. Amazon.com, Inc. (NASDAQ:AMZN) is expanding its delivery network, including new centers and advanced technology, which improves customer satisfaction and helps it gain more market share. Additionally, Amazon.com, Inc. (NASDAQ:AMZN)’s advertising business is thriving, with revenue reaching $12.2 billion in Q2 2024, a 21% increase, as more brands invest in digital marketing on its platform.
Moreover, Amazon.com, Inc. (NASDAQ:AMZN) is making strides in artificial intelligence to enhance customer experiences, offering personalized recommendations and better search features. Overall, Amazon.com, Inc. (NASDAQ:AMZN)’s strong financial performance, focus on improving logistics and advertising, and commitment to technology position it well for future growth and success.
Bridgewater Associates owns 2,645,567 shares of Amazon.com Inc. (NASDAQ:AMZN), worth $511.3 million.
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.”
3. The Procter & Gamble Company (NYSE:PG)
Total Number of Shares Owned: 3,595,067
Total Value of Shares Owned: $592,898,450
Number of Hedge Fund Investors: 64
Ranking 3rd in our list of the 10 best stocks to buy according to billionaire Ray Dalio is The Procter & Gamble Company (NYSE:PG). In Q2 2024, The Procter & Gamble Company (NYSE:PG) reported net sales of $20.6 billion, a 6% increase from last year, with net income reaching $3.5 billion. This growth was driven by success in various product areas, especially health care and beauty, due to effective pricing and loyal customers.
A major factor in The Procter & Gamble Company (NYSE:PG)’s success is its focus on innovation and sustainability, as seen in recent product launches that emphasize eco-friendly options, appealing to consumers who care about the environment. The Procter & Gamble Company (NYSE:PG) has also adopted cost-saving measures that have improved its profit margins despite rising costs, thanks to efficient supply chain management and operations. Additionally, The Procter & Gamble Company (NYSE:PG)’s efforts to enhance its digital presence have improved its e-commerce capabilities, allowing it to connect better with consumers in an evolving retail market.
Bridgewater Associates holds 3,595,067 shares of The Procter & Gamble Company (NYSE:PG), valued at $592.9 million.
2. NVIDIA Corporation (NASDAQ:NVDA)
Total Number of Shares Owned: 6,556,193
Total Value of Shares Owned: $809,952,083
Number of Hedge Fund Investors: 179
NVIDIA Corporation (NASDAQ:NVDA) landed in the 2nd spot in our list of the 10 best stocks to buy according to billionaire Ray Dalio. NVIDIA Corporation (NASDAQ:NVDA)’s strong outlook is driven by its impressive financial results and its key role in the fast-growing artificial intelligence (AI) market. In Q2 2024, NVIDIA Corporation (NASDAQ:NVDA) reported $16.6 billion in revenue, a remarkable 88% increase from the previous year, and net income of $6.5 billion. A big part of this growth came from its data center business, which earned $11.2 billion—up 138%—as more companies invest in AI technologies.
NVIDIA Corporation (NASDAQ:NVDA) has established itself as a leader in AI and machine learning, with increasing demand for its graphics processing units (GPUs) specifically for AI applications. NVIDIA Corporation (NASDAQ:NVDA) has formed partnerships with major cloud providers to enhance their AI capabilities, which further solidifies its position in the tech industry. Recent product launches, including the Hopper architecture tailored for AI workloads, showcase NVIDIA’s commitment to innovation. Moreover, its collaborations with leading firms to develop AI-driven applications and efforts to expand manufacturing capacity highlight NVIDIA Corporation (NASDAQ:NVDA)’s proactive strategy to meet growing demand.
Bridgewater’s stake in NVIDIA Corporation (NASDAQ:NVDA) consists of 6,556,193 shares, worth $810 million.
1. Alphabet Inc. (NASDAQ:GOOGL)
Total Number of Shares Owned: 4,540,271
Total Value of Shares Owned: $827,010,363
Number of Hedge Fund Investors: 216
Topping our list of the 10 best stocks to buy according to billionaire Ray Dalio is Alphabet Inc. (NASDAQ:GOOGL). Alphabet Inc. (NASDAQ:GOOGL) stems from its strong financial performance, highlighted by a Q2 2024 revenue of $74.6 billion, which represents a 12% increase from the previous year, and a net income of $19.5 billion. Advertising remains a crucial driver, with Google Ads growing by 10% to reach $61.9 billion. The Google Cloud division also saw impressive growth, increasing by 27% to $8.9 billion, showing Alphabet Inc. (NASDAQ:GOOGL)’s expanding influence in the enterprise sector.
A key factor in Alphabet Inc. (NASDAQ:GOOGL)’s success is its significant investment in artificial intelligence, which has led to enhancements across its services, particularly in Google Search and YouTube. Alphabet Inc. (NASDAQ:GOOGL)’s focus on short-form content has helped boost ad revenue, positioning it well against competitors like TikTok. Despite facing regulatory challenges, Alphabet Inc. (NASDAQ:GOOGL) has demonstrated resilience by actively engaging with regulators and adjusting its practices to manage risks effectively.
Additionally, Alphabet Inc. (NASDAQ:GOOGL)’s strategy of investing in emerging technologies and startups has strengthened its AI capabilities and diversified its product offerings. Recent initiatives, such as adding advanced AI features in Google Workspace and committing to ethical AI practices, showcase its proactive approach to future growth. Altogether, Alphabet Inc. (NASDAQ:GOOGL)’s strong financials, innovative advancements, and strategic responses to challenges make a compelling case for a positive outlook on its future.
Bridgewater holds 4,540,271 shares of Alphabet Inc. (NASDAQ:GOOGL), valued at $827 million.
Diamond Hill Large Cap Strategy stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its Q2 2024 investor letter:
“Among our top individual contributors in Q2 were Amazon, Texas Instruments and Alphabet Inc. (NASDAQ:GOOG). Media and technology company Alphabet also continued delivering strong results in its search, YouTube advertising, YouTube subscription and cloud businesses. Shares rose amid an environment that continues favoring mega-cap technology companies.”
While we acknowledge the potential of Alphabet Inc. (NASDAQ:GOOGL), our conviction lies in the belief that under the radar 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 the ones on our list but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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