In this article, we will take a look at the 10 Best Stocks to Buy According to Billionaire Steve Cohen.
Steve Cohen, a prominent figure in the world of hedge funds, is the founder of Point72 Asset Management. The firm began managing external money in 2018 following a two-year supervisory restriction imposed by insider trading accusations against Cohen’s former firm, SAC Capital. That said, Cohen’s name isn’t just known within the world of finance. After years of having a small share in the New York Mets, he spent $2.4 billion to buy the franchise in 2020. Since then, his reputation as an obsessive businessman has evolved beyond finance to Major League Baseball.
Cohen stated that the future of the US economy moving forward is uncertain, in part due to President Donald Trump’s tariff proposal. Since Trump’s inauguration, economic policy seems to have shifted from threats of import taxes on countries such as Mexico and Canada to last-minute delays when conditions were agreed upon. Meanwhile, the White House seems to have moved forward with its tariff increase on several countries, potentially sparking a tug-of-war with some of the world’s largest economies. Speaking at the FIIPRIORITY conference in Miami back in February, Cohen said the following:
“I think this is one of those moments where there’s really a lot of uncertainty and I have pretty strong views here. … Tariffs cannot be positive, I mean it’s a tax. And you can imagine tit for tat if the U.S. does something — it implements a tax on somebody, somebody else is going to perhaps raise the stakes and raise their tax back. Taxes are never positive.”
“On top of that we have slowing immigration, which means the labour force will not grow as rapidly as… over the last five years,” he said. “And in addition now you have (the Department of Government Efficiency, DOGE). Wherever you lay on the DOGE issue that’s austerity, and austerity when that money’s been coursing through the economy over many years and now potentially will be reduced or stopped in many ways has got to be negative for the economy.”
Given the uncertain macroeconomic climate, the billionaire feels the stock market may see a pullback. He expects the US economy’s growth to slow to 1.5% from 2.5% in the second half of the year. The investor said he did not expect a “disaster,” but did expect a significant sell-off as market mood weakened, stating that this is “definitely a period where I think the best gains have been had, and it wouldn’t surprise me to see a significant correction.” Furthermore, Cohen is concerned that Elon Musk’s objective of utilizing DOGE to reduce government expenditure by $2 trillion may result in the largest employment cutbacks in US history. While economists do not anticipate job cuts alone to cause a recession since they are modest in comparison to the broader job market, they do have the ability to reduce GDP growth by a small amount.
Our Methodology
For this list, we sifted through Steve Cohen’s Q4 2024 portfolio, and narrowed down his firm’s top 10 holdings as of Q4 2024. Additionally, we have mentioned the hedge fund sentiment around each stock, as of Q4 2024.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10. Adobe Inc. (NASDAQ:ADBE)
Point72 Asset Management’s Q4 Stake: $333.08 million
Number of Hedge Fund Holders: 117
Adobe Inc. (NASDAQ:ADBE) is a world leader in software creation, known for its cutting-edge digital media solutions. Its major products, including Photoshop, Acrobat, and Adobe Creative Cloud, are essential tools for creative sectors and organizations throughout the world.
Adobe Inc. (NASDAQ:ADBE) posted better-than-expected first-quarter 2025 results, with adjusted earnings of $5.08 per share and revenue of $5.71 billion. This exceeded analysts’ expectations of $4.97 per share and $5.66 billion in revenue. The company’s annualized recurring revenue from AI contributed $125 million during the period, which Adobe Inc. (NASDAQ:ADBE) intends to double by the end of the fiscal year.
On March 21, Citi analyst Tyler Radke maintained a Neutral rating on Adobe Inc. (NASDAQ:ADBE), with a $430 price target. At the Adobe Summit, the analyst spoke with eight ecosystem partners on Adobe’s innovation speed, the industry’s desire for AI capabilities, and customer IT expenditure patterns. The company’s partners recognized Adobe’s leadership in digital content production and management. However, they stated that implementing new solutions such as GenStudio or Firefly Services may be sluggish, owing to numerous companies still shifting to the cloud.
Guinness Global Innovators stated the following regarding Adobe Inc. (NASDAQ:ADBE) in its Q4 2024 investor letter:
“Adobe Inc. (NASDAQ:ADBE) faced challenges this year, ending as the Fund’s worst-performing stock (-25.5% USD). Investor concerns about Adobe’s AI strategy and underwhelming earnings reports played a key role in performance over the year. Adobe started the year with optimism surrounding its generative AI innovations and the company seemed poised to capitalize on the surging demand for creative and marketing automation tools. Its AI-driven platform, Firefly, launched in March 2023, quickly gained traction, generating over 16 billion creative outputs and setting adoption records. However, despite this strength, Adobe’s stock has underperformed, as earnings reports over the year have appeared softer than initially expected from investors. The market reaction however was not caused by scepticism about Adobe’s AI products and tools, but rather driven by concerns on the ability to monetise these quickly. The creative design market has seen intensifying competition with competitors like OpenAI, Canva and even startups introducing generative AI content tools such as text-to-video tools. Adobe’s strategy has appeared to be focused on prioritising widespread adoption over immediate monetization, echoing its successful strategy with PDF in previous years. While larger enterprises have adopted and appreciate Adobe’s ‘commercially safe’ tools compared to peers, Adobe sees a large opportunity amongst those that were not traditionally users of the Adobe’s tools, whether enterprise employees or non-enterprise customers and have thus chosen to drive proliferation of their tools in these ‘untapped’ consumers and delay monetisation. Whilst some AI tools have missed revenue expectations through the year, the increased proliferation and the increasing costs of creating content should improve Adobe’s prospects of monetisation into FY25. Further, despite these short-term challenges, Adobe has a track record of high-quality attributes and long-term growth prospects. Its extensive distribution network, and loyal customer base provide it with a durable competitive edge. The company’s subscription-based model, which accounts for over 90% of its revenue, ensures stable cash flows and high margins. Finally, its brand equity as the industry standard in creative and document solutions supports ongoing market leadership, allowing us to remain confident in Adobe’s ability to navigate current challenges and deliver sustained value over time.”
9. Arista Networks Inc. (NYSE:ANET)
Point72 Asset Management’s Q4 Stake: $333.9 million
Number of Hedge Fund Holders: 78
Arista Networks, Inc. (NYSE:ANET) is an American computer networking company based in Santa Clara, California. The company focuses on inventing and delivering multilayer network switches that enable software-defined networking in large-scale data centers, cloud computing, high-performance computing, and high-frequency trading settings.
On March 18, Evercore ISI maintained its Outperform rating and $130 price target for Arista Networks Inc. (NYSE:ANET), despite the recent revelation of a high-profile CEO resignation. The firm’s analysts reacted to the departure of John McCool, Chief Platform Officer and SVP of Engineering and Operations, who will step down on April 7, 2025, but will remain a senior advisor to the CEO. According to Evercore ISI, this is the third high-profile CEO to quit Arista in the previous 18 months, which may add to the gloomy view of the company. However, the firm highlighted that the departure did not change their favorable opinion of Arista.
Giverny Capital Asset Management stated the following regarding Arista Networks Inc (NYSE:ANET) in its Q4 2024 investor letter:
“I trimmed Arista Networks Inc (NYSE:ANET) as it grew beyond 10% weight in the portfolio thanks to its continued outperformance. Arista has been on a tear in January and if our clients are lucky I will leave Arista alone for a while! The market appears to see that Artificial Intelligence data centers are going to require robust investment in networking equipment, and Arista is the leader in that sector.”