In this article, we will take a look at the 10 best stocks to buy and hold for 5 years.
Is Corporate America Celebrating the New Administration?
On November 7, Reuters reported that stocks in the United States were higher than usual after the Fed announced a 25 basis point rate cut, extending the rally fueled by the election results. The Fed decision came promptly after the job market showed signs of easing and inflation moved towards the Central Bank’s target of 2%. Most investors expect the new administration to ease taxes and regulations, all of which sparked all three of the major indexes. The S&P 500 and Dow, each logged their largest one-day percentage jumps in two years.
Now that the elections are over, investors are keen to know how will markets perform amid election results. On November 8, Bethany McLean, contributing editor at Vanity Fair, joined Catalysts on Yahoo Finance to discuss why businesses may be optimistic as the new president takes over the White House.
McLean emphasizes that investors foresee a myriad of benefits such as tax cut extensions, fewer regulations, and less aggressive antitrust oversight, all of which have sparked a surge in markets. Despite the possible benefits, she emphasizes it is difficult to predict what the administration is going to do at the moment.
McLean expects the new administration to be friendlier with companies in the technology sector, however, she remains fixated on waiting to see how the policies play out. She further adds that if any future policies made by the new administration negatively impact the stock market, she expects them to “switch course.”
On the flip side, some analysts maintain that the easing cycle has a greater bearing on the stock market than the elections, hinting that value names may be more important as of now. On November 7, Arup Datta, senior vice president at Mackenzie Global Quantitative, joined Wealth! on Yahoo Finance to share his market thesis as the 2024 elections come to a close.
Datta shares that he is extremely positive about the market but emphasizes that the win will have little impact on financial markets in the long term. Speaking of the magnificent seven, he adds focusing on quality names with positive growth and value for his investment portfolio helps him navigate the market in such conditions.
He suggests that while the magnificent seven have been the talk of the town for the past 18 to 21 months, he would like to “pivot away” from that by a little. Historically, value stocks have performed better amid an easing cycle, adds Datta.
As the new administration settles in and the Fed initiates its second cut of the cycle, the near-term market will most likely remain volatile. Speaking of the future, some names happen to promise long-term growth due to their proprietary revolutionary technologies and crucial investments. That said, let’s take a look at the 10 best stocks to buy and hold for 5 years.
Our Methodology
To come up with the 10 best stocks to buy and hold for 5 years, we sifted through multiple similar rankings and compiled an initial list of 20 stocks. We then ranked the top 10 based on their hedge fund sentiment at the end of Q2 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Stocks to Buy and Hold For 5 Years
10. CrowdStrike Holdings, Inc. (NASDAQ:CRWD)
Number of Hedge Fund Holders: 69
CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is a cybersecurity company that ranks 10th on our list of the best stocks to buy and hold for 5 years. The company provides a range of security products including identity management, threat intelligence, and threat detection.
The company has 29,000 clients in multiple sectors, including healthcare, retail, technology, and the government. Its AI-native cybersecurity platform, Falcon, is its primary product that grew at 80% year-over-year in FQ2 2025. CrowdStrike Holdings, Inc. (NASDAQ:CRWD) has recently closed crucial partnerships, added innovations to its Falcon Platform, and expanded its CrowdStrike Marketplace to meet the growing demand for cybersecurity solutions.
The July 19 incident has left a bearing on the company. Despite that, CrowdStrike Holdings, Inc. (NASDAQ:CRWD) has been resilient and showcased transparency and accountability to its customers. On August 29, Joseph Gallo from Jefferies appeared in an interview on Schwab Network to share his thesis on CRWD. He shares that CrowdStrike Holdings, Inc. (NASDAQ:CRWD) has saved a lot of people in the security business and has the resources to continue doing so. Gallo emphasizes that despite the incident the product stands as a “sticky product” and has taken an appropriate “prudent” cut to their revenue to ease their customers and investors alike.
CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is working on revolutionizing cybersecurity using artificial intelligence, positioning CRWD ahead of its competitors in the long run. Analysts are also bullish on the stock and their high price target of $540 represents an upside of 69% from current levels, as of November 7.
ClearBridge Investments’ ClearBridge Growth Strategy stated the following regarding CrowdStrike Holdings, Inc. (NASDAQ:CRWD) in its Q3 2024 investor letter:
“Shares of CrowdStrike Holdings, Inc. (NASDAQ:CRWD), a global cybersecurity leader, came under pressure following a software content update in July that caused widespread disruptions across its client base. Importantly, the outage was not caused by a security breach and we are encouraged that the company was swift and transparent in its response and support for customers. While some level of recompense will be required, after ongoing dialogue with company management, we are optimistic that thoughtful remediation efforts, such as offering flexibility around new module uptakes, will position the company well for future growth. Shares have since rebounded on the back of better than feared channel feedback, which suggests CrowdStrike remains a best-in-class provider in the eyes of customers.”
9. NextEra Energy, Inc. (NYSE:NEE)
Number of Hedge Fund Holders: 73
NextEra Energy, Inc. (NYSE:NEE) is a prominent renewable energy company. The company generates, transmits, distributes, and sells electric power, generated through wind, solar, nuclear, and natural gas, across North America.
The company is on our list because of the value it provides to customers. Since 2001, NextEra Energy’s (NYSE:NEE) modernizations have saved customers more than $16 billion in fuel costs. During the third quarter of 2024, the company generated revenue worth $7.57 billion. Of this, its Florida Power & Light Company, which supplies reliable and clean electricity to nearly 12 million people across Florida, made up $4.94 billion of the total revenue.
Through 2027, the company expects its earnings per share to increase at an annual growth rate of 6% to 8%. During the third quarter, NextEra Energy Resources added nearly 3 gigawatts of new renewables and storage projects. By 2027, NextEra Energy, Inc. (NYSE:NEE) expects its renewables and storage portfolio to reach a capacity of 81 gigawatts, more than double its capacity today. The company also revised its wind repowering target to 1.9 gigawatts through 2026, from 1.3 GW at the moment.
Overall, NextEra Energy’s (NYSE:NEE) growth strategies position it as an emerging leader in renewable energy in the coming years, contributing to its ranking on our list. Analysts are also bullish on the stock and their median price target represents an upside of 23% from current levels, as of November 7.
ClearBridge Investments’ ClearBridge Large Cap Growth Strategy stated the following regarding NextEra Energy, Inc. (NYSE:NEE) in its Q2 2024 investor letter:
“AI-related momentum was a key driver of performance in the second quarter, lifting the enablers in technology as well as holdings like renewable power producer NextEra Energy, Inc. (NYSE:NEE) that supply the increasing energy needs of data centers. Parts of the market lacking an AI connection, like our medical device holdings, underperformed despite no change to fundamentals. We have managed through several similar momentum periods over our tenure and have delivered long-term results for shareholders by staying true to an approach that emphasizes diversification across three buckets of growth companies (select, stable and cyclical) and seeks to take advantage of attractive entry points into quality growth businesses.”
8. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 85
Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company specializing in producing electric cars and solar-integrated renewable energy solutions. The company is one of the largest EV manufacturers in the United States.
In the third quarter of 2024, Tesla, Inc. (NASDAQ:TSLA) logged revenue worth $25.18 billion, up by 8% year-over-year. Automotive revenues accounted for most of the revenue, at $20.02 billion. Overall, revenue was driven by increasing vehicle deliveries. Previously, Tesla, Inc. (NASDAQ:TSLA) launched a new lineup of electric vehicles to boost the launch of new models. Its new lineup and extensive production line will deliver over 3 million vehicles of capacity when optimized fully.
Tesla, Inc. (NASDAQ:TSLA) boasts solid growth potential over the next few years. On October 28, John Murphy, senior automotive analyst at Bank of America, appeared in an interview on Yahoo Finance to share his stance on TSLA. He states that Tesla is at the “next level” of electric and autonomous vehicles. Murphy suggests that the company is witnessing growing gross margins which will be able to fund the future Tesla wants, potentially in the realms of self-driving and robotics. He adds that the company has a strong core and a solid “opportunity curve.” According to Murphy, he has “never seen a company like this before” and is pretty impressed with how the company is progressing, calling it a “real innovator.”
Tesla’s (NASDAQ:TSLA) investments in AI make autonomous driving a reality, contributing to its position on our list. Tesla is poised for significant growth in the coming years because of its growing emphasis on AI.
Baron Funds mentioned Tesla, Inc. (NASDAQ:TSLA) in its Q2 2024 investor letter:
“As discussed in the Fund’s prior shareholder letter, the fears about Tesla’s products were misplaced. Instead of the company being exclusively dependent on limited vehicle models and software advancement, the company announced it will more rapidly introduce products that appeal to a wider audience. It also demonstrated that its price reductions were the result of efficiencies rather than only to spur demand. Margins exceeded expectations. And the company’s integration of its hardware with proprietary AI software should facilitate full self-driving capabilities and subsequent new revenue streams. This integration of hardware with software creates a dynamic growth company as it more fully explores its potential with Optimus, humanoid robotics. The combination of these catalysts resulted in Tesla’s stock increasing meaningfully and rapidly in the second half of the quarter. This stock price momentum has continued into the next period.”
7. Vistra Corp. (NYSE:VST)
Number of Hedge Fund Holders: 92
Vistra Corp. (NYSE:VST) is an electricity generation company based in Texas, United States. The company has more than 5 million customers, 6,800 employees, and 41,000 megawatts of power generation capacity.
As of September 30, the company hedged nearly 100% of expected generation volumes for 2024, 95% for 2025, and 64% for 2026. During Q3 2024, Vistra Corp. (NYSE:VST) grew its fleet of zero-carbon resources by securing two power purchase agreements at new solar facilities, with a total capacity of 600 megawatts. The company also expanded its interest in nuclear energy by acquiring a 15% minority stake in its Vistra Vision subsidiary, making Vistra Corp. (NYSE:VST) the sole owner of its carbon-free assets. This acquisition increases Vistra Corp.’s nuclear ownership by 970 megawatts.
On the nuclear energy front, Vistra Corp. (NYSE:VST) announced that the Nuclear Regulatory Commission (NRC) approved the company’s request to extend its operating licenses for its Comanche Peak Nuclear Power Plant through 2050 and 2053, an added 20 years beyond the original licenses. Its Perry Nuclear Power Plant has an application for a 20-year license renewal through 2046 under process, with high expectations of it going through.
Overall, Vistra Corp. (NYSE:VST) is well-positioned to exploit the growing demand for nuclear energy from large tech companies for their AI data centers. The company already has agreements with two of the magnificent seven, positioning it as a leader in nuclear energy. Analysts are also bullish on the stock and their median price target of $145 implies an upside of 15% from current levels, as of November 7.
Fidelity Growth Strategies Fund stated the following regarding Vistra Corp. (NYSE:VST) in its Q2 2024 investor letter:
“An overweight stake in utility company Vistra Corp. (NYSE:VST) (+24%) was the top individual relative contributor. In Q1, the Texas-based independent power producer completed its acquisition of Ohio-based nuclear fleet operator Energy Harbor. The new Vistra, with its expanded geographic footprint, is in strong position to gain from the buildout of AI-capable data centers, which require enormous amounts of power to run. It is expected that local grids in the U.S. will need to invest heavily over the coming years to improve their power infrastructure and meet growing demand. In the nearer term, firms may choose to contract with independent power producers, like Vistra, rather than rely on the local provider.”
6. Micron Technology, Inc. (NASDAQ:MU)
Number of Hedge Fund Holders: 120
Micron Technology, Inc. (NASDAQ:MU) ranks sixth on our list of the best stocks to buy and hold for 5 years. Its primary offerings include memory and storage products for computers, consumer electronics, artificial intelligence use cases, servers, and automobiles.
Speaking of artificial intelligence, on October 15, Micron Technology, Inc. (NASDAQ:MU) launched a new portfolio of memory solutions that are capable of fueling the new wave of AI PCs. Its corporate vice president, Dinesh Bahal, stresses the need for a memory paradigm shift as AI takes flight. To align with his stance, Micron is working relentlessly to meet the need for future AI workloads.
Following its fiscal fourth quarter 2024 results, Micron Technology, Inc. (NASDAQ:MU) raised its guidance for the next quarter and fiscal year 2025. On September 26, William Kerwin, analyst of technology at Morningstar Equity, appeared in an interview on Yahoo Finance, to discuss his thesis on MU. He shares that the company’s earnings results “were nothing short of impressive.” He adds that the company is currently undergoing a “cyclical upswing” in memory demand which he expects will continue in 2025.
Micron Technology, Inc. (NASDAQ:MU) is shifting its complete focus to meeting the demands for artificial intelligence and data center customers, two of the fastest-growing industries at the moment. The company expects demand for AI servers to continue to increase, positioning it as a major player in AI.
Baird Chautauqua International and Global Growth Fund stated the following regarding Micron Technology, Inc. (NASDAQ:MU) in its Q3 2024 investor letter:
“After Micron Technology, Inc.’s (NASDAQ:MU) price appreciated 54% in 1H24, investors became anxious about potential memory weakness, less clear cyclical recovery pace, and whether competitor Samsung will act rationally with capacity expansion. We maintain our long-term positive view on the industry’s demand/supply situation. We believe Micron is well positioned in technology capability, and that its margins will continue to improve.”
5. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 130
Broadcom Inc. (NASDAQ:AVGO) designs and develops a range of semiconductor products and is well known for making application-specific integrated circuits (ASICs). It also provides infrastructure software products. Some of its products include cable modems, networking processors, and storage adapters. The company serves the data center, networking, software, broadband, storage, and wireless markets.
The company has been performing exceptionally throughout the year, having launched breakthrough technologies that facilitate the management of large datasets for AI tasks and scalable AI systems. Fast forward to November 5th, the company unveiled VeloRAIN, a platform that uses artificial intelligence and machine learning to improve the performance of AI security workloads. On the same day, the company’s VMware Cloud Foundation unveiled a private cloud platform to improve customers’ AI autonomy and security.
In the fourth quarter of 2024, Broadcom Inc. (NASDAQ:AVGO) expects revenue from AI to grow by 10% sequentially to $3.5 billion, bringing the full-year total to $12 billion, driven by ethernet networking and custom accelerators for AI data centers. Overall, consolidated revenue and net income grew by 47% and 44%, respectively, during the third quarter of 2024, driven by growing AI revenue and VMware bookings.
Broadcom Inc.’s (NASDAQ:AVGO) cloud computing platform for enterprises promises a solid growth opportunity as it leverages artificial intelligence. In addition to that, company officials believe AVGO is finally achieving stability on a company-wide level and is on track to becoming an AI powerhouse.
ClearBridge Investments’ ClearBridge Large Cap Value Strategy stated the following regarding Broadcom Inc. (NASDAQ:AVGO) in its Q3 2024 investor letter:
“In IT, we bought Broadcom Inc. (NASDAQ:AVGO) as we believe the company has a long runway for growth with its custom silicon business, which should be more durable and less volatile than other components within the AI food chain. We also believe the acquisition of VMware creates another opportunity for steady, subscription-based durable growth that is still in its early innings. We believe the stock has an attractive risk/reward profile given the reasonable visibility toward mid-teens EPS growth at a low-20s P/E multiple. We made room for Broadcom by exiting Lam Research, whose shares we believed priced in a full recovery, while we grew increasingly concerned that China exposure might create an air pocket.”
4. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 156
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is one of the best stocks to buy and hold for five years. The semiconductor company makes chips for technology giants like NVIDIA and AMD.
In the third quarter of 2024, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) logged revenue worth $23.7 billion (NT$759.69 billion) and net income worth $10.13 billion (NT$325.26 billion), up by 39% and 54.2% year-over-year, respectively. The company expects fourth-quarter revenue to range between $26.1 billion and $26.9 billion. TSM attributes its revenue growth to the increasing demand for artificial intelligence and its 3nm and 5nm technologies.
TMSC expects to spend $40 billion to $32 billion in capital expenditure in 2024, allocated to advanced process technologies, specialty technologies, and advanced packaging and testing. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is expanding its presence across the world. The company recently formed a joint venture with major partners, in Dresden, Germany, positioning TMSC as a leader in the foundry industry. More recently, the company expanded its partnership with Amkor to facilitate advanced packaging in Arizona, fueling the semiconductor ecosystem in the region.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) expects revenue from AI chips to increase at a compound annual growth rate (CAGR) of 50% by 2027, contributing to its ranking on our list.
Diamond Hill Capital stated the following regarding Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its Q2 2024 investor letter:
“On an individual holdings’ basis, top contributors to return in Q2 included our long positions in Alphabet, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) and Microsoft. Semiconductor manufacturer Taiwan Semiconductor’s (TSMC) fundamentals remain solid as demand for its chips continues growing — particularly as the machine learning and cloud computing trends gain more traction.”
3. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 179
NVIDIA Corporation (NASDAQ:NVDA) ranks third on our list of the best stocks to buy and hold for 5 years. NVIDIA is a leading GPU maker driving innovation in artificial intelligence, gaming, creative design, autonomous vehicles, and robotics.
There is no doubt about NVIDIA’s position in the technology and AI sector. As part of its recent updates, On October 29, the company revealed Enterprise Reference Architectures. These blueprints will help the company’s partners and customers build AI factories. More recently, on November 6, NVIDIA Corporation (NASDAQ:NVDA) partnered with Hugging Face to fuel open-source AI robotics research and development.
NVIDIA Corporation (NASDAQ:NVDA) is scheduled to release earnings towards the end of this month, on November 20, 2024. In light of its awaited earning release, on October 19, Vivek Arya analyst at Bank of America, joined CNBC to defend his bullish call on NVDA. Having called the stock a “generational opportunity,” Arya emphasizes that NVDA is trading less than one times its earnings growth, much lower than other names in the magnificent seven. He suggests that NVDA celebrates a large ecosystem encompassing “end-to-end” knowledge, placing it ahead of competitors.
Overall, NVIDIA Corporation (NASDAQ:NVDA) is on our list because of its resources and expertise in scalable AI hardware and software solutions. At the end of Q2 2024, 179 hedge funds were bullish on the stock, according to our Insider Monkey database.
Ithaka Group’s Ithaka US Growth Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q2 2024 investor letter:
“NVIDIA Corporation (NASDAQ:NVDA) is the market leader in visual computing through the production of high-performance graphics processing units (GPUs). The company targets four large and growing markets: Gaming, Professional Visualization, Data Center, and Automotive. NVIDIA’s products have the potential to lead and disrupt some of the most exciting areas of computing, including: data center acceleration, artifi cial intelligence (AI), machine learning, and autonomous driving. The reason for the stock’s appreciation in the quarter was twofold: First, the stock benefi ted from tremendous excitement surrounding the further development of generative AI and the likelihood this would necessitate the purchase of a large number of Nvidia’s products far into the future; Second, Nvidia posted another strong beat[1]and-raise quarter, where the company upped its F2Q25 revenue guidance above Street estimates, showcasing its dominant position in the buildout of today’s accelerated computing infrastructure.”
2. Meta Platforms Inc (NASDAQ:META)
Number of Hedge Fund Holders: 219
Meta Platforms Inc (NASDAQ:META) is a technology conglomerate behind Facebook, Instagram, Threads, and WhatsApp. The company has a large user base of over 3 billion daily active users across all its platforms.
The company is expanding its position on AI raising its capital expenditure guidance for 2025. On October 31, Rohit Kulkarni, managing director and senior research analyst at Roth Capital Partners, joined Yahoo Finance to share his bullish thesis on META. Kulkarni shares that META is a “high-flying stock” and emphasizes that such stocks need high-flying numbers to support their position. Despite some concerns, he suggests that “now is the time to buy.” He adds that he expects the company to significantly improve its content targeting, engagement, and advertising return on investment.
Over the past few months, the company has leveraged its expertise in AI and augmented reality, having launched its debut AR glasses, Orion, in September. On the same day, the company released its most affordable mixed-reality headset, Meta Quest 36. Meta Platforms Inc (NASDAQ:META) is also working relentlessly to become one of the best recommendation technology companies backed by AI.
Meta Platforms Inc (NASDAQ:META) has a strong business model and is positioned as one of the best stocks to buy and hold for five years. The company is pioneering ad tech using artificial intelligence, challenging for any other company to replicate.
Rowan Street Capital stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its Q2 2024 investor letter:
“We are pleased to report that Meta Platforms, Inc. (NASDAQ:META), our largest position in the fund, has delivered a remarkable performance, +450% since our November 2022 note. Our investment in Meta dates back to 2018, with an average cost basis of approximately $172 per share. Today, the stock trades around $535, reflecting a 3x return over the six-year holding period, equating to a 20% annualized return.
We would like to remind you that achieving these types of returns is never a straight path. From time to time, we might experience volatility — that’s simply part of the investment journey. In fact, wealth creation and volatility go hand in hand. There’s no escaping it; it’s the “price of admission” the market demands. If you take a look at the chart below, you’ll notice the drawdowns META stock has faced over the years, with 2022 standing out as a particularly challenging period, where the stock saw a 75% drop….. ” (Click here to read the full text)
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 308
Amazon.com, Inc. (NASDAQ:AMZN) ranks first on our list of the best stocks to buy and hold for five years. The technology company is an e-commerce giant that also provides streaming and cloud computing services.
The company has not only been actively involved in the development of AI hardware and software but has also signed partnerships with the government and AI startups. Similarly, in a rather interesting development, on October 16, Amazon.com, Inc. (NASDAQ:AMZN) announced its plans to invest in nuclear energy to meet the power demand from AI data centers.
Amazon.com’s (NASDAQ:AMZN) growth trajectory in AI hardware and software is exceptional. More recently, on November 4, Amazon.com, Inc. (NASDAQ:AMZN) announced the general availability of the company’s latest and most intelligent models in the Claude family in Amazon Bedrock, a fully managed service allowing people to build AI applications. Coming to its e-commerce business, the company launched powerful generative AI features in Q3 2024 such as Rufus, a shopping assistant, and Project Amelia, an AI assistant for sellers.
Amazon.com, Inc. (NASDAQ:AMZN) has significant growth potential and to achieve such the company is working tirelessly. Over the next few years, the company is not only poised to become a fully functional AI company but it is also on track to become carbon-free.
Diamond Hill Select Strategy stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q2 2024 investor letter:
“Among our top individual contributors in Q2 were Amazon.com, Inc. (NASDAQ:AMZN), Texas Instruments and Mr. Cooper Group. Internet retail and cloud infrastructure company Amazon is benefiting from strong profitability, particularly in its Amazon Web Services (AWS) business. Shares also received a boost amid growing optimism around the demand for AWS as Amazon customers’ investments in generative AI projects continue growing.”
While we acknowledge the potential of AMZN to grow, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AMZN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
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