The markets have had two monster years with the S&P 500 index surging 24.73% and 24.01% in 2023 and 2024, respectively. Meanwhile, the tech-heavy Nasdaq 100 index increased by a whopping 54.9% and 27.01% during the same periods. This was on the back of an AI boom, which benefitted the stocks of big tech companies. However, policy uncertainties and the risk of a stagflation, where inflation remains high without a significant economic growth, have caused a downtrend in those markets in 2025.
While Risks are Elevated, Opportunities Present Themselves
CNBC recently interviewed Souls’ Dan Greenhaus, Robinhood’s Stephanie Guild, and Invesco’s Brian Levitt. Greenhaus suggested that a lot of the worse-case scenarios have been priced into the market. While he conceded that he still remains cautious, he feels that the effects of the tariffs on inflation may not be as dire as most people think. This is in line with a Morgan Stanley research which suggested that while the worst may be over, the coast is not clear yet.
However, Stephanie Guild and Brian Levitt are a bit more cautious. Levitt added that he sees uncertainty persisting for longer, which means that volatility is likely to persist. According to Greenhaus, there are times of persistent uncertainty, that cause the risk premium on assets to rise, and present long-term opportunities. However, Levitt pointed out that S&P 500 valuations still remain elevated and are not at prior recession levels. Whereas Guild added that market expectations remain quite high, despite the uncertainty. She said that earnings growth expectations are at 11% and suggested that there is room for earning misses given the risks to the economy, which, in turn, could cause the markets to fall.
While the market is probably going to remain risk-off for a bit, it is likely to offer great discounts on some of the best stocks in the market, sooner or later. Some companies with long runways are already trading at multi-year low levels. Also, these companies with good balance sheets should be able to navigate through a recession, if we were to enter into one, with ease.
Our Methodology
We sifted through the financial media reports to compile a list of the best stocks to invest in for the long-term. We then selected the 10 stocks that were the most popular among elite hedge funds. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
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 Best Stocks to Invest in for Long Term
10. Lockheed Martin Corporation (NYSE: LMT)
Number of Hedge Fund Holders: 65
Lockheed Martin Corporation (NYSE: LMT) is a worldwide leader in aerospace and defense. It focuses on creating and supporting high-tech systems, including aircraft, missiles, satellites, and other advanced technology. Along with building these systems, the company also provides services like engineering, technical support, logistics, system integration, and cybersecurity. Its main customer is the U.S. government, but it also works with international and commercial clients in areas like defense, space, intelligence, homeland security, and information technology.
Due to its focus on military and its strong relationship with the US Department of Defense, Lockheed Martin Corporation (NYSE: LMT) can easily navigate through tough economic times. The company is expanding globally with strategic partnerships. Morocco made a deal with the company to upgrade its air force by buying new fighter jets, helicopters, missile defense systems, and radar. This helps improve Morocco’s military and its partnership with the US. In India, Lockheed Martin and Tata are working together to build more military transport planes and set up a repair center. This supports India’s defense and its “Make in India” program. Meanwhile, during a NATO exercise, the company’s F-35 jets showed they can share real-time targeting data, helping guide rocket attacks. This shows the F-35’s importance in modern military operations.
9. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 81
The Coca-Cola Company (NYSE:KO) is a global beverage leader with products sold in over 200 countries. It owns or licenses many well-known drink brands like Coca-Cola, Sprite, Fanta, and Minute Maid, offering a wide range of beverages including sodas, juices, water, tea, coffee, dairy, plant-based drinks, and even alcoholic beverages in some markets. The Coca-Cola Company (NYSE:KO) operates through a mix of concentrate sales (to bottling partners) and finished product sales. It focuses on offering a variety of drinks to suit different lifestyles and preferences.
As the market mood is turning risk-off, many analysts are suggesting that it’s time to go defensive. Coca-Cola is one of the best defensive stocks, as customers consume the company’s products come hail or high water. JPMorgan continues to be bullish on the stock. The investment bank kept its “Overweight” rating on the stock, while increasing its price target from $74 to $78. According to JPMorgan, The Coca-Cola Company (NYSE:KO) is well-positioned to navigate through the continued uncertainty in the market caused by the current administrations constant tariff threats. The JPMorgan analyst wrote:
While KO is not immune to tariffs and macro headwinds, it is a relatively more defensive stock that will likely deliver among the highest (organic sales growth) in our coverage universe in 2025.
8. Costco Wholesale Corporation (NASDAQ:COST)
Number of Hedge Fund Holders: 96
Costco Wholesale Corporation (NASDAQ:COST) operates membership-based warehouses and e-commerce sites in multiple countries, offering low-priced, high-quality products across various categories. With 890 warehouses worldwide, the company focuses on high sales volumes and quick inventory turnover by purchasing in bulk and using efficient distribution. Costco Wholesale Corporation (NASDAQ:COST) warehouses are typically 147,000 square feet, designed for inventory handling with minimal overhead. It offers membership warehouses and e-commerce sites. It offers its members low prices on some categories, which helps the company produce high sales volumes and rapid inventory turnover.
Costco Wholesale Corporation (NASDAQ:COST) is intending to launch 29 new warehouses in fiscal year 2025, with 17 located in the US and 12 in other countries. Costco reported strong March sales, with total comparable sales up 6.4% and net sales rising 8.6% to $25.51 billion. Membership renewals remain high, helping maintain steady revenue. Executive memberships and digital expansion are fueling profitability. Costco’s solid financials and disciplined operations make it a strong long-term investment. Although the stock commands a premium, its consistent performance and loyal customer base justify investor confidence. Analysts have raised earnings estimates, expecting double-digit growth in the current and the next fiscal year.
7. Eli Lilly and Company (NYSE:LLY)
Number of Hedge Fund Holders: 115
Eli Lilly and Company (NYSE:LLY) is a global pharmaceutical company that makes medicines to help people live better lives. The company sells its products in about 95 countries and focuses only on human health. The company makes treatments for diabetes, cancer, immune system diseases, brain disorders, and more. Some of its well-known drugs include Mounjaro and Trulicity for diabetes, Verzenio for breast cancer, and Kisunla for early Alzheimer’s. The company is known for creating new and effective medicines to treat serious health problems.
To deal with rising tariffs and avoid possible supply chain hiccups, Eli Lilly and Company (NYSE:LLY) is setting up production sites in the US, closer to most of its customers. Over the last couple of years, Lilly has been on an acquisition spree, buying eight companies and signing three new partnerships. These moves, starting with DICE Therapeutics in mid-2023 and most recently Scorpion Therapeutics in early 2025, are helping it grow into new areas. The company’s stock got a boost recently after a key diabetes drug, Orforglipron, did well in late-stage testing. The success has investors feeling good about Lilly’s place in the fast-growing market for diabetes and obesity treatments.
Lilly is also investing heavily into research to treat other prominent diseases. It has a deep pipeline with new potential drugs, which would lead to new stream of revenue for the company.
6. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 123
JPMorgan Chase & Co. (NYSE:JPM) is a leading U.S.-based financial services firm with global operations. As of December 31, 2024, it reported assets totaling $4.0 trillion and stockholders’ equity of $344.8 billion. The firm operates through three primary segments: Consumer & Community Banking, Commercial & Investment Bank, and Asset & Wealth Management. It serves millions of customers in the U.S. and numerous corporate, institutional, and government clients worldwide.
JPMorgan Chase & Co. (NYSE:JPM) reported strong Q1 2025 results, reporting $14.6 billion in net income and revenue of $46 billion, an 8% year-over-year increase. Markets revenue rose 21%, and noninterest revenue outside of Markets grew 20%, aided by higher asset management and investment banking fees. During JPMorgan’s Q1 earnings call, the management discussed the firm’s outlook amid growing economic uncertainty. CFO Jeremy Barnum explained that although short-term interest rates have dropped, JPMorgan’s net interest income (NII) guidance remains unchanged due to favorable balance sheet factors, higher wholesale deposit balances, and the removal of a placeholder for potential card fee regulation impacts.
5. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 174
Alphabet Inc. (NASDAQ:GOOG), Google’s parent company, operates primarily through Google Services and Google Cloud, while other businesses are grouped under “Other Bets.” Alphabet’s mission remains to make information universally accessible and useful, with AI playing a central role in improving products like Search, YouTube, Gmail, and Google Cloud. The Gemini AI model powers many of these tools, boosting creativity, productivity, and innovation across personal and business use cases.
Alphabet reported strong Q1 2025 results, with revenue up 12% to $90.23 billion and net income surging 46% to $34.54 billion, driven by growth in advertising, YouTube, and a 28% rise in Google Cloud revenue. The company announced a $70 billion buyback and raised its dividend. CEO Sundar Pichai emphasized AI leadership, noting AI Overviews now reach 1.5 billion users. Gemini 2.5 Pro was launched, and Google Assistant will be phased out in favor of Gemini. CFO Ruth Porat highlighted cost-cutting and team consolidations improving efficiency. Alphabet plans $75 billion in AI-related capex in 2025, signaling strong commitment to future growth amid a dynamic tech and macroeconomic environment.
4. Visa Inc. (NYSE:V)
Number of Hedge Fund Holders: 181
Visa Inc. (NYSE:V) is a global leader in digital payments, helping people and businesses move money securely and efficiently across over 200 countries. Since 1958, it has grown by connecting consumers, merchants, banks, governments, and fintechs through its powerful transaction network, VisaNet. In 2024, Visa processed 303 billion transactions, with $16 trillion in payments and cash volume, and 4.6 billion Visa Inc. (NYSE:V) accounts accepted at over 150 million merchants. Visa supports various payment types, offers services like fraud protection and consulting, and partners with others to expand digital payments worldwide.
While traditional banks remain central through Visa-branded cards, the company is seeing rising transaction volumes in peer-to-peer, business-to-consumer, and business-to-business payments. On 31st March, TD Cowen’s analyst Bryan Bergin increased the company’s price target to $363 from $362, while reiterating a Buy rating. Bergin remains optimistic, highlighting Visa’s leadership in consumer payments and growing engagement through digital channels. He also points to the company’s strategic mergers and acquisitions and expansion into new payment flows as key drivers of future growth.
3. NVDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 223
NVIDIA Corporation (NASDAQ:NVDA) is a leader in accelerated computing, originally known for inventing the GPU. Today, it offers full-stack computing solutions — combining hardware, software, and networking — to power modern technologies like AI, scientific research, and 3D graphics. Its core platform, CUDA, supports a wide range of applications across industries like healthcare, automotive, and manufacturing. NVIDIA’s GPUs are essential for AI development and run major workloads in data centers globally. Its products are used in supercomputers, cloud platforms, and by enterprises building AI solutions.
NVIDIA Corporation (NASDAQ:NVDA) is expanding into enterprise AI with NeMo microservices, a new platform enabling businesses to build AI agents—autonomous tools that assist with internal tasks. NeMo supports open-weight models like those from Meta and Mistral AI, offering enterprises more control and flexibility, especially for sensitive or regulated data. While not fully open-source, it’s cloud-agnostic, allowing companies to avoid vendor lock-in. Nvidia aims to pair its dominant GPU hardware with software that keeps users within its ecosystem. As competition grows with Microsoft, Google, Amazon, and OpenAI, Nvidia’s infrastructure leadership could give it an edge in enterprise AI adoption.
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 317
Microsoft Corporation (NASDAQ:MSFT) is a global tech company focused on making digital tools and AI widely accessible and used responsibly. The company’s AI tools, like Copilot, are reshaping how people work across industries. Microsoft Corporation (NASDAQ:MSFT) offers cloud services, software, devices, and support, helping individuals and businesses reach their full potential.
Microsoft Corporation (NASDAQ:MSFT) continues to experience significant growth in cloud and AI sectors. In Q1 of its fiscal year 2025, its cloud revenue surpassed $40 billion, with AI business reaching a $13 billion annual run rate, up 175% year-over-year. Microsoft is focused on scaling its infrastructure globally, with data centers growing rapidly to meet both current and future AI demands. Azure remains a key player in AI infrastructure, with key partnerships like OpenAI driving mutual growth. AI tools like GitHub Copilot and Microsoft 365 Copilot are seeing strong adoption, helping businesses streamline workflows and improve productivity. The company’s AI-focused strategy is positioning it for continued success in the enterprise space.
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 339
Amazon.com, Inc. (NASDAQ:AMZN) is a diversified company, and is a global leader in e-commerce and cloud computing through AWS. Amazon offers a wide range of products, services like Amazon Prime, and devices. It also supports sellers, developers, content creators, and advertisers through various programs and services to help them grow their businesses and reach audiences. The company aims to be the most customer-centric company, guided by four principles: customer obsession, passion for invention, operational excellence, and long-term thinking.
In 2025, the tech behemoth plans to roll out a quick commerce service in India, targeting 20–30 minute deliveries to tap into the booming market. To tackle GPU shortages, Amazon launched “Project Greenland,” which uses a platform to prioritize AI projects based on potential returns, ensuring optimal resource use. Additionally, Amazon.com, Inc. (NASDAQ:AMZN) is investing $25 billion in robotics to automate its fulfillment centers, with the goal of saving $10 billion annually by the decade’s end. These strategies highlight the company’s ongoing focus on innovation and operational optimization.
While we acknowledge the growth potential of AMZN, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. 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 this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
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