In this article, we will take a look at the 11 best beginner stocks to invest in now.
The Downsides to Stocks Rallying Higher
Stocks in the United States are rallying high, but some strategists are eyeing a few risks. On December 5, Max Kettner, Chief Multi-Asset Strategist at HSBC, appeared in an interview on Yahoo Finance to discuss the market outlook heading into 2025. Kettner shared that investors and analysts alike hold extremely bullish expectations of the market in 2025. While that may likely be true, an extremely bullish market may pose a significant risk and have multiple downsides.
He stated that the market will likely see strong upsides on the earnings front, leading to higher yields, which will leave a question on the future of the cutting cycle and whether the Fed will have to commence a rate hike again. He emphasized that higher terminal rates will bring in bond volatility and impact nearly every risk asset in the market.
Speaking of positives, Kettner highlighted that the next few quarters exhibit pretty low growth expectations and earnings expectations for the S&P. He reiterated that with a much lower growth rate, the cutting cycle will be executed as planned. As for inflation, he highlighted the importance of super core inflation, also referred to as underlying inflation. He believes super core inflation is more likely to decline, especially in the first half of the year, adding that he is not as worried about inflation as he was almost three to four months ago.
Kettner stated that the next six to seven months will deliver a supportive market environment for equities in the S&P, especially for global equities. He also believes that the market will see a 12% to 13% upside in the next 12 months until the end of 2025. While Kettner remained inclined to tech stocks, he added that other sectors, such as industrials, will also see a “mini re-acceleration.”
He emphasized that the market rally will go beyond the S&P especially with the current “goldilocks” backdrop, high growth projections, and consensus expectations, benefiting other asset classes. Kettner shared that the ideal portfolio for investors will be tech stocks and a combination of stocks in other sectors, especially industrials and US banks. He added that these sectors are likely to benefit from regulatory changes and the current economic backdrop.
As economic and political turmoil encapsulates the market, some stocks have been performing consistently well over the years, positioned as solid investments, especially for new investors. That said, let’s take a look at the 11 best beginner stocks to invest in now.
Stocks
Our Methodology
To come up with the 11 best beginner stocks to invest in now, we compiled a list of the top blue chip stocks. We then tracked the hedge fund sentiment of each stock and picked the most popular ones. Our list is in ascending order of the number of hedge fund holders as of Q3 2024, according to Insider Monkey’s database.
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).
11 Best Beginner Stocks To Invest In Now
11. The Home Depot, Inc. (NYSE:HD)
Number of Hedge Fund Holders: 82
The Home Depot, Inc. (NYSE:HD) is a home improvement retailer based in the United States. The company sells tools, construction products, and appliances. The company was founded in 1979 and now owns more than 2,300 stores and over 780 branches across North America. The company’s financial performance reflects its position on our list and explains why 82 hedge funds were bullish on the stock at the close of Q3 2024.
Rapid expansion has been the company’s economic moat. The Home Depot’s (NYSE:HD) network of downstream supply chain facilities, including its 19 direct fulfillment centers, has allowed the company to reach 90% of the population in the United States through same-day or next-day delivery experiences. In addition to that, the company has also made recent investments to expand its assortment within these facilities to allow for faster delivery across other product categories, supported by an improved and immersive digital experience.
Amid macroeconomic uncertainty, The Home Depot, Inc. (NYSE:HD) reported solid financial results in the third quarter of 2024, with total revenue reaching $40.2 billion, up by 6.6% from the third quarter in the fiscal year 2023. Operating income, on the other hand, remained constant at $5.4 billion. By the end of the full financial year of 2024, the company expects to open 12 new stores and increase sales by approximately 4%.
Carillon Tower Advisers stated the following regarding The Home Depot, Inc. (NYSE:HD) in its Q3 2024 investor letter:
“While Home Depot, Inc.’s (NYSE:HD) recent reported earnings were somewhat tepid, the market seems to be pricing in an inversion of the company’s sales, driven by lower interest rates. Home Depot reported its seventh consecutive quarter of same-store sales declines, giving back substantial gains that it enjoyed during the pandemic. High mortgage rates have also put a damper on existing home sales. People typically spend the most on home repairs and improvements in years when they buy or sell houses, often conducting both transactions in the same year.”
10. Merck & Co., Inc. (NYSE:MRK)
Number of Hedge Fund Holders: 86
Merck & Co., Inc. (NYSE:MRK) is a pharmaceutical company headquartered in the United States. The company specializes in the production of vaccines and the provision of hospital care services. In the third quarter of 2024, Merck & Co., Inc. (NYSE:MRK) logged $16.7 billion in total sales, up by 4% from the third quarter in 2023. Its star cancer drug, KEYTRUDA saw an increase in sales by 17% to reach $7.4 billion, accounting for nearly 50% of the revenue.
The company is a long-standing entity with a strategic position to expand. During the quarter, Merck & Co., Inc. (NYSE:MRK) also completed the acquisition of Investigational B-Cell Depletion Therapy, CN 201, from Curon Biopharmaceutical. In addition to that, the company also presented data for four approved medicines and six pipeline candidates providing coverage for more than 20 types of cancer. Besides its expansion plans, Merck & Co., Inc. (NYSE:MRK) also received regulatory approvals and made significant advancements for its existing drug pipeline over the past few months.
For the complete financial year 2024 outlook, Merck & Co., Inc. (NYSE:MRK) expects revenue to range between $63.6 billion and $64.1 billion. The company is positioned to become a market leader in the biopharmaceutical industry attributable to its increasing popularity, expanding drug pipeline, and growing financial performance. Analysts are also bullish on the stock and their median price target of $130 represents an upside of 25% from current levels.
Oakmark Equity and Income Fund stated the following regarding Merck & Co., Inc. (NYSE:MRK) in its Q3 2024 investor letter:
“Merck & Co., Inc. (NYSE:MRK) is a global pharmaceutical firm with leading oncology, vaccine and animal health franchises. Premier products in Merck’s portfolio include Keytruda, Gardasil, Winrevair and Bravecto. Outsized contributor Keytruda is an immuno-oncology drug that treats several cancers and tumors. Keytruda is an astounding clinical and commercial success that is on track to become one of the best-selling prescription drugs to date. Investor angst surrounding Keytruda’s pending U.S. patent expiration in 2028 presented a chance to buy shares at a discounted valuation. We believe opportunities to extend Keytruda’s duration through life cycle management are underappreciated. More importantly, discounted cash flows from products already on market cover today’s entire stock price, meaning there is minimal value ascribed to a promising pipeline with strong sales potential. We believe Merck is led by a capable management team that looks to reinvest these cash flows in an accretive manner.”
9. Walmart Inc. (NYSE:WMT)
Number of Hedge Fund Holders: 88
Walmart Inc. (NYSE:WMT) is one of the biggest retail companies in the world, and it ranks ninth on our list of the best beginner stocks to invest in right now. It operates retail outlets, wholesale units, and e-commerce sites in more than 20 countries that serve more than 240 million customers every week. The company reported solid financial results in the fiscal third quarter of 2025, with e-commerce sales growing by 27% and its advertising business growing by 28% on a global level. Overall, consolidated revenue was worth $169.6 billion, up from $160.8 billion in the fiscal third quarter of 2024.
Its solid financial performance and growing momentum in e-commerce have also improved the liquidity situation of WMT. By the end of FQ3 2025, Walmart Inc. (NYSE:WMT) had $10 billion in cash and cash equivalents, an operating cash flow of $22.9 billion, and a free cash flow worth $6.2 billion. Over the past few months, the company has shown interest in AI-backed technologies, having launched a generative AI-powered product search tool and a data analytics platform allowing customers to shop more effectively and receive intuitive product recommendations.
Speaking of adaptive retailing, On October 9, Walmart Inc. (NYSE:WMT) revealed its Immersive Commerce platform backed by artificial intelligence, generative AI, and augmented reality, to offer personalized shopping experiences to customers. Keeping its growth trajectory in mind, in the full fiscal year of 2025, Walmart Inc. (NYSE:WMT) expects net sales to increase by 4.8% to 5.1%, a significant increase from its previous guidance as of August 15, 2024. Operating income is expected to follow similar growth trends with expectations to increase by almost 8.5% to 9.25%.
8. Bank of America Corporation (NYSE:BAC)
Number of Hedge Fund Holders: 98
Bank of America Corporation (NYSE:BAC) is a financial services company that provides investment and wealth management services to individuals, institutions, small to medium-sized businesses, large corporations, and the government. Some of its subsidiaries include Merrill, BofA Securities, and Bank of America Private Bank. As of October 15, Bank of America Corporation (NYSE:BAC) and its subsidiaries together served 69 million consumers in the United States and small business clients. In addition to that, the company had a network of 3,700 financial centers and 15,000 ATMs in the country.
The company has a vast ecosystem which is challenging for competitors to replicate. However, this is not the only thing setting the company apart. Bank of America Corporation (NYSE:BAC) is also accelerating its digital capabilities, with nearly 58 million digital users. As of October 15, the company saw an increase in logins by active customers with a record 400 million transactions on Zelle, a mobile application for digital payments.
In addition to that, Life Plan, a digital platform to help users develop and follow financial goals has been used by almost 16.8 million customers since its inception in 2020. Lastly, the CashPro App, in use by corporate and commercial clients, recorded quarterly payment approvals worth $283 billion, representing a 47% growth rate. Overall, Bank of America Corporation (NYSE:BAC) logged net income worth $6.9 million and revenue worth $25.3 billion, up by $178 million reflecting an increase in investment banking fees and asset management.
Diamond Hill Capital stated the following regarding Bank of America Corporation (NYSE:BAC) in its Q2 2024 investor letter:
“Other top contributors in Q2 included Bank of America Corporation (NYSE:BAC) and Extra Space Storage. Shares of financial services company Bank of America rose in the quarter as it looks increasingly likely net interest income will inflect and begin growing again in 2024’s back half and into 2025.”
7. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 105
JPMorgan Chase & Co. (NYSE:JPM) provides financial services to millions in 100 countries from across the globe. Some of its services include investment banking solutions, risk management services, and capital-raising services to companies, institutions, and the government. JPM is one of the best beginner stocks to invest in right now and we say that because of its strong financial performance and outlook on innovation. Over the past few months, the company has made advances to offer biometric payment options and has launched features in partnership with Oracle to streamline transactions across the treasury, trade, and commerce sectors.
Speaking of strong financials, JPMorgan Chase & Co. (NYSE:JPM) logged $42.7 billion in revenues, up by 6%, and had assets under management worth $3.9 trillion, up by 29%, by the end of the third quarter of 2024. Similarly, the company reported close to $13 billion in net income and $23.5 billion in net interest income, up by 3%. The company suggests that amid geopolitical tensions and economic turmoil market revenues have been consistent. In addition to market performance, JPMorgan Chase & Co. (NYSE:JPM) is also satisfied with its operational efficiencies due to the growing use of artificial intelligence to complete tedious tasks.
The company’s solid ecosystem is evident by its large customer base. As of Q3 2024, JPMorgan Chase & Co. (NYSE:JPM) had more than 82 million consumers in the United States, 6 million small businesses, 40,000 large and medium-sized businesses, and thousands of institutional clients. Overall, 105 hedge funds held stakes in JPM at the close of Q3 2024, according to our Insider Monkey database.
6. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 112
UnitedHealth Group Incorporated (NYSE:UNH) ranks sixth on our list of best beginner stocks to invest in right now. It is a multinational health insurance and services company based in the United States that operates several subsidiaries including UnitedHealthcare, Optum, Change Healthcare, and United Health Foundation. On the financial front, UnitedHealth Group Incorporated (NYSE:UNH) logged $100.8 billion in revenue, up by nearly $8.5 billion, in the third quarter of 2024. Revenue was primarily driven by growing customers for its Optum and UnitedHealthcare segments. In addition to that, by the end of Q3 2024, customers served by UNH’s commercial domestic offerings grew by nearly 2.4 million, to reach 29.7 million.
The company is notorious for expansion and has started offering its services to more locations over the past few months. In addition to that, as part of its Medicare Advantage Plan for 2025, UnitedHealth Group Incorporated (NYSE:UNH) plans to reduce the cost of healthcare for patients with chronic diseases. On November 1, the company announced that it is expanding its individual and family plans to 30 more states on the Health Insurance Marketplace. The expansion aligns with the company’s mission to offer equitable and affordable healthcare services to people across the United States.
For its 2025 outlook, UnitedHealth Group Incorporated (NYSE:UNH) expects revenues to range between $450 billion and $455 billion, and cash flows from operations are projected to reach $32 billion to $33 billion. Overall, analysts are also bullish on the stock, and their median price target of $635 represents an upside of 8% from current levels.
Mairs & Power Growth Fund stated the following regarding UnitedHealth Group Incorporated (NYSE:UNH) in its Q3 2024 investor letter:
“One great example of this is UnitedHealth Group Incorporated (NYSE:UNH), a long-term holding of the Fund. Founded in 1974 in Minnetonka, Minnesota, UnitedHealth Group has grown to become the largest managed care organization in the United States. UnitedHealth Group is already working on multiple AI use cases that could potentially save the company billions of dollars in efficiencies over the next several years. For instance, the company’s call centers receive more than a million calls per day. AI could potentially divert or resolve customer concerns without human interaction. We fully admit the company is not perfect and has its ups and downs. Earlier this year, the company was caught up in a large data breach from a company it acquired in 2022. Healthcare is also deeply political, and UnitedHealth Group can often find itself in the political crosshairs during an election year. We’ve seen these political risks play out before and believe UnitedHealth Group will again emerge unscathed.”
5. Berkshire Hathaway Inc. (NYSE:BRK-B)
Number of Hedge Fund Holders: 120
Berkshire Hathaway Inc. (NYSE:BRK-B) is a multinational company with businesses in multiple industries including financial services, insurance, energy, transportation, rail, and utility.
Berkshire Hathaway Inc. (NYSE:BRK-B) holds a strong position in the world, especially in the United States. It has ownership rights and control over multiple major companies across the globe, contributing to its position on our list and its strong financial performance. In the third quarter of 2024, the company logged nearly $93 billion in revenue. Of the total revenue, insurance premiums were $22 billion and its sales and services segment accounted for nearly $39 billion. While the company saw a slight decline in revenues during the quarter, analysts remain bullish on the stock and their median price target points to an upside of 13% from current levels.
Berkshire Hathaway Inc.’s (NYSE:BRK-B) competitive edge lies in its presence in multiple industries which diversifies its risk and makes it one of the best beginner stocks to invest in right now. According to Insider Monkey’s database, 120 hedge funds held stakes in Berkshire Hathaway Inc. (NYSE:BRK-B), as of Q3 2024.
4. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 158
Apple Inc. (NASDAQ:AAPL) is one of the best beginner stocks to invest in right now. The company behind the iPhone also sells a range of digital and entertainment products including iCloud, Apple Pay, Apple Music, and Apple TV+. The company beat its fiscal fourth-quarter earnings expectations by reporting $94.9 billion in revenue which was up by 6% year-over-year. Of this, its product revenue accounted for nearly $70 billion and its services segment generated $24.9 billion. Its business performance brought in almost $27 billion in operating cash flow, making it possible for Apple Inc. (NASDAQ:AAPL) to return more than $29 billion to its shareholders.
During the quarter, the company not only released its new product line-up but made significant advances in Apple Intelligence. Keeping the momentum in check, on October 30, Apple Inc. (NASDAQ:AAPL) launched new chips, M4, M4 Pro, and M4 Max, built to boost efficiency and performance. Not only is the chip faster than previous versions but it also has a greater memory bandwidth. In addition to that, the chip is built to support two external displays, separate from a built-in display. On the same day, Apple Inc. (NASDAQ:AAPL) announced that the new MacBook Pro now comes with the powerful M4 chip and is built to seamlessly power Apple Intelligence.
The company not only has a solid ecosystem with a loyal customer base, but it is also innovating its offerings to enhance the customer experience and attract new ones.
Columbia Contrarian Core Fund stated the following regarding Apple Inc. (NASDAQ:AAPL) in its Q2 2024 investor letter:
“Apple Inc. (NASDAQ:AAPL) – Despite the stock falling after announcing earnings in late May, Apple regained ground toward the end of the quarter, fueled by the company’s long-awaited AI announcement at its annual Worldwide Developers Conference (WDC). At the conference, the company showcased some of its new AI features powered by Apple Intelligence that would be coming to Apple products and also annonced a partnership with ChatGPT. Investors greatly welcomed the announcement of Apple’s AI strategy and the stock surged, passing Microsoft as the world’s most valuable company (although this hallmark wouldn’t last). Beta testing of these new features will be coming later this summer, but the initial promise and excitement looks to be a potential catalyst for an upgrade cycle, as the company looks to persuade users who have had the same smartphone for years to consider an upgrade.”
3. Visa Inc. (NYSE:V)
Number of Hedge Fund Holders: 165
Visa Inc. (NYSE:V) is a multinational payment card service provider based in the United States that facilitates electronic fund transfers across the globe. The company also provides commercial patent solutions, sells cards, has virtual cards, and offers B2B payment options. The company increased its net revenue by 12% in FQ4 2024 to $9.6 billion and by 10% in FY 2024 to $35.9 billion. In addition to that, Visa Inc. (NYSE:V) saw immense growth in its payments volume, especially cross-border volume, which grew by 8% and 15% respectively, for the fiscal year ended 2024.
Accelerating its digital payments momentum, on October 29, Visa Inc. (NYSE:V) announced the launch of new features to improve push-to-wallet experiences. With the new update, users will now be able to use virtual cards in mobile wallet ecosystems such as Apple Pay and Google Pay. More recently, on November 12, the company announced that its Visa Flexible Credential system is going global and will be launched in the United States and the United Arab Emirates.
Overall, Visa Inc. (NYSE:V) processed transactions worth $61.5 billion for the three months ended September 30, 2024. The company currently has more than 4.6 billion cards in circulation with over 150 million merchant locations across 200 countries. For the twelve months ended September 30, 2024, the company facilitated payment transactions worth $303 billion. The company’s strong ecosystem and financial network make it one of the best stocks for beginners to invest in right now.
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ:MSFT) is a long-standing technology company with solid fundamentals. Over the past few months, the company has accelerated its position on the innovation front through strong partnerships and new product releases, reflecting its position in the tech sector. Recently, the company partnered with Accenture and Avanade to help businesses transform their functions using artificial intelligence and Microsoft Copilot. In addition to that, the company also launched new and improved adapted AI models for various industries. The new models will help organizations address their particular AI needs with greater efficacy and will readily be available through the Azure AI model catalog.
These partnerships and advancements helped Microsoft Corporation (NASDAQ:MSFT) report solid financial results, giving it a strong head start to the fiscal year 2025. In the fiscal first quarter of 2025, the company logged $65.5 billion in revenue, up by 16% year-over-year, and $24.7 billion in net income, up by 11% from the same quarter last year. Microsoft Corporation (NASDAQ:MSFT) attributes its performance to its AI-backed transformation, resulting in improved workflow, operational efficiencies, and happy customers.
Microsoft Corporation (NASDAQ:MSFT) has a sustainable business model, especially due to its subscription-based productivity suite which has been growing. Revenue for its productivity and business processes segment grew by 12% to reach $28.3 billion in the fiscal first quarter of 2025. Its star product, Microsoft 365 (commercial products and cloud services), saw a 12% increase in revenue during the same period. Overall, analysts are also bullish on the stock and their median price target implies an upside of 14% from current levels.
Baron Opportunity Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q3 2024 investor letter:
“Microsoft Corporation (NASDAQ:MSFT) is the world’s largest software and cloud computing company. Microsoft was traditionally known for its Windows and Office products, but over the last five years it has built a $147 billion run-rate cloud business, including its Azure cloud infrastructure service and its Office 365 and Dynamics 365 cloud-delivered applications. Shares gave back some gains from strong performance over the first half of this year. For the fourth quarter of fiscal year 2024, Microsoft reported a strong quarter with total revenue growing 16%, in line with the Street; Microsoft Cloud up 22%; Azure up 30%; 43% operating income margins; and 36% free cash flow margins. Core Azure growth came in one point shy of expectations, however, due to a soft European market and continued constraints on AI compute capacity. In the same vein, while Microsoft reiterated its fiscal 2025 targets of double-digit top-line and operating income growth, quarterly guidance called for Azure growth to slow a bit before accelerating in the back half of the fiscal year, as capital expenditures increase, yielding an expansion of AI compute capacity. We believe this investment is a leading indicator for growth, with more than half of the spend related to durable land and data center build outs, which should monetize over the next 15-plus years. We remain confident that Microsoft is one of the best-positioned companies across the overlapping software, cloud computing, and AI landscapes, and we remain investors.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 286
Amazon.com, Inc. (NASDAQ:AMZN) ranks first on our list of the best beginner stocks to invest in right now. The technology company is an e-commerce giant that also provides streaming and data cloud services. The company launched its e-commerce platform in 1994 and is now close to capturing 40% of the market in the United States. In addition to its growing customer base, the company also has a strong cash flow situation. For the trailing 12 months ended September 30, Amazon.com, Inc. (NASDAQ:AMZN) generated $112.7 billion in operating cash flow, up by 57% from the trailing 12 months ended September 30, 2023. During the same period, the company increased its free cash flow to $47.7 billion, up from $21.4 billion in 2023.
For the fourth quarter of 2024, Amazon.com, Inc. (NASDAQ:AMZN) expects net sales to range between $181.5 billion and $188.5 billion, up by 7-11% year-over-year. Operating income, on the other hand, is expected to range between $16 billion and $20 billion, up from $13.2 billion during the fourth quarter of 2023. Overall, AMZN is seeing significant growth in AWS sales and its international segment, with sustained growth in its North America segment. At the end of Q3 2024, 286 hedge funds held stakes in AMZN, according to Insider Monkey’s database.
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.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
