In this article, we will take a look at some of the best safe stocks to buy according to hedge funds.
In times when you never know what you’ll wake up to the next morning, playing safe seems to be the wisest choice. Amid consistent market shifts and global uncertainties, it’s difficult not to lean towards reliability. With rising global recession risks and political uncertainties, protecting the capital has become a priority for many. As Charlie Munger, Vice Chairman of Berkshire Hathaway, once said,
“The idea of investing in a company just because it’s safe is not necessarily a good idea. But it’s a much better idea than investing in something that is clearly risky.”
If we think about a “safe” stock, a low-risk stock usually comes to our mind. While it’s true, there is even more to it. A safe stock generally stems from a well-established company possessing a strong balance sheet, a track record of decent performance, solid market positioning, and a dividend history. So, when looking for a safe stock, it’s important to look for not one, not two, but all of these metrics. In its entirety, these are usually “blue chip stocks” that are market leaders in the industries they operate.
Hedge funds, recognized for their strategies and in-depth market understanding, have long advocated for such stocks for their reliability and resilience. These managers carefully study the market trends and then weigh in on businesses that are deemed to deliver both value and predictability.
As reported by Reuters, hedge funds are fleeing the stocks of companies that are providing what customers want, and what they don’t need. As the signs of a global recession are becoming more and more evident, hedge funds are dumping their positions in consumer discretionary. “Hedge funds dumping consumer discretionary stocks strongly suggests they’re bracing for economic trouble, likely a recession,” mentioned Bruno Schneller, the Managing Director at Erlen Capital Management.
Similarly, a Goldman Sachs report, comparing the gains by Hedge Fund VIP basket and the broader market, indicates that the top 50 stocks preferred by hedge funds have collectively returned 10% in 2025 relative to the market’s 3% gain.
In a “Low-Risk Stocks Outperform within All Observable Markets of the World” paper by Nardin Baker and Robert Haugen, the differences in performance by low-volatility stocks and high-volatility stocks in developed and emerging equity markets worldwide were compared. The results revealed that stocks with low realized volatility exhibit higher future returns at lower risk than stocks with relatively higher realized volatility, thus contradicting the traditional inference that attributes higher returns to higher risks. Given this, we will take a look at some of the best safe stocks to consider.
A technical stock market chart. Photo by Energepic from Pexels
Our Methodology
In compiling a list of the 11 best safe stocks to buy according to hedge funds, we used Insider Monkey’s database of over 1,000 hedge funds, as of Q4 2024, and picked mega-cap stocks with positive five-year returns and next-year revenue growth. All of these factors are considered to ensure that the stocks selected yield low volatility and high safety. In addition, we also considered stocks that pay dividends to shareholders to ensure safety and reliability. The stocks are ranked in ascending order of the hedge funds having stakes in them.
At Insider Monkey, we are obsessed with hedge funds. 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).
11. Johnson & Johnson (NYSE:JNJ)
Number of Hedge funds holding: 98
Forward Dividend: $5.20
Johnson & Johnson (NYSE:JNJ) is a global healthcare company focusing on innovative medicines and medical technologies. Headquartered in New Jersey, the company serves a wide clientele, including retailers, wholesalers, healthcare professionals, and hospitals. While the pharmaceuticals cover therapy areas including immune disorders, cancer, neurological disorders, and metabolic diseases, the medical devices are developed for use in cardiovascular, orthopedic, neurovascular care, general surgery, and vision care fields. Incepted in 1886, the company believes health is everything.
With visionary changes in progress, Johnson & Johnson (NYSE:JNJ) is taking the lead. Just recently, the management unveiled plans to invest over $55 billion in the United States over the upcoming four years in the areas of manufacturing, R&D, and technology. This 25% increase in investment, in contrast to the last four years, showcases that the company is not just an ordinary business.
Traditionally recognized as a consumer health company, Johnson & Johnson (NYSE:JNJ) has successfully transitioned to a healthcare company by incorporating segments like pharmaceuticals and MedTech. The company’s focus on developing next-gen medicines and devices is what we are excited about the most. As part of the investment strategy, the company is set to build four planned new manufacturing facilities.
Additionally, the acquisition of Intra-Cellular Therapies, which expands the giant’s industry-dominating portfolio in central nervous system disorders, has the potential to contribute more than $5 billion in peak-year sales. Johnson & Johnson (NYSE:JNJ) has also posted an increase in dividends for the 63rd consecutive year in its latest earnings report. This commitment to returning shareholder value is something that not many realize.
This 2025, the management expects the company to report higher growth levels, with major contributions from TREMFYA and other immunology assets. Having said that, the sales growth rate is projected to stand between 3.3% to 4.3%, with $92 billion as a midpoint. The urge to shift the treatment paradigm makes JNJ a compelling case and one of the best safe stocks according to hedge funds.
10. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge funds holding: 104
Forward Dividend: $3.96
Exxon Mobil Corporation (NYSE:XOM) is among the largest global energy providers and chemical manufacturers that develop and apply advanced technologies. The company explores, develops, and markets oil, gas, and petroleum products. With mainly three main segments: Upstream, Downstream, and Chemical, XOM is committed to delivering safe energy solutions while fulfilling its environmental responsibility.
Like any other enterprise, Exxon Mobil Corporation (NYSE:XOM) has faced various challenges over the last few years due to global economic and political uncertainties. And yet, it keeps going strong, exhibiting resilience, decent performance, and strategic market footing.
We expect natural gas to be a key driver of Exxon Mobil Corporation (NYSE:XOM). In the last quarter of 2024, the company showcased a 9.0% YoY surge in natural gas, producing 8,331 million cubic feet per day. While this was attributed to the hike in both price and demand, the upsurge is anticipated to be even more in the times to come, provided the power sector demand and LNG shipping capacity. This can further be reinforced by the claims by not only the U.S. Energy Information Administration (EIA) expecting a rise in LNG exports but also the International Energy Agency foreseeing a demand-supply imbalance translating to further upward pressure on prices.
That’s not it. With the global expansion of data centers, the company’s growth is just getting started. In this AI era, the total count of data centers is forecasted to increase to 6,111 this year and stand at 8378 in 2030. As data centers increase electricity consumption, this could mean a natural gas price push, and thus enhanced revenues for Exxon Mobil Corporation (NYSE:XOM).
According to analysts, Exxon Mobil Corporation (NYSE:XOM) will witness an upside of around 15%, which makes it one of the best safe stocks. Although not something remarkable, the poor expectations for the broader market by the Economy Forecast Agency make the XOM upside figure fairly attractive.
9. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge funds holding: 123
Forward Dividend: $5.60
JPMorgan Chase & Co. (NYSE:JPM) is a U.S.-based financial services company, serving individuals and institutions in over 100 countries. The core offerings of the company include investment banking, treasury and securities services, asset management, private banking, and home finance. With core values like delivering excellent customer service, upholding integrity, and supporting the growth of employees, JPM is one of the largest diversified banking firms.
Given the company’s first-quarter results, with revenues up around 8% year-over-year, most of the segments performed well amid greater macroeconomic uncertainties. Despite the Fed cutting interest rates, the bank showcased an 11% year-over-year rise in net interest income. Keeping this performance in consideration, we have a positive reason to believe that JPMorgan Chase & Co. (NYSE:JPM) will continue to not only survive but also succeed in this challenging environment.
The bank has already taken some protective measures against the trembling market by making significant provisions for credit losses. As the threat of global recession looms over the market, JPMorgan Chase & Co. (NYSE:JPM) has increased loan loss provisions to safeguard itself. Recognizing the problem is one thing, but preparing itself considering a wide range of scenarios is what has boosted investor confidence in JPM. Jamie Dimon, Chairman & Chief Executive Officer, made the following comment when reaffirming that the investments in banks, branches, technology, and AI are going to continue no matter what the circumstances:
“We are prepared for any environment and that’s so we can serve clients. That’s not for any other reason. So — but we have plenty of capital and plenty of liquidity to get through whatever the stormy seas are.”
Analysts have offered a one-year price target for JPMorgan Chase & Co. (NYSE:JPM) as high as $305.00 and as low as $251.00, with the current price average surpassing the previous average target of $273.40. Even if we consider the lowest price prediction, it still shows an upside of 7%. Thus, JPMorgan Chase & Co. (NYSE:JPM) is one of the best safe stocks to buy.
8. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge funds holding: 150
Forward Dividend: $8.40
UnitedHealth Group Incorporated (NYSE:UNH) is a leading healthcare and well-being company that offers healthcare coverage, software, and data consultancy services. With four main segments: UnitedHealthcare, OptumHealth, OptumInsight, and OptumRx, the company serves a wide customer base, including patients, care providers, employers, and government entities. Headquartered in Hopkins, Minnesota, the giant is committed to improving healthcare systems.
If there were an award for best-in-class management, UnitedHealth Group Incorporated (NYSE:UNH) would be the clear winner. Better operating margins, improved returns, and no material EPS projection misses can be credited to the leadership. Amid the market chaos, the company is strategically repositioning itself for what’s yet to come, emphasizing fundamental industry change in the long haul.
UnitedHealth Group Incorporated (NYSE:UNH) is considered a market leader in the healthcare sector, an industry that is bound to perform well even during recessions. While this stability and resilience of the sector is a bullish thesis in itself, the high-growth potential from Optum can’t be overlooked. In its latest earnings report, the company revealed plans to serve an additional 800,000 people this year through its Medicare Advantage business and add 650,000 net new patients via the Optum Health segment. This reinforces the case that UnitedHealth Group Incorporated (NYSE:UNH) targets a niche market by leveraging AI and other technologies.
“Looking ahead, we see a long runway for further technology advances that will translate to more and sustained operating efficiency, which in turn drives opportunity for further innovation and advancements in the company and across the industry,” stated John Rex, the Chief Financial Officer.
According to analysts, UnitedHealth Group Incorporated (NYSE:UNH) is anticipated to witness an upside of around 37% over the year. This can not only be attributed to the sector it’s operating in, but also to the company itself. Thus, for investors valuing reliability and growth, UNH is just the right stock.
7. Apple Inc. (NASDAQ:AAPL)
Number of Hedge funds holding: 166
Forward Dividend: $1.00
Apple Inc. (NASDAQ:AAPL) is a California-based giant that designs, manufactures, and markets electronic devices, including smartphones, personal computers, tablets, and wearables. With a market capitalization of $3.052 trillion, the company operates through the Americas, Europe, Greater China, Japan, and Rest of Asia Pacific. The company is dedicated to proving that a business can and should be for the greater good.
Investors are worried about how deep the impact of tariffs will be for giants like Apple Inc. (NASDAQ:AAPL). Luckily for the firm that designs in the United States but manufactures in China, things turned when Trump’s administration spared smartphones and computers, among other electronic devices, from the tariff imposition. While Apple Inc. (NASDAQ:AAPL) is gradually transitioning to production houses in Vietnam and China, the complete shift away from China can be considered a long-term plan.
An analyst at Wedbush, Dan Ives, stood firm on his bullish stance owing to the long-term prospects of the company’s flagship ecosystem. Not only this, the 1.5 billion iPhone and 2.4 billion iOS installed base, coupled with other noteworthy services, is a shield for Apple Inc. (NASDAQ:AAPL) against this trembling market. No wonder it’s one of the best safe stocks to buy according to hedge funds.
Apart from the tariff considerations, the success of Apple Inc. (NASDAQ:AAPL) also depends on the creativity it brings into the upcoming models. We shouldn’t forget basic economics – the demand for a product doesn’t solely rely on the price; rather, factors like social perception and resale value have a crucial role to play. The company’s AI strategy, mainly Apple Intelligence, is driving customer interest, with expectations high for the yet-to-launch iPhone 17 series. If the company focuses on bringing significant innovations and offering value to its huge clientele, it has less to worry about.
6. Visa Inc. (NYSE:V)
Number of Hedge funds holding: 181
Forward Dividend: $2.36
Visa Inc. (NYSE:V) is a leading payments technology company that promotes digital currency instead of cash and checks. Founded in 1958, the company serves private clients, financial entities, government institutions, and merchants in more than 200 countries and territories. The core offerings of the company include payment cards, mobile payments, commercial payments, transaction processing services, and other related digital operations. Headquartered in San Francisco, California, the digital powerhouse aims to connect individuals and institutions.
Its excellent fundamentals, solid moat, high ROIC, EPS growth, and strong profitability make Visa Inc. (NYSE:V) one of the most reliable stocks in the U.S. market. If we deeply look into it, the company’s revenue reflects a consistent rise, with a model that extracts efficient profitability. Having said that, the business model of the giant is such that it makes it possible not to take credit risks, enabling it to generate massive cash with high and stable margins.
Visa Inc. (NYSE:V) continues to emphasize substantial cross-border growth, enhancing the number of cards at a significant single-digit rate. What’s even more amazing is that the revenue could be considered a proxy for nominal GDP in the long run, since Visa organically captures the growth that leads transactions to expand over time, not only with the economy but also with inflation.
The company is also investing in technology for practices like reducing fraud and improving overall security. Visa Inc. (NYSE:V) has allocated over $12 billion in the last five years to protect consumers all around the globe. Just recently, the management announced a big event to unveil product launches, solutions, and technology partners.
Summing it all up, Visa Inc. (NYSE:V) is built on bedrock fundamentals, including economies of scale, networks, a capital-light model, and indexed to inflation. As long as the company can retain these, we have a good reason to believe that it will hold strong when others shake. V is one of the best safe stocks to consider.
5. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge funds holding: 223
Forward Dividend: $0.04
NVIDIA Corporation (NASDAQ:NVDA) is a California-based tech company that designs and manufactures computer graphics processors, chipsets, and associated software. A pioneer of GPU-accelerated computing, the company is igniting modern AI and serving globally leading companies like Meta Platforms.
NVDA has been almost everyone’s favorite stock for the past few years. Nothing but exceptional, NVIDIA Corporation (NASDAQ:NVDA) is leading the market due to its innovation and technological semiconductor superiority. With the market tossing and turning, investors are valuing stocks that ought to rebound strongly, and that’s what NVDA is. When it can thrive as a fledgling start-up offering graphics cards, which sparked a heated and cyclical race, becoming a graveyard to many, we believe NVDA can survive anything.
The company has strategically prepared a three-year plan. Coupled with the Hopper series, NVIDIA Corporation (NASDAQ:NVDA) is going to focus on Blackwell GB200, Blackwell NV36 and NV72, and Blackwell Ultra (Blackwell 300), each with its own offering, during FY25-26. The development of Vera Rubin and Feynman is set to dominate the next two years, respectively.
NVIDIA Corporation (NASDAQ:NVDA) is also diversifying into new product lines that, when you think about the future, definitely come to your mind. Among these are AI factories, robotics, Autos with fast and capable chips, and Agentic AI. The demand for AI isn’t going to slow down either, with hyperscalers like Alphabet and Amazon showing a strong need to build AI. While Alphabet has already acquired $10 billion of Blackwells, Amazon is working towards making AI its fourth pillar, embedding it in segments like advertising, AWS, and ‘Buy for me’ products.
Additionally, the company masters the art of retaining the right people. Since NVIDIA Corporation (NASDAQ:NVDA) is all about innovation and creative culture, the workforce hired, including engineers and architects, showcases teamwork, technical knowledge, and experience. This is one of the core strengths of the giant, particularly as the company is entering a new era of digital realities.
4. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge funds holding: 234
Forward Dividend: $0.80
Alphabet Inc. (NASDAQ:GOOGL) is a global technology company that provides web-based search, consumer content, enterprise solutions, software engines, and advertisements through its subsidiaries. Incorporated in 1998, the segments of the company include Google Services, Google Cloud, and Other Bets. The powerhouse is dedicated to making the world’s information universally accessible and useful.
You might not think about it, but your everyday habit of turning to Alphabet Inc. (NASDAQ:GOOGL) search engine, Google, speaks volumes about its long-term growth and potential. Coupled with the AI efforts by the company, there is no questioning its position as the world’s largest digital advertiser. This is a bullish factor in itself, considering that the market is anticipated to project a 15.4% CAGR by 2030. Similarly, amid a continuously growing video streaming market, the company’s YouTube segment is also bound to expand.
In addition to these, a secular cloud and AI transition further strengthen the bullish case. Among the “Big Three” global cloud infrastructure providers is Google Cloud, a testament to the company’s AI game. Just recently, Alphabet Inc. (NASDAQ:GOOGL) reaffirmed its plan to invest an outstanding $75 billion in capex.
The company’s direction with the recent partnerships confirms that it is heading north. Whether we talk about the famous Reddit platform that embeds Google’s Gemini AI to power its conversational interface, or Samsung Electronics that leverages Google Gemini to power its home robot companion, Alphabet Inc. (NASDAQ:GOOGL) AI is everywhere.
The company’s return on capital (ROE), standing at 32%, is traditionally quite strong. The operating margins, too, are scaling over the past quarters. It wasn’t luck that expanded these margins, but the giant’s rigorous efforts to drive efficiency. With that being said, the company’s Waymo initiative is the seal of the positive outlook as the robotaxi market is likely to be the fastest-growing segment with an expected 60% CAGR for the next decade. Thus, these initiatives make Alphabet Inc. (NASDAQ:GOOGL) one of the best safe stocks according to hedge funds.
3. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge funds holding: 262
Forward Dividend: $2.10
Meta Platforms, Inc. (NASDAQ:META) is a multinational technology company that develops social media applications. Dedicated to connecting people and growing businesses, the company has two segments: Family of Apps (FoA) and Reality Labs (RL). While the FoA segment includes Facebook, Instagram, Messenger, and WhatsApp, among other services, the RL offering comprises augmented, mixed, and virtual reality-associated hardware, software, and content.
The market is heavily focused on Advantage+, Meta AI, Threads, and CapEx. While Advantage+ campaigns are signaling strong adoption, with a 70% YoY growth in the past quarter, the Meta AI assistant is anticipated to witness a 1 billion user adoption by the end of the year. A measure taken to bring this vision to reality is the deployment of Meta AI to WhatsApp. Mark Zuckerberg, the CEO of Meta Platforms, Inc. (NASDAQ:META), made the following comment:
“I expect this is going to be the year when a highly intelligent and personalized AI assistant reaches more than 1 billion people, and I expect Meta AI to be that leading AI assistant.”
There hasn’t been any change in the revenue guidance in terms of CapEx since the tariff drama. This could either be due to none of the hyperscalers revising their guidance or because the management thinks that it is not as vulnerable to tariff risks as the ones on the sidelines anticipate. Out of its segments, Reality Labs is the one relatively most exposed to the tariff implications, particularly due to Quest headsets and Ray-Ban Meta smart glasses. However, if we look at their contribution to the total revenue, they still lag behind the other money-making segments of Meta Platforms, Inc. (NASDAQ:META). Thus, the impact isn’t going to be much.
According to the one-year price target of $722.91 by analysts, Meta Platforms, Inc. (NASDAQ:META) is anticipated to witness an upside of around 44%. Additionally, the growth estimates for the next quarter stand at 9.95% for the company, in contrast to the 4.85% estimate for the broader market. From this, we can say that META is definitely the stock when you’re playing safe.
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge funds holdings: 317
Forward dividend: $3.32
Microsoft Corporation (NASDAQ:MSFT) is a software company recognized for its Windows operating systems and Office productivity suite. Headquartered in Washington, the giant operates through three segments: productivity and business processes, intelligence cloud, and more personal computing. The company considers itself on a mission to empower individuals and organizations to achieve more.
Analysts believe that Microsoft Corporation (NASDAQ:MSFT) is a compelling long-haul investment. Although surrounded by similar mega-cap tech titans, MSFT provides a software-centric, yet diverse business model offered by none other.
In today’s era, a business that is strategically evolving through consistent innovations leads the stock market, and that’s what Microsoft Corporation (NASDAQ:MSFT) is. Stealing the spotlight among the company’s initiatives is its Stargate venture, a $500 billion data center project led by SoftBank Group Corp and OpenAI. The venture is weighing up expansion possibilities, particularly in the U.K., to set up AI infrastructure. As leading countries like France and Germany acknowledge the necessity of an AI ecosystem, Stargate is considering expanding internationally.
It’s the company’s favorable sales mix that makes it a safe haven for investors, especially under Trump’s tariff regime. Having said that, the minimal resilience of hardware, in contrast to its competitors, makes Microsoft Corporation (NASDAQ:MSFT) less vulnerable to reciprocal tariffs. The segments contributing the most to the revenue are productivity and business processes (PBP) and intelligent cloud (IC). Thus, in this tariff-heavy environment, the margins for companies relying significantly on global raw materials ought to slide, something MSFT is considerably protected against.
Additionally, the management is focused on its promise to scale and adjust the allocation of capex spending driven by both short- and long-term demand signals. This can be reinforced by the company’s recent cancellation of various data center leases, signaling a transition to short-lived assets that translate to revenue growth. Combined with Azure’s reacceleration, underscoring incremental cloud computing capacity coming online in the times ahead, Microsoft Corporation (NASDAQ:MSFT) has emerged as a valuable opportunity.
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge funds holding: 339
Forward Dividend: $0
Amazon.com, Inc. (NASDAQ:AMZN) is a leading online retailer widely recognized for its e-commerce, cloud computing, and digital streaming services. Incepted in 1994, the company operates through three segments: North America, International, and Amazon Web Services (AWS). The giant mainly serves developers, consumers, advertisers, employees, and enterprises.
Behind Amazon.com, Inc. (NASDAQ:AMZN) as a solid case is the current price level. With the stock trading lower, analysts consider it a buying opportunity, especially given its huge AI and robotic investments that are at the forefront of what’s next. While the short-term position of the company shows a somewhat blurred picture, the long-term efficiency gains are quite evident when considering its footing in AI, fueling a robotics paradigm shift.
The 750,000 mobile robots and several thousand robotic arms in its warehouses highlight that such a vision is already coming to life. These initiatives are anticipated to generate as much as $10 billion in savings annually over a 5-year time period. When we say Amazon.com, Inc. (NASDAQ:AMZN) is all-in on AI capability, we’re not exaggerating. The cloud unit of the e-commerce powerhouse has unveiled new AI chips and foundation models, and all of this is done to attract AI developers.
And here’s the best part. Jeff Bezos, the CEO of Amazon.com, Inc. (NASDAQ:AMZN), is apparently overseeing the development of 1,000 internal AI applications at Amazon and the enhancement of AWS’s AI infrastructure. The company’s $8 billion investment in Anthropic and the joint development of a supercomputer for AI training speak about its aggressive efforts to gain an edge in high-end AI services.
The one-year price target of $248.71 translates to an upside of more than 40%. In general, analysts, when providing the price targets for Amazon.com, Inc. (NASDAQ:AMZN), are confident about the bright and thriving future of the company. For investors valuing long-haul gains, AMZN is a smart and secure pick.
Overall, AMZN ranks first on our list of best safe stocks to buy according to hedge funds. While we acknowledge the potential of safe stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher 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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