In this article, we discuss the 11 best stocks to buy in falling markets now.
Even though the year 2024 was not kind to certain sectors within the US economy, the broader outlook for the stock market heading into the new year was more than rosy. Investment banks generally anticipated moderate economic growth for the US in 2025. For example, Deutsche Bank forecasts a growth rate of approximately 2%, noting that 2025 will not be a year of rapid GDP growth. Meanwhile, JP Morgan’s Global Investment Strategy team emphasized a foundation of strength stemming from 2024’s robust market returns. They highlighted themes such as easing global policies and rising capital investment as key drivers for the coming year. Their report, Outlook 2025: Building on Strength, suggested that the US economy was well-positioned to capitalize on these favorable conditions.
Read more about these developments by accessing 10 Best AI Data Center Stocks and 10 Buzzing AI Stocks According to Goldman Sachs.
However, inflation remained a focal point in economic discussions. Top economic experts project that inflation rates will decelerate in 2025, approaching the Federal Reserve’s 2% target by the second half of the year. This outlook suggests a stabilization of price levels, which could influence monetary policy decisions. US Bank Chief Economist Beth Ann Bovino offered insights into the Federal Reserve’s anticipated actions. She predicted that the Fed would implement two interest rate cuts in 2025, citing continued economic strength. Bovino also noted that proposed tariffs and tax cuts by the new administration could exert additional inflationary pressures, potentially complicating the Fed’s policy decisions.
The fiscal policies of the new administration are expected to play a significant role in shaping the economic landscape. Bank of America analysts Claudio Irigoyen and Aditya Bhave discussed the interplay between US policy changes and the global economy. They anticipated that fiscal policy would be expansionary through tax cuts and acknowledged that proposed tariff increases could have a modest impact on consumer price inflation. Their analysis underscored the importance of balancing growth initiatives with inflation control. In terms of sector performance, Standard Chartered Bank expressed optimism about equities and commodities. Entering 2025, the bank was overweight in equities and gold, citing a resilient global economy with a projected GDP growth of 3%.
Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and Beyond the Tech Giants: 35 Non-Tech AI Opportunities.
To make our list of the best stocks in falling markets, we first made a list of stocks that have lost 15% or more over the past 12 months and are in the telecommunications, technology, or software infrastructure industries. Then, we picked the stocks that had the highest number of hedge fund investors in Q3 2024 courtesy of Insider Monkey’s database of 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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Best Stocks to Buy in Falling Markets Now
11. Axcelis Technologies, Inc. (NASDAQ:ACLS)
Number of Hedge Fund Holders: 29
Decline in Share Price Over Past 12 Months: 49.1%
Axcelis Technologies, Inc. (NASDAQ:ACLS) markets ion implantation and other processing equipment used for the fabrication of semiconductor chips. The following elements demonstrate why this company is an excellent investment choice. Firstly, as per the report for the third quarter of 2024, the company reported revenue of $256.6 million, compared to $256.5 million for the second quarter of 2024, demonstrating consistent sales performance quarter-over-quarter. In addition, Axcelis Technologies served as a top-level Platinum Sponsor at the International Conference on Ion Implantation Technology 2024 in Japan. The company focused on emerging technologies related to doping and annealing processes, device applications, equipment, metrology and modeling. Moreover, the company has announced the establishment of new service offices in Chitose, Hokkaido and Kumamoto to support an expanding customer base in Japan.