In this article, we are going to discuss the 12 best Fortune 500 stocks to buy according to hedge funds.
The Fortune 500 list includes companies that generate the highest revenue in the United States. In total, Fortune 500 companies represent two-thirds of the US GDP with $18.8 trillion in revenues, $1.7 trillion in profits, and $43 trillion in market value (as of March 28, 2024), and they employ approximately 31 million people worldwide. Large-cap stocks, which form most of the Fortune 500, are typically safer investments and offer relative stability in times of economic difficulty.
READ ALSO: 11 Best Performing Dow Stocks so Far in 2025
After registering significant gains over the last two years, the broader US market fell sharply on Friday in the wake of weaker-than-expected economic reports and softening consumer demand. A recent report by S&P Global showed that business activity in the US is slowing down, with growth decelerating to a 17-month low. The slowdown is primarily a reflection of rising uncertainty about the business environment, especially in relation to federal government policies regarding domestic spending cuts and the constant threat of looming tariffs.
There are also serious concerns of high inflation due to the said tariffs, causing consumers to be more wary of their spending habits. According to the Tax Foundation, if the tariffs threatened by President Trump are actually imposed, it would amount to an average tax increase of more than $800 per US household in 2025. The tariffs on China alone will add $172 to the tax burden per household, while the rumored imposts on Canadian oil will drive up the price of gas, affecting the entire economy.
That said, some policy measures promised by the Trump administration can also bode well for US corporations and the overall business environment, including taking a less heavy-handed approach towards mergers than under President Biden’s administration. Moreover, the cornerstone of Trump’s second term will be to relax tax policies and extend or make permanent many of the provisions of the 2017 Tax Cuts and Jobs Act that expire at the end of 2025. The President has campaigned on further reducing the base corporate rate to 20%, with an additional cut to 15% for companies that produce goods on American soil.
Another important thing to be mindful of was recently highlighted by Bank of America in a note earlier this month, warning investors of the high concentration levels in the market, where a handful of firms command the lion’s share of investments. This is partially because of passive investing, where investors shovel money into indexes indiscriminately. Passive funds now hold a higher percentage of the US stock market than active funds, which can distort market prices and severely mislead investors. To avoid a potential drawdown, the bank has advised its investors to diversify and consider investing in baskets of quality stocks with lower exposure to the Magnificent Seven stocks.
With that said, here are the Best Large Cap Fortune 500 Stocks According to Hedge Funds.
Image by Steve Buissinne from Pixabay
Methodology:
To collect data for this article, we referred to the top 50 companies among the Fortune Global Rankings as of January 20, 2024. We then picked out 12 companies with the highest number of hedge fund investors according to the Insider Monkey database as of Q4 2024. Following are the Best Fortune 500 Stocks to Buy According to 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).
12. Costco Wholesale Corporation (NASDAQ:COST)
Number of Hedge Fund Holders: 95
Costco Wholesale Corporation (NASDAQ:COST) operates an international chain of membership warehouses, mainly under the ‘Costco Wholesale’ name, that carry quality, brand-name merchandise at substantially lower prices than are typically found at conventional wholesale or retail sources.
Shares of Costco Wholesale Corporation (NASDAQ:COST) have surged by over 42% over the last year, thanks to its consistent earnings growth and rock-solid business model. The company’s Q1 2025 revenue rose 7.5% YoY to $62.15 billion, beating analysts’ estimates by over $155.8 million. Net income also came in at $4.04 per share in the reported quarter, beating expectations by $0.25. Moreover, the retailing giant opened seven new warehouses during the quarter, including one relocation and six net new buildings, of which four were outside of the US. The company is projecting 29 openings during the entire FY 2025, of which three will be relocations, and so 26 net new buildings.
One of Costco Wholesale Corporation (NASDAQ:COST)’s biggest success stories is its e-commerce business. The division – which tilts heavily toward discretionary purchases like home furnishings, gold bars, jewelry, and consumer electronics – soared by 21% in January 2025 compared to a 17% increase in the prior month.
Costco Wholesale Corporation (NASDAQ:COST) maintains a 20-year streak of consistent dividend growth, putting it among the 14 Best Large Cap Dividend Growth Stocks to Buy Now. The company declared a quarterly dividend of $1.16 per share last month.
11. Citigroup Inc. (NYSE:C)
Number of Hedge Fund Holders: 101
Citigroup Inc. (NYSE:C) is a diversified financial services holding company that provides a broad range of financial services to consumer and corporate customers. The company has a physical presence in 94 markets around the world and its clients include 85% of Fortune 500 companies.
Citigroup Inc. (NYSE:C) exceeded expectations in Q4 2024 with a net income of $2.9 billion, or $1.34 per share, fueled by strength in trading and dealmaking. The company’s overall net income for 2024 came in at $12.7 billion, up by a significant 40% YoY, while its annual revenue totaled $81.1 billion, reflecting a 3% YoY increase. Citi’s focus on cost controls and operational efficiencies is also paying off, with operating expenses declining by 18% YoY in Q4. The company also announced an innovative $25 billion private credit partnership with its long-term client Apollo. The program will initially focus on North America but it can expand to more geographies later.
Citigroup Inc. (NYSE:C) has paid uninterrupted dividends for 34 consecutive years and offers a quarterly dividend of $0.56 per share. The company’s board also approved a $20 billion stock buyback program last month, including share repurchases of up to $1.5 billion during the first quarter of 2025.
Citigroup Inc. (NYSE:C) is one of the Best Performing Bank Stocks So Far in 2025, with gains of over 16% since the beginning of the year.
10. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 104
Next on our list of the Best Large Cap Stocks According to Hedge Funds is Exxon Mobil Corporation (NYSE:XOM), one of the largest integrated fuels, lubricants, and chemical companies in the world. With operations in more than 60 countries around the globe, the oil major’s competitive edge stems from its diversified world-class asset portfolio.
Exxon Mobil Corporation (NYSE:XOM) is riding high after its US shale business is booming following the $59.5 billion acquisition of Pioneer Natural Resources last year. Its Guyana business is also paying off, helping it generate $34 billion in earnings and $55 billion in cash flow from operations in 2024 – its third-highest tally in the past decade despite weaker market conditions. Exxon’s strong financial position has allowed it to distribute more than $125 billion in dividends and buybacks in the last five years, $30 billion more than the closest competitor.
Exxon Mobil Corporation (NYSE:XOM) announced at the end of last year that its annual project spending will rise to between $28 billion and $33 billion between 2026 and 2030, with a goal of lifting its oil and gas output by 18%. As a result, the oil giant is expecting to deliver incremental growth potential of $20 billion in earnings and $30 billion in cash flow by the end of the decade, allowing it to keep its commitment to sustainable, competitive, and growing shareholder returns. XOM’s cost-reduction target was also increased to $18 billion by 2030, up from the earlier target of $15 billion by 2027.
Shares of Exxon Mobil Corporation (NYSE:XOM) were held by 104 hedge funds in the IM database at the end of Q4 2024, 18 more than the previous quarter. XOM has surged by over 89% over the last five years, against gains of approx. 83% by the broader market.
9. Bank of America Corporation (NYSE:BAC)
Number of Hedge Fund Holders: 113
Bank of America Corporation (NYSE:BAC) is one of the leading financial institutions in the world, serving individuals, small- and middle-market businesses, large corporations, and governments with a full range of banking, investment management and other financial and risk management products and services. The company has operations in more than 35 countries around the world and provides access to more than 140 currencies.
Bank of America Corporation (NYSE:BAC) beat expectations in Q4 2024 as it reported a revenue of $25.3 billion, up 15.2% YoY and above analysts’ estimates by $170 million. The second-largest US lender’s net income also rose to $6.7 billion, or 82 cents per share, compared to $3.1 billion, or 35 cents per share a year earlier, demonstrating significant financial growth and robust earnings despite a competitive environment. The bank also expanded its customer base, adding 213,000 new consumer checking accounts, marking six straight years of quarterly growth. Moreover, the company maintains a robust balance sheet and ended the year with $953 billion in liquidity and returned $2 billion to shareholders through dividend payments.
Bank of America Corporation (NYSE:BAC) has paid regular dividends to shareholders for 27 years in a row and with a current annual dividend yield of 2.3%, it is included among the 12 Best Fortune 500 Dividend Stocks To Buy Right Now.
8. Walmart Inc. (NYSE:WMT)
Number of Hedge Fund Holders: 115
Walmart Inc. (NYSE:WMT) engages in retail and wholesale business, offering an assortment of merchandise and services at everyday low prices. The company operates more than 10,750 stores and clubs in 19 countries and eCommerce websites. As of the end of FY2024, Walmart employed approximately 2.1 million associates worldwide, with approximately 1.6 million associates only in the US.
Walmart Inc. (NYSE:WMT) reported a revenue growth of 4.1% to $180.6 billion in Q4 2025, up 5.3% on a constant currency basis. The company’s operating income was also up 8.3% due to higher gross margins, growth in membership income, and improved economics in eCommerce. The retailer generated an overall operating cash flow of $36.4 billion for FY 2025 and ended the year with $9 billion in cash and cash equivalents. Walmart repurchased $4.5 billion worth of shares in FY 2025 and raised its quarterly dividend by 13% to $0.235 per share, the largest increase in over a decade.
Walmart Inc. (NYSE:WMT) also completed the acquisition of Vizio, a popular low-cost television manufacturer, in December 2024 for $2.3 billion. The strategic move will allow the retailing giant to expand its advertising business, which grew 27% to about $4.4 billion in FY 2025, including a 24% increase in Walmart Connect.
7. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 123
Next on our list of the Best Large Cap Stocks According to Hedge Funds is JPMorgan Chase & Co. (NYSE:JPM), a leader in investment banking, commercial banking, financial transaction processing, and asset management. With assets of $3.9 trillion and clients in over 100 countries worldwide, the company’s extensive reach and diversification have been a key factor in its ability to navigate challenging market conditions.
JPMorgan Chase & Co. (NYSE:JPM) delivered record earnings in 2024, reporting its biggest-ever annual profit of $58.5 billion, an 18% increase from the previous year. Net income in the fourth quarter surged 50% YoY thanks to a 7% decline in non-interest expense. The record growth in earnings last year is primarily attributed to the company’s dealmakers and traders reaping a windfall from rebounding markets in the fourth quarter. JPM is recognized as one of the 12 Best Financial Sector Dividend Stocks to Buy Right Now, having made consistent dividend payments to shareholders since 1972. The company maintained its reputation as an avid dividend payer and cumulatively paid a common dividend of $3.5 billion, or $1.25 per share, in Q4 2024.
Shares of JPMorgan Chase & Co. (NYSE:JPM) have surged by more than 44% over the last year, outperforming the broader market, thanks to its strong fundamental performance and durable competitive strengths.
6. Berkshire Hathaway Inc. (NYSE:BRK-B)
Number of Hedge Fund Holders: 131
Berkshire Hathaway Inc. (NYSE:BRK-B) is a holding company that owns subsidiaries engaged in a number of diverse business activities. The most important of these is the property and casualty insurance business conducted on both a direct and reinsurance basis through a number of subsidiaries.
Berkshire Hathaway Inc. (NYSE:BRK-B) had a strong Q4 2024 as its operating profit – which encompasses earnings from the company’s wholly owned businesses – skyrocketed 71% to over $14.52 billion, bolstered by improved underwriting and higher investment income in its insurance businesses. However, for the full year 2024, net income totaled $89 billion, down 7.5% from 2023. More notably though, the Warren Buffett-led conglomerate ended the year sitting on a record cash pile of $334.2 billion, twice as much as the year before. The massive cash inflow came from Berkshire’s sale of 62% of its holdings in Apple and one-third of its stake in Bank of America. In his annual letter to shareholders, the Oracle of Omaha assured investors that the company would prefer investing in businesses to holding cash. Berkshire repurchased $2.9 billion worth of shares in 2024 but hasn’t conducted any share buybacks since last May.
Warren Buffett highlighted that Berkshire Hathaway Inc. (NYSE:BRK-B) paid $26.8 billion in taxes to the US government in 2024, the largest sum the IRS has ever received from a single company and equal to 5% of all corporate tax revenue collected in the country.
5. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 150
UnitedHealth Group Incorporated (NYSE:UNH) is a health care and well-being company with team members in two distinct and complementary businesses – its insurance wing UnitedHealthcare and its health services segment Optum.
UnitedHealth Group Incorporated (NYSE:UNH) had a strong 2024 with a revenue of over $400 billion (up 8% YoY) and adjusted earnings per share of $27.66, well within the outlook ranges it set out over a year ago. Moreover, the company grew its domestic customer base served by the UnitedHealthcare business by 2.1 million, while its cohort of Optum patients increased by 600,000. UNH maintains a robust balance sheet and generated an operating cash flow of $24.2 billion last year, 1.6 times its net income. The company also remained committed to its shareholders and returned over $16 billion to shareholders through dividends and share repurchases in 2024.
UnitedHealth Group Incorporated (NYSE:UNH) has consistently paid dividends since 1990, switching from annual to quarterly dividends in 2010, and consistently increasing its dividend ever since. The healthcare company offers a quarterly dividend of $2.10 per share and is included among the 14 Best Large Cap Dividend Growth Stocks to Buy Now.
Barons Funds stated the following regarding UnitedHealth Group Incorporated (NYSE:UNH) in its Q4 2024 investor letter:
“Shares of UnitedHealth Group Incorporated (NYSE:UNH), the largest health care company by revenue, were volatile in the quarter. Quarterly medical cost trends ran higher than expected, the high end of quarterly guidance was cut, and the preliminary 2025 outlook missed consensus. The Republican November election sweep drove shares up, as Republicans have historically been more supportive of managed care, which bodes especially well for Medicare Advantage, the industry’s main growth engine. In December, UnitedHealth’s CEO was shot and killed, and the subsequent outpouring of public anger over the managed care industry’s history of claims denials sparked concern about the industry’s ability to control health care spend. The specter of pharmacy benefit manager (PBM) legislation was an additional pressure along with multiple press pieces questioning managed care practices and profit drivers. Longer term, we believe managed care will remain embedded in the U.S. health care system and UnitedHealth, as the largest, best managed, and most disciplined and forward-thinking company in the industry, will continue to grow.”
4. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 166
Apple Inc. (NASDAQ:AAPL) holds the honor of being the largest company in the world, with a market cap of around $3.69 trillion as of the writing of this article. The Silicon Valley-based tech giant is famous for creating the iPhone, iPad, and Macintosh computers.
Despite a mixed performance in certain segments, Apple Inc. (NASDAQ:AAPL) reported revenue of $124.3 billion for Q1 2025, up 4% YoY, and an all-time record. EPS also set an all-time record of $2.40, 10% higher YoY and surpassing market expectations. Services continue to be a major growth factor for Apple, achieving a record revenue of $26.34 billion in Q1 and illustrating the company’s focus on high-margin businesses such as digital streaming and cloud services. However, Apple’s iPhone revenue in the first quarter was $69.14 billion, slightly down from $69.7 billion a year ago, potentially due to market saturation and less demand in Greater China. The company remains financially robust and ended the quarter with $141 billion in cash and marketable securities.
Apple Inc (NASDAQ:AAPL) stands out for its capital-return program and since the start of 2013, the tech company has bought back almost 43% of its outstanding shares at a cost of close to $750 billion. Apple maintained this momentum and returned over $30 billion to shareholders in Q1 2025. This included $3.9 billion in dividends and equivalents and $23.3 billion through open market repurchases. The tech giant declared a cash dividend of $0.25 per share last month.
3. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 174
One of the largest technology conglomerates in the world, Alphabet Inc. (NASDAQ:GOOG) is the parent company of Google. Key acquisitions include YouTube, Fitbit, and Nest, expanding Alphabet’s reach across multiple industries.
Shares of Alphabet Inc. (NASDAQ:GOOG) have fallen by over 12% since February 4th, when it released its Q4 2024 earnings, as the tech giant missed on revenue expectations and investors came away disappointed with its cloud computing revenue growth rate. Though Alphabet’s total revenue for Q4 2024 surged by 12% YoY to $96.47 billion, it missed market expectations. Moreover, the company’s revenue growth, as well as the uptick in its search business, its YouTube ads business, and its services segment were all slower compared to the same period in 2023. The company’s Cloud business grew 30% YoY to $11.96 billion but was below market expectations and witnessed a slower growth rate than in Q3. However, Alphabet remains financially healthy and generated $24.8 billion in free cash flow in Q4 and $72.8 billion for the full year 2024. It ended the year with $95.7 billion in cash and equivalents and $10.9 billion in debt.
Alphabet Inc. (NASDAQ:GOOG) continues to focus on expanding its AI strategy as it faces stiff competition from players around the world. The company announced earlier this month that it will spend $75 billion on its AI buildout in 2025, 29% more than market expectations. The massive figure primarily reflects the company’s investment in its technical infrastructure, with the largest component being investments in servers, followed by data centers ‘to support the growth of our business across Google Services, Google Cloud and Google DeepMind’.
Merion Road Capital Management stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its Q4 2024 investor letter:
“Alphabet Inc. (NASDAQ:GOOG): We have held GOOG for a long time (since 2018) on the basis of its immense business quality paired with an undemanding valuation, improving treatment of minority shareholders, and multiple options for value creation. Recently we have seen Alphabet bashed for losing the AI race to now heralded for its progress. I remain excited about their prospects with several near-term, mid-term, and long-term tailwinds. Near-term, Google Cloud continues its rapid growth and their latest large language model, Gemini 2.0, appears to have made significant progress to better serve consumer needs and improve GOOG’s other product offerings. Mid-term, Waymo is on the cusp of becoming a real value driver for the company; there are abundant articles discussing Waymo stealing share from the ride-share economy and launching in new geographies. Long-term, GOOG’s recently announced quantum computing chip positions it well for a future (many, many years away) where computing process are fundamentally different than today. All of these options are embedded in a company that already has an established and dominant earnings stream.”
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 317
Microsoft Corporation (NASDAQ:MSFT) is engaged in developing and marketing software, services, and hardware that deliver new opportunities, greater convenience, and enhanced value to people’s lives. The company does business worldwide and has offices in more than 100 countries.
Microsoft Corporation (NASDAQ:MSFT) had an impressive Q2 2025, reporting EPS of $3.23 and beating market expectations of $3.11. Revenue for the quarter came in at $69.6 billion, up 12.3% YoY and above market estimates. This strong performance was driven by a 21% increase in cloud revenue, although challenges remain in Azure’s growth. The tech giant’s Q2 Cloud revenue grew 21% YoY to $40.9 billion, surpassing $40 billion for the first time. Microsoft’s AI business has also now surpassed an annual revenue run rate of $13 billion, up 175% YoY. The company also returned $9.7 billion to shareholders in the form of dividends and share repurchases in Q2 of 2025.
Microsoft Corporation (NASDAQ:MSFT) unveiled a significant breakthrough in the field of quantum computing this month with Majorana 1. It is the world’s first quantum chip powered by a new Topological Core architecture that Microsoft expects will realize quantum computers capable of solving meaningful, industrial-scale problems in years, not decades.
Bretton Capital Management stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q4 2024 investor letter:
“Microsoft Corporation (NASDAQ:MSFT) has become the go-to provider of computing services for many emerging AI companies, and its franchise is much more diversified than Alphabet’s, making it a net beneficiary of the AI arms race. Demand for its cloud computing services continued to grow, and the rest of its business (Orce, Windows, Xbox, GitHub, LinkedIn) are also thriving, sending earnings per share up 22% while the stock returned 13%.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 338
Topping our list of the Best Large Cap Stocks to Buy Now is Amazon.com, Inc. (NASDAQ:AMZN), an American multinational technology company that engages in e-commerce, cloud computing, online advertising, digital streaming, and artificial intelligence.
Amazon.com, Inc. (NASDAQ:AMZN) made headlines this month when it reported a massive revenue of $187.8 billion in Q4 2024, up 10% YoY. The company managed to pass Walmart in quarterly revenue for the first time ever, unseating the retailing giant from the top spot it has held for over a decade. Amazon’s core retail unit remains its biggest revenue generator, with the company reporting online sales growth of 7% YoY in Q4 to $75.56 billion. However, the company’s cloud unit reported a 19% rise in revenue to $28.79 billion, falling short of estimates of $28.87 billion. Though Amazon’s cloud services segment continues to be the fastest-growing and most profitable part of the business, investors have grown increasingly impatient with its multibillion-dollar capital spending and are hungry for higher returns from hefty investments in AI. For the full year 2024, Amazon’s revenue grew 11% to $638 billion, while operating income soared 86%, reaching $68.6 billion.
Amazon.com, Inc. (NASDAQ:AMZN) is expected to exceed $100 billion in capex for 2025, mainly directed toward AWS, its cloud unit. With a return on invested capital (ROIC) of 17% in 2024, up from 10.6% in 2023, the returns on these investments are expected to drive continued value creation.
Overall, Amazon.com, Inc. (NASDAQ:AMZN) ranks first on our list of the best Fortune 500 stocks to buy according to hedge funds. While we acknowledge the potential for AMZN to grow, our conviction lies in the belief that some 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.
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