In this article, we discuss the 12 best long term low risk stocks to buy right now.
As the DeepSeek craze ignites a sell-off in the tech sector, investors are weighing the implications of the downturn in the long term. This is because the technology sector, particularly the Magnificent Seven group of stocks, has been a significant driver of market gains in the past few years. However, Bank of America strategists caution that these tech giants may face challenges ahead, dubbing them the “Lagnificent 7” due to potential underperformance. Factors such as diminishing US exceptionalism, vast fiscal spending, high immigration, and the AI investment bubble are cited as contributing to this anticipated slowdown. The bank has advised investors to explore undervalued opportunities in sectors like Japanese and European banks, commodities, high-yield bonds, international stocks, and cyclical sectors, given expected rebounds in global manufacturing activity.
Read more about these developments by accessing 10 Best AI Data Center Stocks and 10 Buzzing AI Stocks According to Goldman Sachs.
There are also several long term and low risk equities trading on the US stock market that could provide investors with the hedge they need against volatile tech stocks. According to a report by news agency Reuters, looking ahead, investors are cautiously optimistic about 2025, anticipating gains fueled by a solid economy, moderating interest rates, and pro-growth policies from the incoming administration. The S&P 500 has experienced significant growth over the past two years, and corporate profits are projected to rise by over 10% in 2025. However, risks such as persistent inflation, potential policy shifts, and elevated stock valuations warrant careful consideration. Strategies may include diversifying portfolios, focusing on undervalued sectors, and closely monitoring economic indicators to navigate the evolving landscape.
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.
For this article, we selected stocks that have solid businesses with recurring revenue streams, reliable dividend payouts, and burgeoning growth pipelines. These stocks are also popular among 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 Long Term Low Risk Stocks to Buy Right Now
12. Bristol-Myers Squibb Company (NYSE:BMY)
Number of Hedge Fund Holders: 70
Bristol-Myers Squibb Company (NYSE:BMY) is a New York-based pharmaceutical company. BMS relies on strong earnings to fund its research and development (R&D) pipeline, particularly in oncology, immunology, and cardiovascular therapies. The success of blockbuster drugs like Opdivo, Eliquis, and Revlimid directly impacts earnings, influencing reinvestment into next-generation treatments. Earnings reports often highlight clinical trial progress and regulatory approvals, which signal future revenue streams. In Q3 2024, the company achieved total revenues of $11.9 billion, marking an 8% increase from the same period in 2023. On a GAAP basis, EPS was $0.60, down from $0.93 in the prior year. Non-GAAP EPS stood at $1.80, a decrease from $2.00 in the same quarter of 2023.
11. Comcast Corporation (NASDAQ:CMCSA)
Number of Hedge Fund Holders: 72
Comcast Corporation (NASDAQ:CMCSA) operates as a media and technology company worldwide. In the fourth quarter of 2024, Comcast reported revenues of $31.9 billion, a 2% increase from the same period last year. Adjusted earnings per share (EPS) rose by 11% to $0.96. The studio division contributed to a 7% revenue increase to $3.27 billion and an 85% surge in adjusted earnings to $569 million. In response to broadband subscriber losses, Comcast is focusing on its mobile business, aiming to bundle mobile and broadband services to attract and retain customers. Comcast has also announced plans to spin off its media and entertainment assets into a separate company, allowing the remaining entity to concentrate on core growth areas such as residential broadband, wireless, business services, and streaming.
10. Costco Wholesale Corporation (NASDAQ:COST)
Number of Hedge Fund Holders: 75
Costco Wholesale Corporation (NASDAQ:COST) engages in the operation of membership warehouses. The company has a long-term growth plan with a focus on membership expansion, international development, and technological advancements. In the first quarter of 2025, Costco reported net sales of $60.99 billion, a 7.5% increase from $56.72 billion in the same period last year. Net income for the quarter was $1.798 billion, or $4.04 per diluted share, up from $1.589 billion, or $3.58 per diluted share, in the previous year. In September 2024, Costco implemented its first membership fee hike in seven years. The company has not observed significant changes in renewal trends, with potential financial impacts expected in late fiscal 2025 and 2026.
9. The Home Depot, Inc. (NYSE:HD)
Number of Hedge Fund Holders: 82
Home Depot, Inc. (NYSE:HD) operates as a home improvement retailer. The recent financial performance and strategic initiatives of the firm underscore its commitment to long-term growth, particularly through enhancing customer experience and expanding its professional segment. In the third quarter of 2024, the company reported sales of $40.2 billion, a 6.6% increase from the same period in the previous year. However, comparable sales decreased by 1.3%, with US comparable sales down by 1.2%. In the second quarter, sales had reached $43.2 billion, a 0.6% increase from the prior year, indicating modest growth. Home Depot aims for sales growth between 3% and 4% per year, maintaining a flat gross margin rate, and achieving operating margin expansion through sales leverage and productivity.
8. Pfizer Inc. (NYSE:PFE)
Number of Hedge Fund Holders: 80
Pfizer Inc. (NYSE:PFE) discovers, develops, manufactures, markets, distributes, and sells biopharmaceutical products worldwide. For the third quarter of 2024, the company reported earnings per share (EPS) of $1.06, surpassing analysts’ expectations of $0.64. Revenue for the quarter was $17.70 billion, a 31.2% increase year-over-year, exceeding the anticipated $14.92 billion. In the 2025 fiscal year, the company projects revenues between $61 and $64 billion, with operational revenue growth ranging from flat to 5% compared to 2024. This outlook includes expectations for COVID-19 product revenues to remain consistent with 2024, excluding a one-time $1.2 billion Paxlovid revenue. Investors should keep an eye on Pfizer’s $43 billion acquisition of Seagen which aims to enhance its cancer drug portfolio, focusing on antibody-drug conjugates (ADCs). The company anticipates that ADCs could contribute up to $10 billion in annual sales by 2030.
7. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 81
Johnson & Johnson (NYSE:JNJ) researches and develops, manufactures, and sells various products in the healthcare field. In Q4 2024, the company reported sales of $22.5 billion, marking a 5.3% increase from the previous year. Operational growth was 6.7%, with adjusted operational growth at 5.7%. For the full year 2024, the firm achieved total sales of $90.8 billion, representing a 6.6% increase compared to 2023. Operational growth for the year was 7.2%, with adjusted operational growth at 6%. The company has recently announced plans to acquire Intra-Cellular Therapies, a developer of mental health treatments, for approximately $15 billion. This acquisition aims to bolster Johnson & Johnson’s pharmaceutical portfolio, particularly in the neuroscience sector.
6. Vistra Corp. (NYSE:VST)
Number of Hedge Fund Holders: 97
Vistra Corp. (NYSE:VST) operates as an integrated retail electricity and power generation company. In the third quarter of 2024, Vistra reported revenues of $6.29 billion, a 54% increase from the previous year, surpassing analyst expectations of $5.01 billion. Earnings per share were $1.24, exceeding the projected $1.16. As of November 2024, Vistra had executed approximately $4.58 billion in share repurchases since November 2021, reducing outstanding shares by about 30%. The Board authorized an additional $1 billion for repurchases, with $2.2 billion remaining, expected to be completed by year-end 2026. The company has plans to add up to 2,000 MW of gas-fueled dispatchable power in Texas, including 860 MW of advanced simple-cycle peaker plants in West Texas, supporting the growing energy demands of the area.
5. Danaher Corporation (NYSE:DHR)
Number of Hedge Fund Holders: 98
Danaher Corporation (NYSE:DHR) is a Washington-based conglomerate with interests in professional, medical, industrial, and commercial products and services. The stock has declined in recent days after the firm posted fourth-quarter earnings, reporting earnings per share of $2.14 on sales of $6.5 billion, slightly below Wall Street’s expectations of $2.16 per share, but sales exceeding the forecast of $6.4 billion. In Q3 2024, the firm achieved revenues of $5.8 billion, a 3% year-over-year increase, with non-GAAP core revenue growth of 0.5%. Danaher’s emphasis on high-margin bioprocessing within its life sciences sector is central to its growth strategy. The anticipated recovery in bioprocessing is expected to significantly boost earnings per share in the coming years.
4. Eli Lilly and Company (NYSE:LLY)
Number of Hedge Fund Holders: 106
Eli Lilly and Company (NYSE:LLY) develops and markets human pharmaceuticals. In Q3 2024, the company reported a 20% increase in worldwide revenue, reaching $11.44 billion, compared to Q3 2023. This growth was driven by a 15% rise in volume and a 6% increase in realized prices. Key contributors included Mounjaro and Zepbound. In December 2024, the firm announced a $3 billion investment to expand its recently acquired facility in Wisconsin. This expansion aims to enhance production capacity for injectable medications like Mounjaro and Zepbound, which collectively generated $4.4 billion in sales in Q3 2024. The company is focusing on advancing its pipeline, particularly in the obesity drug market, which analysts predict could be worth $200 billion by 2031.
3. Berkshire Hathaway Inc. (NYSE:BRK-B)
Number of Hedge Fund Holders: 120
Berkshire Hathaway Inc. (NYSE:BRK-B) is an Omaha-based conglomerate with interests in transport, insurance, and other businesses. The firm has a long-term growth plan that relies on diversified investments and prudent capital management. The company reported earnings of $26.3 billion in Q3 2024, a significant turnaround from a loss of $12.8 billion in the same quarter of 2023. Berkshire has accumulated a record $325.2 billion in liquidity, primarily in short-term Treasury securities, indicating a cautious approach amid limited attractive investment opportunities. Last year, the company raised $1.9 billion through a yen-denominated bond sale, signaling increased investment in Japanese assets. It has also significantly increased its stake in the energy sector through investments in an oil giant.
2. Mastercard Incorporated (NYSE:MA)
Number of Hedge Fund Holders: 131
Mastercard Incorporated (NYSE:MA) is a technology company that provides transaction processing and other payment-related products and services. The recent financial performance of the firm underscores its alignment with long-term growth strategies, emphasizing robust consumer spending, strategic acquisitions, and innovation in payment technologies. In Q4 2024, Mastercard reported a 20% increase in earnings per share to $3.82 and a 14% rise in revenue to $7.49 billion, surpassing market expectations. Mastercard forecasts low double-digit revenue growth for Q1 and the full year of 2025. The company is also developing tokenization and biometric authentication methods to improve transaction security and user experience, aiming to phase out traditional credit cards by 2030.
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 286
Amazon.com, Inc. (NASDAQ:AMZN) operates as a technology conglomerate with core interests in the ecommerce business. The firm has consistently demonstrated strong revenue growth, driven by its e-commerce dominance and cloud computing business. Over the past decade, the firm has been one of the few in the technology sector with a consistent double-digit revenue growth rate. AWS, the cloud business of the firm, contributes significantly to Amazon’s operating income, with high margins compared to the lower-margin retail segment. Amazon also continues to expand in international markets while refining logistics and fulfillment to improve efficiency. Meanwhile, investments in AI, automation, and robotics enhance productivity and create new revenue streams.
While we acknowledge the potential of Amazon.com, Inc. (NASDAQ:AMZN) as an investment, our conviction lies in the belief that some stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a stock that is more promising than Amazon.com, Inc. (NASDAQ:AMZN) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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