In this article, we will look at the 12 Best Stocks to Buy in 2025 for Beginners.
Stock Market Outlook for 2025
On December 12, Tom Lee, Fundstrat Global Advisors managing partner and head of research, appeared on CNBC to talk about his 2025 playbook. After two years of significant market gains, Lee’s playbook painted an optimistic yet cautious outlook for the stock market in 2025. He anticipated that the S&P 500 would rise to approximately 7,000 by mid-2025 before retreating to around 6,600 by the end of the year. This highlights an overall expected increase of about 8% for the year, consistent with historical averages for stock market returns.
Furthermore, Lee estimated the Earnings Per Share (EPS) for the S&P 500 to be around $260 in 2025, going up to $300 in 2026. These numbers are slightly below the Wall Street consensus estimates, which show an average of around $268 for 2025. Talking about his investment thesis, Lee believed several themes could bring a positive trajectory in the market in 2025. In his own Dickensian version, he predicted a “tale of two halves,” where the first half of 2025 is expected to see strong market performance, with a potential pullback in the second half. The positive first-half performance is attributed to factors such as market-friendly initiatives under President Trump’s administration and Federal Reserve policies. The pullback in the second half of 2025 reflects historical trends after strong consecutive years.
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Mega Cap Companies: Is There Potential?
Lee was of the opinion that the small-cap sector may have potential even though it has historically underperformed relative to large-cap stocks. He also talked about mega-cap companies and how they’re leading, mentioning that investors typically reach for these companies when there is even a possibility of risk in the market. In addition, mega-cap stocks are highly sensitive to falling interest rates. Since the tech market is bullish after the December rate cut is in effect, the investment case for megacaps is further strengthening.
However, despite an overall positive outlook, Lee acknowledged that several risks may impact market performance. For instance, he was of the view that the newly formed Department of Government Efficiency (DOGE) could potentially lead to reduced government spending and slower economic growth if it is too effective in cutting costs. Furthermore, the implementation of tariffs poses another concern, as tariffs can adversely affect corporate profits and financial conditions. Lee’s pointing out of historical patterns showed that after two years of considerable gains, markets are prone to decline in the latter half of the third year.
With these trends in view, let’s look at the 12 best stocks to buy in 2025 for beginners.
An overhead view of a bustling stock exchange, with brokers and traders exchanging stocks.
Our Methodology
We sifted through stock screeners, online rankings, and ETFs to compile a list of 40 blue chip companies with a 10-year revenue compound annual growth rate (CAGR) between 7%-15%. We then selected the top 12 stocks most popular among elite hedge funds. We sourced hedge fund data from Insider Monkey’s database. The stocks are sorted in ascending order of the number of hedge fund holders that have stakes in them, as of Q3 2024.
Why do we care about what hedge funds do? 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).
12 Best Stocks to Buy in 2025 for Beginners
12. AbbVie Inc. (NYSE:ABBV)
10-year Revenue CAGR: 10.97%
Number of Hedge Fund Holders: 68
AbbVie Inc. (NYSE:ABBV) is a research-based pharmaceutical company that develops and sells products to treat chronic diseases in gastroenterology, rheumatology, oncology, dermatology, virology, and various other serious health conditions.
The company generated $14.46 billion in total worldwide revenue in fiscal Q3 2024, reflecting a 3.8% year-over-year increase. This revenue growth was attributed to its immunology segment, which alone accounted for $7.05 billion in revenue and reflected a 4% growth during the same time. AbbVie Inc. (NYSE:ABBV) also acquired Cerevel, a neuroscience company, to further bolster its neuroscience pipeline, which delivered $2.36 billion in revenue in fiscal Q3 2024 and grew by 15.6% year-over-year. The acquisition strengthened the company’s pipeline with promising treatments, including emraclidine, which is a potential therapy for schizophrenia.
Analysts are optimistic about AbbVie Inc.’s (NYSE:ABBV) future growth, primarily because of its two blockbuster drugs: Skyrizi and Rinvoq. These generated over $4.8 billion in revenue during fiscal Q3 2024 and are projected to exceed $27 billion in annual sales by 2027, targeting conditions such as dermatology, rheumatology, psoriatic diseases, and inflammatory bowel disorders. The company also announced a dividend increase of 5.8%, effective February 2025, continuing its trend of increasing dividends for 12 consecutive years. AbbVie Inc. (NYSE:ABBV) ranks 12th on our list of the 12 best stocks to buy in 2025 for beginners.
Polaris Capital Management said the following about AbbVie Inc. (NYSE:ABBV) in its Q3 2024 investor letter:
“US biopharma/biotech companies topped the health care sector, with the majority of holdings posting returns in excess of 10%. AbbVie Inc. (NYSE:ABBV) showed positive top-line growth from its immunosuppressive drugs, Skyrizi and Rinvoq. Abbvie’s management continues to work through the loss of exclusivity from Humira, switching patients to Skyrizi or Rinvoq rather than Humira biosimilars.”
11. Applied Materials, Inc. (NASDAQ:AMAT)
10-year Revenue CAGR: 11.60%
Number of Hedge Fund Holders: 74
Applied Materials, Inc. (NASDAQ:AMAT) provides manufacturing equipment, software, and services to semiconductors and related industries. It operates through the Semiconductor Systems, Applied Global Services, and Display & Adjacent Markets segments. Applied Materials, Inc. (NASDAQ:AMAT) is the largest semiconductor equipment company in terms of revenue and is the most diversified in market reach. Its stock has grown over 600% in the past ten years, generating a total return of more than 700%. For reference, the S&P 500 generated a total return of 260% in the same time frame.
The company has experienced cyclical growth and is a significant force in the expanding semiconductor segment. Its revenue grew at a compound annual growth rate (CAGR) of 12% between fiscal 2014 and 2024, and its earnings per share (EPS) grew at a CAGR of 26%. While the company has experienced decelerating growth in the past few years due to a challenging macroenvironment and tightening performance in China due to export curbs, it expects to bounce back and accelerate in the coming few years. This optimism is linked to the market’s growing demand for more powerful AI, denser memory, and energy-efficiency chips.
Applied Materials, Inc. (NASDAQ:AMAT) also has plans to improve its ecosystem through its new integrated solutions that amalgamate steps like etching, material modification, and material deposition into a single, integrated system. It also expects to deal with the challenging environment in China by gradually reducing its exposure to that volatile market. Analysts expect Applied Materials, Inc.’s (NASDAQ:AMAT) revenue to increase by 9% in fiscal 2025, and another 8% in fiscal 2026.
10. Costco Wholesale Corporation (NASDAQ:COST)
10-year Revenue CAGR: 8.50%
Number of Hedge Fund Holders: 75
Costco Wholesale Corporation (NASDAQ:COST) operates membership-only big box warehouse club stores and is one of the most popular department stores in the US. It offers an extensive collection to its customers, including furniture, electronics, clothing, consumables, and much more. Costco Wholesale Corporation (NASDAQ:COST) generated revenue of $62 billion in fiscal Q1 2025, marking a 7.5% increase compared to the same quarter last year. It also ended the quarter with 77.4 million paid household members, reflecting a 7.6% growth compared to last year and highlighting its continued popularity.
To continue this demand, the company is expanding its operations, opening new stores and consolidating its presence in 47 US states. It attained its target of opening 30 new warehouses in fiscal 2024. It is also expanding its presence internationally and has plans to take on 12 of its 29 planned openings outside the US.
Costco Wholesale Corporation’s (NASDAQ:COST) retail approach lends it a competitive market position. The company is attracting a growing number of loyal shoppers worldwide by offering membership-based pricing and discounts on bulk items. In addition, its stock has surged by nearly 36% in the past 12 months. The company takes the tenth spot on our list of the 12 best stocks to buy in 2025 for beginners.
Madison Investments made the following comment about Costco Wholesale Corporation (NASDAQ:COST) in its Q3 2024 investor letter:
“Costco Wholesale Corporation (NASDAQ:COST) continues to demonstrate its commitment to sustainability by lowering its emissions. For example, it has converted its Kirkland Signature laundry packs from plastic tubs to a pouch. This has reduced plastic packaging by 80%. It has also moved to localize production of bulky items such as water, paper, and laundry detergents. Manufacturing these goods closer to the countries in which they are sold reduces emissions associated with shipping.”
9. Sherwin-Williams Company (NYSE:SHW)
10-year Revenue CAGR: 7.66%
Number of Hedge Fund Holders: 78
Sherwin-Williams Company (NYSE:SHW) develops, manufactures, and sells paint and coatings. Its America Group segment operates exclusive outlets for Sherwin-Williams branded stains, paints, equipment, supplies, and floor coverings. Its Performance Coating Group segment sells products in the protective and marine, industrial wood, packaging, coil, and automotive markets.
The company reported a revenue of $6.16 billion in fiscal Q3 2024. Its Paint Stores Group underwent growth, supported by a high single-digit rise in protective and marine product sales. Despite the tough market conditions, The Sherwin-Williams Company’s (NYSE:SHW) investments in residential repainting helped maintain mid-single digital growth. It is expected to further improve its position, as lower interest rates are anticipated to cause a resurgence in home renovations, translating to increased sales of the company’s products.
The Sherwin-Williams Company (NYSE:SHW) has a strong cash position and is a consistent dividend grower. It generated an operating cash flow of $2.22 billion in the first nine months of fiscal 2024 and returned $1.97 billion to shareholders through dividends.
Parnassus Investments said the following about The Sherwin-Williams Company’s (NYSE:SHW) potential growth in its Q3 2024 investor letter:
“The Sherwin-Williams Company (NYSE:SHW) gained on optimism that lower interest rates would spur a resurgence in home renovations, leading to higher sales of its paint products. The company also hosted an investor day where it gave medium-term financial targets that were well received by investors.”
8. Intuitive Surgical, Inc. (NASDAQ:ISRG)
10-year Revenue CAGR: 14.22%
Number of Hedge Fund Holders: 82
Intuitive Surgical, Inc. (NASDAQ:ISRG) has an elaborate ecosystem of services and products that provides robotic-assisted surgical solutions and invasive care. Its products include the Ion Endoluminal and the Da Vinci Surgical systems. The company’s stock is surging, having grown around 60% over the past 12 months.
Its Q4 2024 results showed considerable growth, with Da Vinci procedures increasing by 18%. Intuitive Surgical, Inc. sold 493 surgical systems, reflecting an increase from 415 in the quarter a year ago. Its overall revenue also increased by 25% to $2.41 billion, beating consensus of $2.24 billion.
Intuitive Surgical, Inc. (NASDAQ:ISRG) holds a significant position in the surgical robotics market. According to Grand View Research, the surgical robotics market is expected to grow at a compound annual growth rate of 9.5% until 2030. The global market is anticipated to be worth around $7.4 billion by then, up from $4.3 billion last year. Although this market is not expansive, it holds potential for growth in the coming years and decades, supported by the rapid advancement of healthcare technologies. Intuitive Surgical, Inc. (NASDAQ:ISRG) ranks eighth on our list.
7. Thermo Fisher Scientific Inc. (NYSE:TMO)
10-year Revenue CAGR: 10.32%
Number of Hedge Fund Holders: 98
Thermo Fisher Scientific Inc. (NYSE:TMO) provides analytical instruments, reagents, equipment, software, and other services for analysis, research, diagnostics, and discovery. It operates through the Analytical Instruments, Life Sciences Solutions, Laboratory Products and Services, and Specialty Diagnostics segments.
The company’s recent quarters showed steady results. It reported around $10.6 billion in revenue in fiscal Q3 2024 and projects its annual revenue to come up to between $42.2 billion and $43.3 billion. Thermo Fisher Scientific Inc. (NYSE:TMO) holds a competitive market position due to its leadership in life sciences, long-term customer relationships, and high switching expenses. Its consumables and equipment are especially useful in drug development.
Thermo Fisher Scientific Inc. (NYSE:TMO) expects to continue its consistent growth, and management forecasts high-single-digit revenue growth in the coming years. The company’s strong cash position further bolsters its standing, as it generated over $2.1 billion in operating cash flow and $1.9 billion in free cash flow in fiscal Q3 2024. It ranks seventh on our list of the best stocks for beginners in 2025.
6. Eli Lilly & Co. (NYSE:LLY)
10-year Revenue CAGR: 7.25%
Number of Hedge Fund Holders: 106
Eli Lilly & Co. (NYSE:LLY) develops, manufactures, discovers, and sells pharmaceutical products. These products span oncology, diabetes, immunology, neuroscience, and other therapies. The company is one of the best stocks to buy in the pharmaceutical industry, and management expects a 32% revenue growth in fiscal 2025.
It has a solid oncology segment, weight loss therapies, and medications approved for eczema and Alzheimer’s disease that are anticipated to improve the company’s fundamentals. In fiscal Q3 2024, the company grew its sales by 20% to $11.4 billion. Several of its products generated more than $1 billion in revenue, including Zepbound ($1.3 billion) and Mounjaro ($3.1 billion), its top GLP-1 drugs. Strong US demand for these two drugs caused a 42% surge in the company’s revenue in fiscal Q3 2024. Zepbound was approved as a treatment for moderate to severe sleep apnea last year, which is a significant milestone for the company and is expected to be a catalyst for more revenue growth for Eli Lilly & Co. (NYSE:LLY) in the near future.
Investors are thus bullish on Eli Lilly & Co. (NYSE:LLY) due to its in-demand GLP-1 drugs, which are still in their early growth stages, and the company’s strong financials. It ranks sixth on our list of the 12 best stocks to buy in 2025 for beginners.
5. UnitedHealth Group Incorporated (NYSE:UNH)
10-year Revenue CAGR: 11.86%
Number of Hedge Fund Holders: 112
UnitedHealth Group Incorporated (NYSE:UNH) provides healthcare coverage, data consultancy, and software services. It operates through the OptumRx, OptumInsight, OptumHealth, and UnitedHealthCare segments, which have solid operations. UnitedHealthCare, its insurance division, added millions of customers during fiscal 2024 and is continuing to expand its operations. Its OptumHealth division grew revenues to around $105 billion in fiscal 2024 and is expected to touch $117 billion in fiscal 2025.
The company’s value proposition is resonating with consumers and provider partners, state customers, and undertaking expansion proposals. It is focusing on providing consumer stability and sustainable value, and anticipates growth of up to 800,000 people in individual, group and special needs offerings.
UnitedHealth Group Incorporated (NYSE:UNH) employed around $17 billion in growth capital in fiscal 2024 to strengthen its capabilities, and returned over $16 billion to shareholders through share repurchases and dividends. It expects cash flow from operations to reach $33 billion in fiscal 2025, or 1.2 times net income.
Vulcan Value Partners stated the following regarding UnitedHealth Group Incorporated (NYSE:UNH) in its Q4 2024 investor letter:
“UnitedHealth Group Incorporated (NYSE:UNH), a company that we have owned several times in the past, is the largest health insurer in the United States. UnitedHealth Group also owns Optum, which is a rapidly growing healthcare services company. The environment for the health insurance business remains positive as growth in healthcare spending, driven by chronic diseases and an aging population, will continue to outpace overall economic growth. The insurance business benefits from powerful network effects as more members attract more providers and vice versa, which reinforces United’s value proposition and bargaining power with each side of the network. We respect UnitedHealth Group’s management team and have been very pleased with their long-term vision and execution.”
4. Mastercard Incorporated (NYSE:MA)
10-year Revenue CAGR: 11.51%
Number of Hedge Fund Holders: 131
Mastercard Incorporated (NYSE:MA) is a technology company that provides payment solutions for developing and implementing debit, credit, prepaid, commercial, and payment programs via its brands. Its portfolio includes Mastercard, Cirrus, and Maestro. The company also offers intelligence and cyber solutions.
In fiscal Q3 2024, it grew net revenue by 14% and adjusted net income by 13% compared to a year ago. This growth was attributed to healthy consumer spending, including strong cross-border volume growth of 15% year over year (on a local currency basis). Mastercard Incorporated (NYSE:MA) is benefiting from a supportive macroeconomic environment, supported by strength in consumer spending.
The company is focusing on executing its growth algorithm and is optimistic about its growth outlook. It plans to tap into the sizeable secular shift to electronic payments, penetrate the addressable market in new payment and commercial flows, and gain market share by growing its value-added services and solutions. Mastercard Incorporated (NYSE:MA) takes the fourth spot on our list of the 12 best stocks for beginners in 2025.
Montaka Global Investments stated the following regarding Mastercard Incorporated (NYSE:MA) in its Q3 2024 investor letter:
“Montaka owns several duopolists in the financial services industry, including Visa and Mastercard Incorporated (NYSE:MA) in payments; and S&P Global in credit ratings and financial data services. These businesses have competitively protected and reliably growing core businesses. But they also have newer, high-probability adjacent opportunities. The market, however, is underappreciating this powerful combination, in our view.
For Visa and Mastercard, their core businesses in global payment processing are being complemented by significant growth in two areas:
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New processing opportunities in peer-to-peer, business-to-business, business-to-consumer, and government-to-consumer payments; and
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Value-added services, including risk, fraud-detection, issuance, acceptance, and open banking.”
3. Apple, Inc. (NASDAQ:AAPL)
10-year Revenue CAGR: 7.90%
Number of Hedge Fund Holders: 158
Apple, Inc. (NASDAQ:AAPL) designs, manufactures, and sells smartphones, personal computers, wearables, accessories, and other related products and services. Its operations span across the globe. The company’s stock has gained considerable value over the past few years, with its stock price up 262% over the last five years.
The company is experiencing some turbulence, especially due to its position in China. According to Reuters, Apple, Inc.’s (NASDAQ:AAPL) annual shipments declined by 17% in China in fiscal year 2024, with a 25% decline in fiscal Q4 2024 alone. The company now has a 15% market share in China. Despite this setback, Apple, Inc. (NASDAQ:AAPL) is growing its earnings, primarily due to strength in its services segment. It posted a revenue of $94.9 billion in fiscal Q4 2024, reflecting a 6% increase compared to last year’s quarter. Analysts expect 2025 to be a robust year for the company, with a 6% forecasted growth rate.
Furthermore, with more than 2.2 billion Apple devices worldwide, Apple, Inc., (NASDAQ:AAPL) has an expansive platform for AI services. It is set to reveal several of its new Apple Intelligence features in fiscal 2025 and may explore AI-driven subscription services, which could translate to further revenue potential for the company.
CDT Capital Management stated the following regarding Apple Inc. (NASDAQ:AAPL) in its Q4 2024 investor letter:
“The crowd. While this evolution in AI is going to change the world, market expectations for the technology have become unhinged. The crowd, which is more like an exuberant mob, anointed the Mag 7 with spectacular, nonsensical valuations based on the premise that AI will be an amazing, money-printing growth engine for these companies – and the truth is it likely will be. The problem is that the math just isn’t mathing.
Let me explain what I mean by picking on the world’s most valuable stock, Apple Inc. (NASDAQ:AAPL). For background, Apple does not have a robust homegrown AI platform, nor does it have a plan to meaningfully monetize AI from Apple users. Right now, from our perspective, Apple’s, Apple Intelligence strategy of implementing third-party AI tools to stay competitive will likely be more of a cost of doing business than an avenue for sales and yet in 2024, the stock soared +33% based on the AI dream as exemplified by the quote below.
“A golden era of growth for Cupertino is now on the horizon into 2025.”..” (Click here to read the full text)
2. Visa Inc. (NYSE:V)
10-year Revenue CAGR: 10.96%
Number of Hedge Fund Holders: 165
Visa Inc. (NYSE:V) provides digital payment services. It offers credit cards, debit cards, prepaid products, global automated teller machines, and commercial payment solutions. The company’s stock has surged around 380% in the past decade. In addition, its revenue grew at a compound annual growth rate (CAGR) of 11% between fiscal 2024 and fiscal 2024. Visa Inc. (NYSE:V) has a solid market presence due to its consistent growth, resilience during economic turbulence and geopolitical conflicts, and wide moat.
Analysts are thus bullish on the stock and expect its revenue to grow at a CAGR of 10% between fiscal 2024 and fiscal 2027. Its EPS is anticipated to surge by 13% in the same time frame. The company is also expected to benefit from the secular trend of preferring e-payments over cash.
According to Allied Market Research, the global credit card payment market is expected to grow at a CAGR of 8.8%. Therefore, analysts expect Visa Inc. (NYSE:V) to continue its growth trajectory and expand its market share in the coming years, as it has already bought back around a fifth of its shares over the last ten years. It ranks second on our list of the best stocks for beginners in 2025.
Mar Vista Global Strategy stated the following regarding Visa Inc. (NYSE:V) in its Q3 2024 investor letter:
“After lagging the broader markets over the last one, three, and five years, we believe Visa Inc.’s (NYSE:V) stock now reflects a more conservative and realistic expectation for future cash flow growth. The electronic transaction toll-taker has long enjoyed a highly defensible network effect that connects global buyers and sellers and scale advantages that keep upstart competitors from disrupting the industry’s economics. At the same time, Visa directly benefits from the secular trend of replacing cash with e-payments. Penetration rates and transaction volumes in developed markets will inevitably slow over the next five years, yet we expect Visa revenues to grow 8-10% over our investment horizon. Key value drivers remain global consumer spending growth, e-transaction penetration, “new flows” expansion in areas like business-to-business transactions, and lastly, value-added client service growth.
Visa’s dominant position is reflected in its nearly pristine financials: 68% operating margins, greater than 70% incremental operating margins and only 3-4% capital expenditures as a percent of sales. Awash in excess capital, Visa is one of the more aggressive purchasers of its own stock. Shares outstanding over the last fifteen years have declined by one-third, and we expect the company to continue to repurchase 2-3% of shares outstanding annually. Since the 2016 acquisition of Visa Europe, total returns on capital have expanded from 25% to 50% and we expect the metric to approach 100% over the next five years as net operating profits expand roughly 60% on a flat capital base. Overall, Visa should compound per share intrinsic value at 10-13% over the next five years.”
1. Microsoft Corporation (NASDAQ:MSFT)
10-year Revenue CAGR: 10.76%
Number of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ:MSFT) develops and supports services, software, devices, and solutions. It operates through the Intelligent Cloud, Productivity and Business Processes, and More Personal Computing segments. Analysts at Morgan Stanley believe that the company is in a “pole position” to benefit from the increasing demand for GenAI-powered applications, such as AI agents, which are autonomous programs wired to perform tasks without being told what to do. According to Markets and Markets, the market for AI agents is anticipated to reach $47 billion by 2030, and Microsoft Corporation (NASDAQ:MSFT) is likely to capitalize on these positive industry trends.
In addition, the company is preparing to spend around $80 billion on data centers, particularly for deploying, training, and operating cloud-based AI applications. Microsoft Corporation’s (NASDAQ:MSFT) partnership with OpenAI marks a significant milestone in its push into AI. Around 70% of the Fortune 500 use Microsoft 365 Copilot. Thus, it is in a favorable position to lead productivity software and is poised for long-term growth.
At the end of fiscal Q3 2024, 279 hedge funds held stakes in Microsoft Corporation (NASDAQ:MSFT), with a total value of more than $91 billion. Among these hedge funds, the Bill & Melinda Gates Foundation Trust is the company’s leading stakeholder as of fiscal Q3 2024.
Overall, MSFT ranks first among the 12 best stocks to buy in 2025 for beginners. While we acknowledge the potential of these best 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. If you are looking for an AI stock that is more promising than MSFT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
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