In this article, we discuss 5 best stocks to buy and hold for a lifetime. If you want to see more best stocks to buy and hold for a lifetime, the risk/reward, and methodology of this list, go directly to 10 Best Stocks to Buy and Hold for a Lifetime.
5. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 135
Apple Inc. (NASDAQ:AAPL) ranks #5 on our list of 10 Best Stocks to Buy and Hold for a Lifetime given 135 hedge funds in our database owned shares at the end of Q4. Given its huge scale, Apple Inc. (NASDAQ:AAPL) has substantial competitive advantages given its strong brand and immense financial resources. Apple Inc. (NASDAQ:AAPL) is also working on future products such as autonomous vehicles and mixed reality that could help it eventually diversify from the iPhone if they are successful.
4. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 152
Before ChatGPT launched, Alphabet Inc. (NASDAQ:GOOG) has widely been regarded as one of the AI leaders. With ChatGPT’s substantial growth, however, and the app’s integration into Bing, Alphabet Inc. (NASDAQ:GOOG) now faces a challenge in its core search business. Nevertheless, ChatGPT makes mistakes and Alphabet Inc. (NASDAQ:GOOG) has its own version of ChatGPT that the company will need to figure out how to monetize successfully. If Alphabet Inc. (NASDAQ:GOOG) can maintain its search profitability and launch new AI products, the stock has upside given its forward P/E ratio of 15.07 as of 2/22. If Alphabet Inc. (NASDAQ:GOOG) fails to maintain its existing profitability in search, the stock might be the riskiest on our list even if it is a blue chip.
3. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 194
Meta Platforms, Inc. (NASDAQ:META) is a social media giant that’s in the news given a Washington Post article on Wednesday saying it is planning more job cuts. In November, the company laid off 13% of its workforce as Meta Platforms, Inc. (NASDAQ:META)’s profitability has decreased from 2021 given its substantial investments in the metaverse. Although its profitability in 2022 is lower than what it was in 2021, Meta Platforms, Inc. (NASDAQ:META) has long term potential given its billions of users and its AI potential in the future.
2. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 240
Amazon.com, Inc. (NASDAQ:AMZN) is an e-commerce and cloud leader that could benefit from AI by the technology potentially making the company’s operations more efficient and by increasing demand for cloud processing. According to the Financial Times, Amazon.com, Inc. (NASDAQ:AMZN) is also planning to expand its physical stores in the future that could help it sell more groceries. Amazon.com, Inc. (NASDAQ:AMZN) has more growth potential in the future if it maintains its market share in e-commerce and the cloud.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 259
Microsoft Corporation (NASDAQ:MSFT) ranks #1 on our list of 10 Best Stocks to Buy and Hold for a Lifetime given 259 hedge funds in our database owned shares at the end of Q4. Microsoft Corporation (NASDAQ:MSFT) has potential in the long term given it could benefit from AI’s growth with more cloud processing demand. Microsoft Corporation (NASDAQ:MSFT) also could potentially gain market share with Bing even if AI still is inaccurate in many instances.
Polen Global Growth Strategy commented on Microsoft Corporation (NASDAQ:MSFT) in a Q4 2022 investor letter,
In the case of Microsoft Corporation (NASDAQ:MSFT), the company is performing very well. Azure now represents nearly 25% of the total business and continues to compound at a higher rate. Although growth is moderating a bit recently (as it is for AWS and Google Cloud Platform as well), these three platforms collectively generated more than $140 billion in revenue during the last 12 months and are still growing at a healthy rate. Further, Microsoft Cloud, or commercial cloud (which includes Azure and other cloud services, Office 365 Commercial, the commercial portion of LinkedIn, Dynamics 365, and other cloud properties) continues to grow roughly 30% and is now about half the business. Mathematically, commercial cloud could decelerate to 20% growth with all other segments decelerating to zero growth and total company revenue growth would still be at least double digits. We believe Microsoft is positioned to compound underlying earnings per share at a midteens rate over the next five years. At 22x earnings, we felt the valuation was attractive and that it should be a large position.
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