In this article, we will take a look at the 7 best stocks to buy for the long term.
Market Strategist Says The Economy May Re-Accelerate on its Own
On September 23, Chris Watling, Longview Economics founder, CEO, and chief market strategist, appeared in an interview on Yahoo Finance to discuss the rate easing path and the impact it may have on the market.
According to Walting, the market is deeply divided on not two but three different sides. While some analysts and investors foresee a recession, others believe the economy is going towards a soft landing, and of those a small minority believe that the economy may accelerate at a rapid pace. Walting also added that while predicting the appropriate terminal rate is interesting, there is a lot more going on with the economy. Comparing economic conditions to the 2008 recession, households and corporations are in much better shape, hinting that a recession may not be the most likely outcome.
He believes that the economy may be slowing right now but it may experience faster reacceleration than before without the need for further falls. His advice to investors is to judge the economy based on multiple data points. As for the appropriate portfolio, Walting suggests that bonds are overcooked and gold must be given a pause. At the moment, the market is rotating away from tech into defensive sectors, and in the future, it may rotate more towards cyclical stocks.
The Fed is Thinking About Growth
As the S&P 500 recorded an upside following the Fed’s easing cycle, investors and analysts alike eye a soft landing for the economy. On September 26, Liz Miller, Summit Place Financial Advisors founder and president, appeared in an interview on Yahoo Finance to discuss the future of markets.
Miller states that the pivot has been great for the financial markets and now that the Fed is thinking about growth, investors are hopeful of a soft landing. She suggests that stocks in sectors such as housing, rental, finance, and consumer goods may benefit immensely from the easing interest rate cycle.
Miller suggests that the S&P 500 is not the best way to measure the performance of financial markets, given that it is skewed to the mega-cap tech stocks. Looking at other indices, other sectors have not made highs since December 2021. She believes the market may be flat but there is huge potential for upsides. Miller shares concerns over the Chinese economy and how it influences the global outlook. She suggests that for the global economy to balance, companies must work to regain consumer confidence in China.
Now that we have studied the appropriate portfolio mix for investors following the Fed’s decision, let’s take a look at the 7 best stocks to buy for the long term.
A business executive discussing investment opportunities in a stock exchange office.
Our Methodology
To come up with the 7 best stocks to buy for the long term we examined promising stocks hedge funds are piling into. These are blue chip stocks with wide moats and have long track records of driving shareholder returns. We have ranked the stocks in ascending order of the number of hedge funds that have stakes in them, as of Q2 2024.
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).
7 Best Stocks to Buy for Long Term
7. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 68
The Coca-Cola Company (NYSE:KO) ranks seventh on our list of the best stocks to buy for the long term. The Coca-Cola Company (NYSE:KO) is a soft drink manufacturer with headquarters in Atlanta, United States. The company has more than 500 brands that sell in more than 200 countries.
In the second quarter of 2024, The Coca-Cola Company (NYSE:KO) announced plans to launch a ready-to-drink cocktail in partnership with Bacardi Limited. In addition to that, the company has shifted its focus to sponsoring events such as the Olympics, music festivals, and the Euro 2024 Football Championship from regular retailing in Europe. More recently, the company partnered with Electronic Arts (EA) to sponsor the upcoming EA SPORTS College Football 25 with its Coca-Cola Zero Sugar beverage.
In the second quarter of 2024, the company logged $12.3 billion in revenue, up by 3% year-over-year. The company is known for its consistent performance, growing its net sales from $33 billion in 2020 to $46 billion in 2023. Over the past 5 years, The Coca-Cola Company (NYSE:KO) has grown its revenue at a compound annual growth rate (CAGR) of 6% and its free cash flow at a CAGR of 7%.
The company’s financial performance has made it one of the largest dividend-paying companies. The company has grown its dividends consistently for 61 years, paid out $8 billion in dividends in 2023, and expects to pay $8.4 billion in dividends in 2024.
To sum it up, The Coca-Cola Company (NYSE:KO) is not just promising as a company, but also as a reliable dividend payer, contributing to its position on our list. This explains why analysts and hedge funds are bullish on KO.
6. Pfizer Inc. (NYSE:PFE)
Number of Hedge Fund Holders: 84
Pfizer Inc. (NYSE:PFE) is one of the best stocks to buy for the long-term and we say that because at the end of Q2 2024, 84 hedge funds were bullish on PFE with total stakes amounting to $3.62 billion. Pfizer Inc. (NYSE:PFE) is a leading pharmaceutical and biotechnology company based in New York, United States.
Previously in March, the company acquired Seagen, a biotechnology firm, for $43 billion. The acquisition is projected to deliver more than $10 billion in revenues by 2030. In August, Pfizer and its biotechnology partner were approved by the FDA to roll out their new shots before the flu season commences.
On the operational front, the company is undergoing a Manufacturing Optimizing Program focused on enhancing efficiency that will deliver $1.5 billion in savings by the end of 2027. The company is notorious for putting customers first. Towards the end of August, Pfizer Inc. (NYSE:PFE) launched PfizerForAll, an online platform to make access to healthcare easier.
Overall, Pfizer Inc. (NYSE:PFE) is not just a biotechnology leader. The company is also capitalizing on improving its operations and improving access to healthcare, making it one of the best stocks to buy for the long term. During the second quarter of 2024, the company logged $13.3 billion in revenue, representing operational revenue growth of 3%.
Parnassus Investments’ Parnassus Value Equity Fund stated the following regarding Pfizer Inc. (NYSE:PFE) in its first quarter 2024 investor letter:
“During the quarter, we added new positions in Pfizer Inc. (NYSE:PFE), NICE and Charter Communications. We purchased Pfizer to capture the potential upside from any turnaround following the COVID-induced boom-bust cycle of the last few years. Pfizer’s stock price sank by more than 40% in 2023 as COVID-19 vaccine revenues rolled off, providing an attractive entry point for us. The company completed its acquisition of Seagen, which should strengthen Pfizer’s pipeline in antibody-drug conjugates (ADC). Pfizer also offers an attractive dividend yield.”
5. Walmart Inc. (NYSE:WMT)
Number of Hedge Fund Holders: 95
Walmart Inc. (NYSE:WMT) is one of the biggest retail companies in the world and one of the best stocks to buy for the long term. It operates retail outlets, wholesale units, and e-commerce sites in more than 20 countries that serve more than 240 million customers every week.
The company has remarkably high speeds of delivery due to its massive network. It currently operates 210 distribution centers and has a private fleet of 9,000 tractors, 80,000 trailers, and 11,000 drivers, all of which enabled the company to deliver 30% of orders within 3 hours over the past 12 months in the United States.
Walmart Inc. (NYSE:WMT) is consistently improving, and we say that because of its investments in technology and expansion. In FQ1 2025, the company launched an AI-backed platform allowing customers to receive product recommendations based on their likes and dislikes. As for its brick-and-mortar stores, by the end of FY 2026, the company expects more than half of its stores and fulfillment centers to be automated.
Walmart is also a favorite among sellers, as evidenced by a 36% growth in sellers on its marketplace in the fiscal first quarter of 2025. In addition to that, the company is on track to add a staggering $130 billion in sales if it achieves its 4% sales growth target over the next five years. Such can be attributed to the company’s initiatives for sellers on the Walmart Marketplace. At the end of August, Walmart Inc. (NYSE:WMT) announced new categories, established personalized omnichannel experiences, and advanced its digital and fulfillment capabilities, improving the overall seller experience.
Over the past four quarters, the Walmart Marketplace has achieved over 30% sales growth, contributing to its ranking on our list. As the demand for online retail grows, so will Walmart’s position in the market.
4. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 111
JPMorgan Chase & Co. (NYSE:JPM) is one of the best stocks to buy for the long term. The multinational finance entity serves millions of customers in over 100 countries and territories. It specializes in investment banking solutions, risk management services, and capital-raising services to companies, institutions, and the government.
In August, JPMorgan Chase & Co. (NYSE:JPM) launched a generative AI assistant that helped its employees complete tedious tasks. As for customers, the company introduced several features for customers to ease payment mechanisms and facilitate data management.
In addition to that, the company expanded its partnership with Oracle to improve payments across treasury, trade, and commerce. Not to mention, JPMorgan recently expanded biometric solutions for merchants in the US, making shopping convenient for buyers and sellers alike.
As of March 31, JPMorgan Chase & Co. (NYSE:JPM) has $4.1 trillion in assets and $3.6 trillion in assets in management, making it one of the largest banks in the United States. JPMorgan Chase & Co.’s (NYSE:JPM) strong customer base is a testament to its financial performance.
The stock was held by 111 hedge funds in the second quarter of 2024. According to the Insider Monkey database, Fisher Asset Management is the top shareholder of the company with a position worth $2.58 billion.
Carillon Tower Advisers Carillon Eagle Growth & Income Fund stated the following regarding JPMorgan Chase & Co. (NYSE:JPM) in its first quarter 2024 investor letter:
“JPMorgan Chase & Co. (NYSE:JPM) contributed positively to performance following solid financial results and positive guidance for the remainder of 2024. Moreover, growing chatter around rising capital markets activity likely contributed to the stock’s strong performance relative to other banks. Recall that JPMorgan has a robust capital markets franchise.”
3. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 184
Apple Inc. (NASDAQ:AAPL), the company behind the iPhone, is one of the best stocks to buy for the long term. Apple Inc. (NASDAQ:AAPL) also offers services such as iCloud, Apple Pay, Apple Music, and Apple TV+.
In the FQ3 2024, Apple Inc. (NASDAQ:AAPL) logged $85.8 billion in quarterly revenue, up by 5% year-over-year. Of this, the iPhone reported revenue worth $39.3 billion and Mac revenue was $7 billion, up by 2% from a year ago. Apple’s economic moat lies in its consistent financial performance. Over the past 10 years, the company has grown its revenues and net income by 8% and 10%, respectively.
In the fiscal third quarter of 2024, the company launched Apple Intelligence, a personal intelligence system backed by AI. Apple Intelligence is integrated into all new iPhone, iPad, and Mac models. The launch of iPhone 16 and iOS 18 is expected to drive strong financial results for the company for the rest of 2024.
Analysts are bullish on AAPL and their 12-month median price target of $250 points to a 10% upside from current levels. Overall, AAPL was held by 184 hedge funds in the second quarter of 2024, with total stakes worth $124.18 billion. According to the Insider Monkey database, Berkshire Hathaway is the top shareholder of the company with a position worth $84.25 billion
Columbia Contrarian Core Fund stated the following regarding Apple Inc. (NASDAQ:AAPL) in its Q2 2024 investor letter:
“Apple Inc. (NASDAQ:AAPL) – Despite the stock falling after announcing earnings in late May, Apple regained ground toward the end of the quarter, fueled by the company’s long-awaited AI announcement at its annual Worldwide Developers Conference (WDC). At the conference, the company showcased some of its new AI features powered by Apple Intelligence that would be coming to Apple products and also announced a partnership with ChatGPT. Investors greatly welcomed the announcement of Apple’s AI strategy and the stock surged, passing Microsoft as the world’s most valuable company (although this hallmark wouldn’t last). Beta testing of these new features will be coming later this summer, but the initial promise and excitement looks to be a potential catalyst for an upgrade cycle, as the company looks to persuade users who have had the same smartphone for years to consider an upgrade.”
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ:MSFT) is one of the biggest technology companies in the world that develops productivity and business suite applications, cloud products, and personal computing products.
Microsoft Corporation (NASDAQ:MSFT) reported revenue worth $64.7 billion in FQ4 2024, up by 15% year-over-year. During the same quarter, Microsoft Cloud had $36.8 billion in quarterly revenue, up by 21%. Its productivity/business processes and intelligent cloud segment, on the other hand, logged revenue worth $20.3 billion and $28.5 billion respectively.
The company is a leading investor in artificial intelligence technology. In July, Microsoft and Lumen Technologies partnered to enhance and modernize Lumen’s workloads to Microsoft Azure. Earlier in August, Microsoft Corporation (NASDAQ:MSFT) partnered with Palantir Technologies, a data software company, to deploy its suite of products in Microsoft Azure.
The company’s partnerships do not end here. BlackRock, Global Infrastructure Partners, Microsoft, and MGX recently made a $100 billion deal to enhance the functioning of data centers and AI. The company is also expanding its footprint by establishing engineering development centers in Abu Dhabi, UAE.
Overall, Microsoft Corporation’s (NASDAQ:MSFT) financial strength coupled with its strategic partnerships make it one of the best stocks to buy for the long term. In the second quarter, 279 hedge funds held positions in Microsoft (NASDAQ:MSFT) and their stakes amounted to $89.07 billion. As of June 30, the Bill & Melinda Gates Foundation Trust is the most dominant shareholder in the company and has a position worth $15.6 billion, according to the Insider Monkey database.
Fred Alger Management’s Alger Spectra Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q2 2024 investor letter:
“Microsoft Corporation (NASDAQ:MSFT) is a beneficiary of corporate America’s transformative digitization. The company operates through three segments: Productivity and Business Processes (Office, LinkedIn, and Dynamics), Intelligent Cloud (Server Products and Cloud Services, Azure, and Enterprise Services), and More Personal Computing (Windows, Devices, Gaming, and Search). During the quarter, shares contributed to performance after the company reported strong fiscal third quarter results, underscoring its leadership position in the cloud and highlighted its role as a primary facilitator and beneficiary of AI adoption. Company revenue growth, operating margin, and earnings growth surpassed consensus expectations. The utility scale Azure cloud business grew 31% in constant currency of which 7% was AI related versus 3% two quarters ago. Further, management noted most of the AI revenue continues to stem from inference rather than training indicating high quality AI applications by Microsoft’s clients. Management also indicated that the significant cost-cutting programs in corporate America are done, suggesting that the cost optimization headwinds previously impacting Azure’s growth are over. Separately, management provided color on their new AI-productivity tool, Copilot, noting that approximately 60% of Fortune 500 companies are already using Copilot, and that the quarter witnessed a 50% increase in Copilot assistance integration within Teams. We continue to believe that Microsoft has the potential to hold a leading position in AI, given its innovative approach and demonstrated high unit volume growth opportunity.”
1. Amazon.com Inc (NASDAQ:AMZN)
Number of Hedge Fund Holders: 308
Amazon.com Inc (NASDAQ:AMZN) is a technology company that specializes in e-commerce, online retail, streaming, and data cloud services. Its e-commerce platform is functional in 20 countries and ships to over 100 countries. Its proprietary cloud service, Amazon Web Services, on the other hand, is used by millions of active customers and has over 130,000 AWS partners across 200 countries.
The company is on track to capture over 40% of the e-commerce market in the United States. As for its cloud segment, AWS has logged 30% plus operating margins consistently for the past five quarters, making it a star performer.
Amazon.com Inc (NASDAQ:AMZN) is also making strides on the AI front. Over the past few months, the company has partnered with AI startups like Anthropic and signed deals with the US government to test new AI models. As for AI hardware, the company has produced several AI chips to reduce its dependence on other companies. Speaking of AI, AWS is now housing the next generation of Llama models from Meta, giving customers more choices to build, deploy, and scale generative AI applications. The new models are capable of visual reasoning, document processing, and multilingual translation.
Amazon’s growth is undeniable which explains its position on our list. Analysts are bullish on AMZN and their 12-month median price target of $220 points to a 17% upside from current levels. Overall, AMZN was held by 308 hedge funds and Fisher Asset Management was the largest shareholder, according to the Insider Monkey database.
Meridian Hedged Equity Fund stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q2 2024 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN) is a global technology company that operates e-commerce, cloud computing, digital advertising, and other businesses. We own Amazon because we believe it is well-positioned to benefit from several strong secular trends, including the shift to online shopping, the growth of cloud computing, and the increasing importance of digital advertising. The company exceeded expectations in the first quarter, with cloud-computing revenue growth accelerating, driven by easing cost optimization pressures and the ramp of generative AI workloads. The North American retail segment drove record operating margins, highlighting the success of Amazon’s efforts to improve efficiency and lower its cost to serve. International retail also showed promise, as emerging markets steadily progressed towards profitability. Given the strength across these key segments, we continue to hold the position in the company.”
Overall, AMZN ranks first among the 7 best stocks to buy for long term. At Insider Monkey, 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 AMZN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.