We recently compiled a list of the 12 Best Big Name Stocks to Invest in Now. In this article, we are going to take a look at where Berkshire Hathaway Inc. (NYSE:BRK-B) stands against other best big name stocks to invest in now.
Big name stocks refer to well-known companies that are widely recognized and have a significant presence in the stock market. These companies are often industry leaders and are included in major stock indices such as the S&P 500, Dow Jones Industrial Average, or Nasdaq Composite. These companies are characterized by their large market capitalizations, stable financial performance, and strong brand recognition.
In an interview on January 22, Dave Sekera, US Market Strategist at Morningstar, provided a detailed outlook for large-cap stocks in 2025. Sekera highlighted that the performance of large-cap stocks in 2024 was particularly strong, driven by several key factors. The explosive demand for artificial intelligence (AI) hardware and platforms, especially in the first half of 2024, significantly boosted the performance of large-cap tech stocks. Additionally, the US economy remained resilient, with faster-than-expected growth, which supported the performance of large-cap stocks. The Federal Reserve’s easing of monetary policy also played a crucial role in driving the market higher.
READ ALSO: 12 Most Promising Green Stocks According to Hedge Funds and 10 Worst Performing Energy Stocks in 2024.
However, Sekera noted that the rate of monetary policy easing is now slowing, and the market is pricing in fewer rate cuts this year than originally projected. This, combined with sticky inflation and a rise in long-term interest rates, suggests that the tailwinds that supported large-cap stocks in 2024 are beginning to recede.
Furthermore, Sekera pointed out that the concentration of market returns in 2024 was notable, with 10 stocks accounting for 58% of the market gain, despite representing only 30% of the market capitalization. This concentration is less than the 67% peak in June 2024, indicating a broadening of returns in the second half of the year. Despite this broadening, many of these large-cap stocks, particularly those tied to AI, are now trading at significant premiums. Sekera advised investors to be cautious, as very few of these large-cap stocks are currently undervalued, with most trading at 2-star or 1-star ratings, indicating they are overvalued.
Big name stocks remain a compelling investment choice, offering stability, strong financial performance, and long-term growth potential.
A team of insurance professionals in a boardroom overlooking a city skyline.
Our Methodology
To compile our list of the 12 best big name stocks to invest in now, we used Finviz and Yahoo stock screeners to identify well-known, large-cap companies, that have a significant presence in the United States stock market. We then used Insider Monkey’s Hedge Fund database to rank 12 stocks according to the largest number of hedge fund holders, as of Q3 2024. The list is sorted in ascending order of hedge fund sentiment.
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).
Berkshire Hathaway Inc. (NYSE:BRK-B)
Number of Hedge Fund Holdings: 120
Berkshire Hathaway Inc. (NYSE:BRK-B) is a multinational conglomerate that operates a diverse portfolio of businesses in various sectors, including insurance, freight rail transportation, utilities, manufacturing, retail, and more. The company is led by renowned investor and CEO Warren Buffett. Berkshire Hathaway Inc. (NYSE:BRK-B) has grown into one of the largest and most successful companies in the world.
Berkshire Hathaway Inc.’s (NYSE:BRK-B) diversified portfolio, comprising a range of businesses and industries, helps to mitigate risks and ensure that the company remains resilient in the face of economic uncertainty. Berkshire Hathaway Inc. (NYSE:BRK-B) is taking a cautious approach to investing, with around $325 billion in cash, to capitalize on potential investment opportunities that may arise in the future. This cash pile is also a deliberate strategy, driven by Buffett’s concerns about geopolitical risks, particularly the potential for a Chinese invasion of Taiwan, which could lead to a global economic depression.
In addition to its cash reserves, Berkshire Hathaway Inc. (NYSE:BRK-B) is actively managing its portfolio to optimize returns. The company has recently initiated stakes in Domino’s Pizza and Pool Corp., while reducing its holdings in Apple, Bank of America, and other companies. This portfolio rebalancing is a strategic move to minimize exposure to overvalued assets and maximize returns from undervalued ones. Berkshire Hathaway Inc.’s (NYSE:BRK-B) investment strategy is guided by a long-term perspective and focuses on quality companies with strong fundamentals and growth potential.
Overall BRK-B ranks 5th on our list of the best big name stocks to invest in now. While we acknowledge the potential of BRK-B as an investment, 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 BRK-B but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.