We recently compiled a list of the 15 Best Cheap Stocks to Buy for 2025. In this article, we are going to take a look at where JPMorgan Chase & Co. (NYSE:JPM) stands against other best cheap stocks to buy for 2025.
The U.S. consumer prices report released this week revealed a less-than-expected increase in December, signaling a potential cooling in inflation pressures. This data has sparked bets on further tame inflation and a drop in interest rates. The core consumer price index (CPI), which excludes volatile food and energy prices, increased by 0.2%, down from 0.3% over the previous four months. This marks the first decrease in the rate of core CPI growth in six months, driven by lower hotel prices, slower increases in medical care costs, and moderate rent growth.
The data has renewed hopes that the Federal Reserve might ease interest rates sooner than anticipated. Before the report, most market participants expected rate cuts to occur in the second half of the year, if at all. However, the latest data has bolstered expectations for two cuts this year and even the possibility of a rate cut as early as March. Following the release, Treasury yields dropped, the S&P 500 rose, and the dollar weakened.
The sharp surge in equity prices is not surprising, as lower interest rates are generally bullish for several reasons. When interest rates fall, borrowing becomes cheaper for companies, which can lead to increased investment and expansion. Stock prices are often valued based on the present value of future earnings or cash flows, discounted by interest rates. Lower interest rates reduce the discount rate, increase the present value of future earnings, and make stocks appear more valuable.
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In an interview with CNBC on January 16, Christopher Waller, Governor of the Federal Reserve, discussed the recent economic data and its implications for future monetary policy decisions. Waller welcomed the strong jobs report from the previous week and the latest inflation prints, which he found particularly encouraging. He noted that the inflation data was very positive, with core PCE inflation coming in below 0.2% for the sixth month out of the last eight. This trend, he believes, is bringing inflation closer to the Fed’s 2% target in terms of core, despite a couple of bumps in September and October.
Waller emphasized that while the inflation data is promising, it is crucial to see if this trend continues. He mentioned that base effects from last year will play a role, but he is hopeful that a repeat of the shock experienced in January and February of last year will not occur again. If the current trend persists, he suggested that rate cuts could be on the table in the first half of the year.
When asked about the exact timing of potential rate cuts, Waller indicated that much depends on the continued improvement in inflation data. He stressed that the Fed is not in a rush to act, as Chair Jerome Powell has stated, and that they need to see more progress on inflation before making any decisions. Waller mentioned that while March is not entirely ruled out, any significant economic disruptions could push the timeline back. Regarding the number of rate cuts that might be expected this year, Waller reiterated that the data will drive the Fed’s decisions. He noted that the extent of progress on inflation and the perception of the neutral rate among policymakers will influence the number of cuts.
The latest consumer price data has sparked optimism among investors, as easing inflation and the possibility of interest rate cuts create a more favorable environment for businesses and markets.
A group of business people discussing plans around a boardroom table adorned with a financial services company logo.
Our Methodology
To compile our list of the 15 best cheap stocks to buy for 2025, we used Finviz and Yahoo stock screeners to find the 40 largest companies trading below the forward P/E ratio of 15 as of January 15. We then used Insider Monkey’s Hedge Fund database to rank 15 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).
JPMorgan Chase & Co. (NYSE:JPM)
Forward P/E Ratio as of January 15: 14.60
Number of Hedge Fund Investors: 105
JPMorgan Chase & Co. (NYSE:JPM) is a leading global financial services firm with operations in more than 60 countries. The company provides a wide range of financial services, including consumer and community banking, commercial banking, investment banking, and asset management. JPMorgan Chase & Co. (NYSE:JPM) serves corporations, governments, and individuals.
JPMorgan Chase & Co. (NYSE:JPM) is strengthening its consumer and community banking segment, which includes banking, wealth management, and credit card services. The firm has been actively expanding its branch network in key markets and leveraging advanced technology to enhance the customer experience. Additionally, JPMorgan Chase & Co. (NYSE:JPM) is investing in digital platforms and mobile applications to provide seamless and convenient banking services to attract a younger demographic and tech-savvy customers. The company’s efforts in this area are evident in the record number of first-time investors and nearly 10 million new card accounts acquired in 2024.
The Commercial & Investment Bank (CIB) is a cornerstone of JPMorgan Chase & Co.’s (NYSE:JPM) business, and the company is continuously working to maintain and expand its leadership position. In 2024, the CIB achieved record revenue in markets, payments, and security services, driven by strong performance in investment banking fees, advisory services, and underwriting. To sustain this momentum, JPMorgan Chase & Co. (NYSE:JPM) is investing in technology and talent, particularly in areas where it sees opportunities for growth. The firm is also focusing on improving operational efficiency, client service, and data analytics capabilities to provide more personalized and insightful services to clients, thereby fostering long-term relationships and driving revenue growth.
Overall JPM ranks 3rd on our list of the best cheap stocks to buy for 2025. While we acknowledge the potential of JPM 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 JPM 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.