We recently published a list of 10 Best Major Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where Mastercard Incorporated (NYSE:MA) stands against other best major stocks to buy according to hedge funds.
After a notable growth of 25% for the broader market in 2024, the S&P 500 index gained a little under 4% in the first month of 2025. The stock market had a mixed start to 2025 after the U.S. tech companies took a massive hit from the launch of Deepseek’s R1 AI model. Despite a major blow, the tech-heavy NASDAQ 100 index has gained over 4.50% year-to-date.
READ ALSO: 10 Large-Cap Stocks Insiders Are Selling Recently
Inflation and Tariff Concerns
U.S. stocks fell on February 12 following the release of January inflation data. The consumer-price index (CPI) soared 3% in January from a year ago, exceeding economists’ estimates. The data has somewhat stoked investors’ concerns about price pressures and the worry that interest rates might not come down as expected.
January CPI usually indicates big price adjustments made by businesses at the start of the year. Moreover, the beginning of a new administration has an impact on businesses. According to Goldman Sachs Research’s chief US equity strategist David Kostin, every five-percentage-point increase in the US tariff rate is estimated to reduce S&P 500 EPS by roughly 1-2%.
Therefore, if the U.S. administration sustains the proposed tariff rates, a 25% tariff on imported goods from Mexico and Canada and an additional 10% tariff on imports from China would reduce S&P 500 EPS forecasts by nearly 2-3%, as per Goldman’s Research.
However, the tariff policy doesn’t slow down the AI investment by the U.S. tech giants as they continue to expand their AI-related services and products. Four out of the Big Five companies are projected to invest over $300 billion in 2025 building data centers to fuel the AI boom.
Our Methodology
We have listed the top 10 best major stocks based on hedge fund sentiment, according to Insider Monkey’s database. The best major stocks are ranked in ascending order of the number of hedge fund holders, 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).
A woman using a payment terminal at the checkout of a store showing payment products and solutions.
Mastercard Incorporated (NYSE:MA)
No. of Hedge Fund Holders: 131
Mastercard Incorporated (NYSE:MA) is a financial service provider that connects consumers, financial institutions, merchants, governments, and businesses worldwide. The company allows users to make payments by creating various payment solutions and services using its brands including MasterCard, Maestro, and Cirrus. Mastercard’s Q4 2024 earnings highlight its continued strength as a leader in the payments sector, posting a notable 12% volume growth and a 6% rise in card circulation.
According to The Nilson Report, credit card purchase volume amounted to $19.6 trillion in 2023, with Visa leading the market having 1.3 billion credit cards followed by Mastercard with 1.1 billion credit cards. MA makes up 32% of all credit cards in the world. Mastercard’s global purchase volume by credit was around $4 trillion or 21% of the total market in 2023.
Mastercard Incorporated (NYSE:MA)’s strong position and dominance in the market make it one of the best major stocks. On February 4, Wells Fargo analyst Donald Fandetti raised the price target on MA shares from $585 to $625 and kept an Overweight rating on the shares. The analyst remains bullish following the company’s strong quarterly results and 2025 revenue guidance, with the management expecting the net revenue to grow at the high end of low double digits.
Overall, MA ranks 10th on our list of best major stocks to buy according to hedge funds. While we acknowledge the potential of MA to grow, 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 MA 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
Disclosure: None. This article is originally published at Insider Monkey.
