We recently published a list of 10 Best American Stocks To Buy and Hold in 2025. In this article, we are going to take a look at where Mastercard Incorporated (NYSE:MA) stands against other best American stocks to buy and hold in 2025.
Will the Market Continue To Be Bullish in 2025?
Wall Street’s outlook for the stock market in 2025 reflects a cautious optimism following two consecutive years of substantial gains. Analysts predict continued growth, however at a more moderate pace compared to the explosive increases of 2023 and 2024. According to a report by CNN, published on January 1, strategists anticipate a 14.8% increase in the S&P 500 for 2025, which is significant but lower than the previous years’ performances. The Index saw gains of approximately 23% in 2024 and 24% in 2023. As per the report 2025 marks a return to typical growth rates after an extraordinary period of high returns, which has not been seen since the late 1990s.
While several factors are expected to contribute to the market growth, there are potential risks that can hinder it. One of the key factors contributing to growth is the anticipated business-friendly policies under President-elect Donald Trump. Dan Ives, who is a technology senior analyst at Wedbush Securities in his December 30 note mentioned his expectations that tech stocks can rise 25% in 2025 due to less regulation under the Trump administration. The analyst has picked Technology and Artificial Intelligence (AI) stocks as his best performers for the year.
On the other hand, there are potential risks that could negatively impact the stock market. For instance, the uncertainty surrounding Trump’s policy decisions may create a volatile environment for markets. Traders are particularly wary of how proposed tariffs could affect economic stability and investor confidence. David Sekera from Morningstar emphasizes that the implementation of tariffs is a significant wildcard that could sway market performance in either direction. We recently covered the analysis of Jurrien Timmer, Director of Global Macro at Fidelity Management & Research Company in our article titled, 12 High Growth International Stocks to Invest in Now. Here’s a piece from our coverage:
“While talking about large-cap stock performance, Timmer raises the question of whether this trend of narrow leadership will persist. He suggested that trends continue to move in the same direction until a significant change occurs. Given that large-cap growth stocks have dominated for years, it is reasonable to assume that they may continue to lead. However, he also cautioned the investors that as per the concept of mean reversion, asset prices will eventually return to their historical averages and when this happens, it could lead to sharp corrections in stock prices. Timmer believes that while 2024 was a “Goldilocks year,” for earnings and valuations, this year can be a tussle between higher earnings and rising long-term interest rates, thereby resulting in a volatile market.”
Our Methodology
To get the list of the 10 best American stocks to buy and hold in 2025, we used Insider Monkey’s third-quarter hedge funds database. Using the database we ranked the top 10 American stocks in ascending order of the number of hedge funds holding stakes in them.
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)
Number of Hedge Fund Holders: 131
Mastercard Incorporated (NYSE:MA) is the second-largest payment processor in the world. The company handled more than $9 trillion in transactions in 2023 and has surged more than 21% over the past year, mainly on the back of increased digital and cross-border payments. It operates in more than 200 countries handling cross-border transactions in more than 150 currencies.
Arvind Ramnani, analyst at Piper Sandler on January 24 maintained his Buy rating on the stock and kept his price target of $591 for MA stock. During the fiscal third quarter of 2024, Mastercard Incorporated (NYSE:MA) noted that they are experiencing significant growth and are expanding their services. Management shared their plans of acquiring Recorded Future and Minna Technologies. The company has already finalized its deal to acquire Recorded Future for $2.65 billion. Recorded Future is a leading threat intelligence company with over 1,900 clients across 75 countries, including many Fortune 100 companies and government entities. The acquisition will enhance Mastercard Incorporated’s (NYSE:MA) capabilities in identifying and mitigating cyber threats, which are increasingly important as digital transactions grow.
The company is committed to capitalizing on the shift towards electronic payments. This includes enhancing its presence in commercial payments and exploring new payment flows. During the third quarter, it reported a 14% increase in net revenues and a 13% rise in adjusted net income compared to the previous year, driven by increased consumer spending and cross-border transactions. It is one of the best American stocks to buy and hold in 2025.
Montaka Global Investments stated the following regarding Mastercard Incorporated (NYSE:MA) in its Q3 2024 investor letter:
“Montaka owns several duopolists in the financial services industry, including Visa and Mastercard Incorporated (NYSE:MA) in payments; and S&P Global in credit ratings and financial data services. These businesses have competitively protected and reliably growing core businesses. But they also have newer, high-probability adjacent opportunities. The market, however, is underappreciating this powerful combination, in our view.
For Visa and Mastercard, their core businesses in global payment processing are being complemented by significant growth in two areas:
New processing opportunities in peer-to-peer, business-to-business, business-to-consumer, and government-to-consumer payments; and
Value-added services, including risk, fraud-detection, issuance, acceptance, and open banking.”
Overall, MA ranks 9th on our list of best American stocks to buy and hold in 2025. 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.
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Disclosure: None. This article is originally published at Insider Monkey.