We recently published a list of 10 Best Fundamental Stocks to Buy According to Billionaires. In this article, we are going to take a look at where Visa Inc. (NYSE:V) stands against other best fundamental stocks to buy according to billionaires.
As per Fitch Ratings, the US tariffs are now at levels that continue to transform the global economic outlook, meaningfully increasing the US recession risks as well as constraining the US Fed’s ability to reduce the interest rates further. The ratings agency believes that tariff hikes are expected to result in increased consumer prices and reduced corporate profits in the US. The increased prices can squeeze real wages, impacting consumer spending, with reduced profits and policy uncertainty weighing over business investments. Notably, upward pressure on goods prices due to tariffs would mean that the US Fed is likely to become more cautious when it comes to further rate cuts.
Tariffs Can Be Reduced, Says UBS
In the base case (to which UBS assigns a 50% probability), the firm anticipates tariffs to be reduced from the levels that have been announced. That being said, the process is expected to take some time. UBS anticipates that there can be a tariff-related slowdown in growth in Q2 and Q3. Even if tariffs get reduced by the end of the year, the shock and related uncertainty can result in a near-term slowdown in the broader US economy, impacting FY 2025 growth.
UBS believes that market uncertainty is expected to remain elevated, with investors focusing on potential downgrades to consensus US economic and earnings growth projections, the risk related to the tit-for-tat escalation, among others. Therefore, there can be an extended period of volatility for the broader US equities.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
What Should Investors Do?
Despite the uncertainties, UBS expects that the market will end the year higher. Apart from themes of AI and Power and resources, the firm has identified longevity and companies benefiting from the megatrend as the third Transformational Innovation Opportunity. The investors can also consider using yield-generating strategies so that they can benefit from current increased levels of volatility. UBS says that since the tariffs have been announced, negotiations to soften can now start.
Furthermore, the tariff revenue can be utilised to offset the cost of extending tax cuts. Additionally, the Fed may respond to weakening growth by cutting interest rates. Morningstar believes that some of the leading mega-cap stocks rated as “wide moat” have experienced a decline this year. The firm believes that wide-moat stocks are the most attractively valued, and it sees value throughout the entire range of such stocks.
Our Methodology
To list the 10 Best Fundamental Stocks to Buy According to Billionaires, we sifted through Vanguard S&P 500 ETF and Insider Monkey’s exclusive database of billionaire stock holdings to shortlist the companies that have at least ~8% revenue and net income growth over the past 5 years. For the stocks with the same number of billionaire holdings, we have used the number of hedge fund investors as a secondary metric to rank the stocks, as of Q4 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A portfolio manager at an investment firm, studying the markets intently.
Visa Inc. (NYSE:V)
5-year Revenue Growth: 9.3%
5-year Net Income Growth: 10.05%
Number of Billionaire Investors: 26
Number of Hedge Fund Holders: 181
Visa Inc. (NYSE:V) operates as a payment technology company in the US and internationally. The company’s strategic focus on expanding value-added services (VAS) and establishing new payment flows places it for sustained growth moving forward. Apart from providing additional revenue streams, these services enhance the company’s value proposition to issuers, acquirers, and merchants. Through providing a comprehensive suite of services over and above the basic transaction processing, Visa Inc. (NYSE:V) can deepen the relationships with partners as well as increase the switching costs, further improving the competitive moat.
The company’s comprehensive suite of value-added services spans 5 categories — Issuing Solutions, Acceptance Solutions, Risk and Identity Solutions, Open Banking Solutions, and Advisory Services. Visa Inc. (NYSE:V) has completed the acquisition of Featurespace, which is a developer of real-time AI payments protection technology that prevents and mitigates payments fraud and financial crime risks. With real-time payments becoming more prevalent, the advanced fraud detection systems would be critical. Also, WSJ reported that Visa Inc. (NYSE:V) has offered Apple a ~$100 million payment in an effort to get the tech giant’s credit card as part of the battle between the well-established payment networks.
Meridian Funds, managed by ArrowMark Partners, released its Q4 2024 investor letter. Here is what the fund said:
“Visa Inc. (NYSE:V) is the world’s largest retail electronic payments network. We hold Visa in the portfolio because of its formidable competitive moat, built on network effects spanning billions of cards and millions of merchants globally. The company continues to benefit from the secular shift toward electronic payments while expanding its portfolio to include high-growth adjacent offerings. While U.S. market penetration is mature, international markets—particularly in emerging economies, where cash usage remains prevalent— offer significant growth opportunities. Visa’s operating model demonstrates strong leverage, with incremental revenue efficiently flowing to the bottom line. This quarter, Visa outperformed expectations across key metrics, with payment volumes and transaction growth proving resilient despite macro uncertainties. Looking ahead, we anticipate continued momentum into fiscal 2025, driven by the ongoing transition to digital payments, international expansion, and the scaling of newer business lines.”
Overall, V ranks 4th on our list of best fundamental stocks to buy according to billionaires. While we acknowledge the potential of V as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for a deeply undervalued AI stock that is more promising than V but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
