We recently compiled a list of the 12 Best Fortune 500 Stocks To Buy According to Hedge Funds. In this article, we are going to take a look at where JPMorgan Chase & Co. (NYSE:JPM) stands against the other Fortune 500 stocks.
The Fortune 500 list includes companies that generate the highest revenue in the United States. In total, Fortune 500 companies represent two-thirds of the US GDP with $18.8 trillion in revenues, $1.7 trillion in profits, and $43 trillion in market value (as of March 28, 2024), and they employ approximately 31 million people worldwide. Large-cap stocks, which form most of the Fortune 500, are typically safer investments and offer relative stability in times of economic difficulty.
READ ALSO: 11 Best Performing Dow Stocks so Far in 2025
After registering significant gains over the last two years, the broader US market fell sharply on Friday in the wake of weaker-than-expected economic reports and softening consumer demand. A recent report by S&P Global showed that business activity in the US is slowing down, with growth decelerating to a 17-month low. The slowdown is primarily a reflection of rising uncertainty about the business environment, especially in relation to federal government policies regarding domestic spending cuts and the constant threat of looming tariffs.
There are also serious concerns of high inflation due to the said tariffs, causing consumers to be more wary of their spending habits. According to the Tax Foundation, if the tariffs threatened by President Trump are actually imposed, it would amount to an average tax increase of more than $800 per US household in 2025. The tariffs on China alone will add $172 to the tax burden per household, while the rumored imposts on Canadian oil will drive up the price of gas, affecting the entire economy.
That said, some policy measures promised by the Trump administration can also bode well for US corporations and the overall business environment, including taking a less heavy-handed approach towards mergers than under President Biden’s administration. Moreover, the cornerstone of Trump’s second term will be to relax tax policies and extend or make permanent many of the provisions of the 2017 Tax Cuts and Jobs Act that expire at the end of 2025. The President has campaigned on further reducing the base corporate rate to 20%, with an additional cut to 15% for companies that produce goods on American soil.
Another important thing to be mindful of was recently highlighted by Bank of America in a note earlier this month, warning investors of the high concentration levels in the market, where a handful of firms command the lion’s share of investments. This is partially because of passive investing, where investors shovel money into indexes indiscriminately. Passive funds now hold a higher percentage of the US stock market than active funds, which can distort market prices and severely mislead investors. To avoid a potential drawdown, the bank has advised its investors to diversify and consider investing in baskets of quality stocks with lower exposure to the Magnificent Seven stocks.
Methodology
To collect data for this article, we referred to the top 50 companies among the Fortune Global Rankings as of January 20, 2024. We then picked out 12 companies with the highest number of hedge fund investors according to the Insider Monkey database as of Q4 2024. Following are the Best Fortune 500 Stocks to Buy According to Hedge Funds.
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 group of business people discussing plans around a boardroom table adorned with a financial services company logo.
JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 123
Next on our list of the Best Large Cap Stocks According to Hedge Funds is JPMorgan Chase & Co. (NYSE:JPM), a leader in investment banking, commercial banking, financial transaction processing, and asset management. With assets of $3.9 trillion and clients in over 100 countries worldwide, the company’s extensive reach and diversification have been a key factor in its ability to navigate challenging market conditions.
JPMorgan Chase & Co. (NYSE:JPM) delivered record earnings in 2024, reporting its biggest-ever annual profit of $58.5 billion, an 18% increase from the previous year. Net income in the fourth quarter surged 50% YoY thanks to a 7% decline in non-interest expense. The record growth in earnings last year is primarily attributed to the company’s dealmakers and traders reaping a windfall from rebounding markets in the fourth quarter. JPM is recognized as one of the 12 Best Financial Sector Dividend Stocks to Buy Right Now, having made consistent dividend payments to shareholders since 1972. The company maintained its reputation as an avid dividend payer and cumulatively paid a common dividend of $3.5 billion, or $1.25 per share, in Q4 2024.
Shares of JPMorgan Chase & Co. (NYSE:JPM) have surged by more than 44% over the last year, outperforming the broader market, thanks to its strong fundamental performance and durable competitive strengths.
Overall JPM ranks 7th on our list of the best Fortune 500 stocks to buy according to hedge funds. While we acknowledge the potential for JPM as an investment, our conviction lies in the belief that some 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.
