In this article, we will look at some of the best beginner stocks.
The US stock market has experienced a turbulent first quarter of 2025, marked by increased volatility and negative returns across the major indices. Concerns surrounding tariffs, economic data, and the performance of key technology stocks contributed to this challenging period for investors.
The year began with the revelation of DeepSeek, an Artificial Intelligence (AI) software developed in China, which rivalled its US competitors, such as ChatGPT. The software was considered revolutionary compared to others, sending shockwaves across the global markets. Reuters reported a global investor sell-off across US indexes, with one of the major tech companies alone losing $593 million in one day.
The US government was quick to implement policies that are aimed to promote US-listed tech firms while simultaneously reducing the impact of the DeepSeek AI, such as the use of tariffs against trade with Chinese firms.
The uncertainty of the US economy added to the market volatility after the Federal Reserve announced it would maintain interest between 4.25% and 4.50% in the short term. The banking sector, which is considered a good investment during times of high interest rates, is not completely immune. Analysts who previously considered 2025 to be a low-interest rate year will now price in the impact of possible NPLs (non-performing loans) due to consistent fed rates.
In March, President Trump announced further global tariffs on Europe and China, fuelling the concerns of investors. In retaliation, Europe introduced counter tariffs. Emily Bowersock Hill, CEO and founding partner at Bowersock Capital Partners, which has $850M in assets under management, responded in an email to the methodology in calculating the tariffs by the US as:
“So simplistic, and frankly primitive as to leave the market wondering, did its architects ever take Econ 101?”
The US announced tariffs of 54% on Chinese goods, which will take effect on April 9, 2025. China, in response, implemented “reciprocal” tariffs on US goods of 34%, as reported by the country’s official Xinhua News Agency. This led to the US market indexes experiencing the biggest drop since COVID-19, with investors concerned about the impact of these tariffs on the supply chains of companies globally.
The US economy is considered to be entering “continuous stagflation”, which is defined as continued inflation with very low growth and high unemployment. The Cboe Volatility Index (aka VIX) is currently at 29.68%, well above its 1-year average of 17.6%. In such economic conditions, investors should seek stocks which should provide steady/ growing revenue, dividend growth, low cyclicality, and significant cash flows and have a durable competitive advantage. Systemically important sectors are thus ideal for investors, including energy, real estate, healthcare, finance, and tech.
A close-up of a person signing a loan agreement, emphasising safety and legality of this company’s fixed & floating rate loan services.
Our Methodology
For this list, we analyzed the Tech, Finance, Real Estate, Energy, and Healthcare industries to identify the top stocks for each sector and their historical performance against the market. We then used Insider Monkey’s Q4 2024 proprietary hedge fund holdings database and identified the 12 most popular hedge fund stocks. The stocks are ranked in ascending order of their hedge fund positions.
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).
12. Citigroup Inc. (NYSE:C)
No. of Hedge Fund Holders: 101
Citigroup Inc. (NYSE:C) is a global financial services holding company operating through five segments. The Services segment offers Treasury and Trade Solutions for cash management and Securities Services for post-trade technologies. The Markets segment provides sales and trading across various asset classes and market-making services. The Banking segment encompasses investment banking, advisory services, and corporate lending. U.S. Personal Banking focuses on co-branded cards and retail services. The Wealth segment caters to high-net-worth clients and professional industries with banking, lending, investment, and trust offerings through its Private Bank, Wealth at Work, and Citigold businesses.
Citigroup Inc. (NYSE:C)’s revenue for the first quarter of 2025 was $69.67 million, beating estimates by $69.67 million, and an EPS of $1.36, exceeding expectations by $0.12. Despite the expected losses in credit cards (aka NPLs), operational improvements have led analysts to consider the stock as a reliable and stable stock for any portfolio.
The bank can identify cost reduction techniques that translate to savings for shareholders. In terms of growth, Citigroup Inc. (NYSE:C) continues to gain a foot in the US and reduce exposure to international markets, something that is considered positive in today’s global tariff wars. These are seen as CEO Jane Fraser’s strategy to focus more on corporate banking, asset management, and consumer banking.
A major metric to look at when analyzing the banking industry is the Capital Adequacy Ratio, and Citigroup Inc. (NYSE:C) is maintaining a stable growth in this ratio, rising from $145.6 billion in 2022 to $154.4 billion in 2023—an increase of nearly 6%. In essence, the company continues to be a powerful player in the banking sector, with a market capitalization of $118.82 billion and an average twelve-month trading price of $89.55, an upside of 55.17%. It is among the best beginner stocks to consider.
11. Exxon Mobil Corporation (NYSE:XOM)
No. of Hedge Fund Holders: 104
Exxon Mobil Corporation (NYSE:XOM) is a global energy and chemical company. The company is involved in the manufacture, trading, transportation, and sale of a wide range of products through 4 main segments, namely Upstream, Energy Products, Chemical Products, and Specialty Products segments.
Exxon Mobil Corporation (NYSE:XOM) is highly susceptible to headwinds in commodities, namely the price of oil. In the first week of April, the price of spot oil plummeted by 7%, the worst in a 3-year period. As per a report by Reuters, OPEC+ led by Saudi Arabia announced increased oil production for May, after suggesting oil pumping rivals Kazakhstan and Iraq that they need to improve their compliance with oil production cuts or it will start increasing its own oil production. Analysts, however, commented that these are short-term waves that can persist in commodities.
Despite these global challenges, Exxon Mobil Corporation (NYSE:XOM) continues to show stellar performance through its financials. The company had a topline of $83.43 billion for Q4 2024, with an EPS of $1.67 and cashflow of $55 billion. Chairman and CEO Darren Woods commented the following on the company’s results:
“What our 2024 performance makes clear is that the transformed company we’ve built is delivering. We strengthened and further capitalized on our unique competitive advantages, technology, scale, integration, execution excellence, and, of course, people. We demonstrated the strength of our consistent strategy now in its eighth year of driving greater value for society and shareholders alike.”
Analysts believe that fears of global tariff wars, slowing GDP & reduced consumer spending will impact the company’s overall performance in 2025. The company provided guidance on revenue for the upcoming quarter at $86.32 billion and an EPS of $1.70. Analysts have a consensus on Exxon Mobil Corporation (NYSE:XOM) average twelve-month trading price of $128.83, an upside of 21.91%, which makes it one of the best beginner stocks on our list.
10. The Walt Disney Company (NYSE:DIS)
No. of Hedge Fund Holders: 108
The Walt Disney Company (NYSE:DIS) is a global entertainment powerhouse operating through Entertainment, Sports, and Experiences segments and operates under the brands including ABC, Disney, FX, Fox, and National Geographic, producing original content through studios like Lucasfilm, Marvel, Pixar, and Walt Disney Pictures. It also operates direct-to-consumer streaming services like Disney+, Disney+ Hotstar, and Hulu. The Sports segment delivers sports-related content via ESPN and its related platforms. The Experiences segment encompasses Disney’s renowned theme parks and resorts worldwide, including Walt Disney World, Disneyland, and international locations, alongside Disney Cruise Line and Vacation Club.
The Walt Disney Company (NYSE:DIS) has proven itself as not just an entertainment powerhouse but a dynamic and competitive player in the industry. The company has changed from its humble beginnings of black and white images from 1920 to becoming an entertainment business that incorporates AI in its creative process. Bears of the stock highlight headwinds that will impact the company’s performance, notably, theatrical films will never return to levels before COVID-19, high production budgets are in the hundreds of millions, volume of content is high, which is met with a shrinking audience.
Analysts bullish on the stock recognize these factors and continue to support the price of the stock. The company’s brands are synonymous with homes across the globe, not to mention its acquisition of other brands with strong fan followings, such as LucasFilms in 2012.
The Walt Disney Company (NYSE:DIS) announced a revenue of $24.69 billion for Q1 2025, beating estimates by $143.28 million, with an EPS of $1.76, compared to estimates of $1.43. The company has a consensus among analysts of the twelve-month trading price at $126, with an upside of 49.09%.
9. Bank of America Corporation (NYSE:BAC)
No. of Hedge Fund Holders: 113
Bank of America Corporation (NYSE:BAC) is a global financial institution offering a wide array of products and services across four segments: Consumer Banking, Global Wealth & Investment Management (GWIM), Global Banking, and Global Markets. It is among the best beginner stocks to invest in.
The banking sector is usually a safe bet for any portfolio. Investors would believe the Fed’s announcement to maintain interest rates at current levels would be beneficial, however, this also leads to reduced consumer spending due to rising inflation, which can negatively impact a bank’s performance. High interest rates can lead to high debt servicing by companies, leading to head-count reduction (aka unemployment). As a result, consumers are unable to make timely payments on their credit card bills, car loans, and mortgages, leading to higher NPLs.
Bank of America Corporation (NYSE:BAC) delivered solid financials for the fourth quarter of 2024, with revenue of $25.35 billion, beating estimates by $220.32 million. Its EPS came in at $0.82, narrowly beating estimates by $0.05. The net income amounted to $6.7 billion. For the full year 2024, the bank’s revenue was $102 billion, its net income of $27 billion, and its EPS came in at $3.21. The bank shared guidance for the upcoming quarter with revenue of $26.93 billion and an EPS of $0.82.
Bank of America Corporation (NYSE:BAC) has managed to weather not only the recent inflationary crisis of 2024 but also COVID-19. The stock has an upside of 50.43%, with a consensus among analysts of the average twelve-month trading price at $51.31.
8. Eli Lilly and Company (NYSE:LLY)
No. of Hedge Fund Holders: 115
Eli Lilly and Company (NYSE:LLY) is a global pharmaceutical company focused on discovering, developing, and marketing human pharmaceuticals. The company offers a wide range of treatments across several therapeutic areas, with a portfolio that includes various insulin formulations under the Humalog and Humulin brands, as well as newer medications like Jardiance, Mounjaro, Trulicity, and Zepbound for obesity and type 2 diabetes.
Eli Lilly and Company (NYSE:LLY) actively collaborates with other pharmaceutical and biotechnology companies, including Incyte, Boehringer Ingelheim, Roche, and others, to advance its research and development efforts across its diverse therapeutic pipeline. The company markets its products in the United States, Europe, China, Japan, and other international markets.
Eli Lilly and Company’s (NYSE:LLY) Q4 2024 earnings report revealed a topline of $13.53 billion, an EPS of $5.32, and an operating income of $5.6 billion. The pharmaceutical giant continues to deliver high-quality medicine to patients globally despite fears of supply chain constraints. Chairman & CEO David Ricks highlighted the company’s stellar 2024 performance during the most recent earnings call by stating:
“2024 was a productive year for Lilly. We grew our top line, advanced our pipeline, and invested in our supply chain to meet the increasing demand for our medicines. Most importantly, we delivered for patients by bringing life-changing medicines to more people around the world. In 2024, full year revenue grew 32% compared to 2023, exceeding our first time guidance by $4 billion. Revenue grew 45% in the most recent quarter.”
This shows that the company has proactively invested in its operations to improve supply chain hurdles. On top of that, Eli Lilly and Company (NYSE:LLY) has made eight acquisitions and signed three agreements over the past 27 months, as per the company’s press releases. These begin from DICE Therapeutics in June of 2023 to the most recent, Scorpion Therapeutics, in January 2025. Analysts have a consensus on Eli Lilly and Company (NYSE:LLY) twelve-month trading price of $1,010.47, which shows an upside of 35.64%. It is among the best beginner stocks to invest in.
7. Berkshire Hathaway Inc. (NYSE:BRK-B)
No. of Hedge Fund Holders: 131
Berkshire Hathaway Inc. (NYSE:BRK-B) is a diverse holding company operating globally through numerous subsidiaries. The company’s core businesses include insurance, freight rail transportation in North America, and utilities. Beyond these, Berkshire Hathaway has significant manufacturing operations producing confectionery, specialty chemicals, aerospace and power generation components, and building materials. Alternatively, it has a strong presence in consumer goods, including recreational vehicles, apparel, footwear, toys, jewelry, & batteries. Lastly, the company engages in distribution (electronics, groceries), franchising (quick service restaurants), logistics, aviation training, and retail (automobiles, furniture, appliances, and various consumer goods).
Berkshire Hathaway Inc. (NYSE:BRK-B)’s results for Q4 2024 showed revenue of $94.92 billion and an EPS of $6.73 billion. What’s unique about the company’s results is that it has cash reserves of $325 billion. The company has a unique strategy of carrying out buybacks, i.e., essentially repurchasing and retiring older shares of Berkshire, leaving each remaining share worth more.
Berkshire Hathaway Inc. (NYSE:BRK-B) has a vast and varied portfolio that reflects a long-term investment strategy across a multitude of industries. Its long-standing Chairman, Warren Buffet, is hailed as the “Oracle” of Wall Street. His annual newsletter to shareholders is read by millions of stock market enthusiasts across the globe. This highlights investors’ belief in following the investment strategies adopted by the company for sustained growth. In a letter to annual shareholders in February, Mr. Hathway stated:
“Despite what some commentators currently view as an extraordinary cash position at Berkshire, the great majority of your money remains in equities. That preference won’t change.”
The company is an investment powerhouse that continues to acquire companies that add value to its shareholders. More importantly, management knows when to identify opportunities to divest. This was carried out in 2024, long before any other investment firm. Berkshire Hathaway Inc. (NYSE:BRK-B) has a current upside of 1.71%, with a consensus of the twelve-month trading price of $502, which makes it one of the best beginner stocks to monitor.
6. Apple Inc. (NASDAQ:AAPL)
No. of Hedge Fund Holders: 166
Apple Inc. (NASDAQ:AAPL) is a global technology giant specializing in the design, manufacturing, and marketing of a wide range of consumer electronics and related services. The company’s large product lines include the iPhone, Mac, iPad tablets, AirPods, Apple Watch, and Apple TV.
Apple Inc. (NASDAQ:AAPL) also offers a comprehensive ecosystem of services, including AppleCare support and cloud services. The App Store serves as a central hub for digital content and applications, while the company also provides advertising services, as well as subscription-based offerings such as Apple TV, Apple Music, and financial pay services, namely Apple Card and Apple Pay. Its customer base includes consumers, small and medium-sized businesses, government sectors, and corporations with a distribution network comprising of retail and online stores, partnerships with cellular carriers, wholesalers, retailers, and resellers.
Apple Inc. (NASDAQ:AAPL)’s Q1 2025 earnings revealed a topline of $124.03 billion, an increase of 3.95% YoY and beating estimates by $273.49 million. EPS was $2.40, narrowly beating expectations by $0.05. The company also provided guidance for the upcoming quarter, with revenue of $94.08 billion and an EPS of $1.61.
It should be noted that the iPhone sales, which make up the large majority of the company’s revenue stream, were stable at $69.1 billion. Apple Inc. (NASDAQ:AAPL) has been working on a foldable version of its iconic iPhone, with expectations that the product will be ready for market as soon as 2026, at a price of $2000. Analysts on X (formerly Twitter) reported that the company is expecting to finalize designs by the end of this fiscal year, while production and shipping will range between 3 to 5 million units in 2026 and as high as 20 million by 2027.
Apple Inc. (NASDAQ:AAPL)’s share price experienced a decline during the first week of April 2025 after China announced retaliatory tariffs on US goods of 34%, effective April 10, 2025. China accounts for 80% of Apple’s manufacturing capacity.
5. Visa Inc. (NYSE:V)
No. of Hedge Fund Holders: 181
Visa Inc. (NYSE:V) is a leading global payment technology company. At its core is VisaNet, a vast transaction processing network facilitating the secure authorization, clearing, and settlement of electronic payments worldwide. Visa offers a comprehensive suite of payment products, including credit, debit, and prepaid cards, not to mention modern solutions like tap to pay, tokenization, and click to pay for seamless transactions. Its portfolio also includes Visa Direct for real-time fund transfers to cards, bank accounts, and digital wallets, and Visa B2B Connect for secure cross-border business payments. Visa Cross-Border Solution caters to international consumer payments. Through Visa DPS, they offer value-added services encompassing fraud mitigation, dispute management, data analytics, and digital solutions.
There is no doubt that the company is a pioneer of digital payments, becoming one of the most preferred methods of payment globally. Visa Inc. (NYSE:V)’s latest earnings report for Q1 2025 showed revenue of $9.51 billion, beating estimates by $170.7 million. EPS was $2.75, while EBITDA was $6.81 billion. A key metric to follow for Visa is the number of new cards issued in Q1 2025, which rose to nearly 4.7 billion from 4.5 billion compared to the same quarter last year. The number of transactions has also increased, from 57.47 billion to 63.0 billion for the same period.
The company provided guidance on the upcoming quarter, with revenue of $9.58 billion and an EPS of $2.68. With an upside of 17.32%, Visa Inc. (NYSE:V) is considered to be one of the best beginner stocks to invest in.
4. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
No. of Hedge Fund Holders: 186
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) manufactures, packages, tests, and sells integrated circuits and other semiconductor devices globally, dominating the global foundry market with 50% market share.
At the end of January, Taiwan Semiconductor Manufacturing Company Limited’s (NYSE:TSM) stock price slumped after the news of a Chinese AI company producing a more efficient AI model, similar to all other tech giants. If anything, analysts believe this creates a buying opportunity for investors who wish to jump on the chance to invest further. CEO C.C. Wei and President Trump met earlier this year and stated the company will invest $100B in new capital in the U.S. over the next four years as it looks to boost its presence in the country.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) was one of the tech firms specifically named by China, which would be hit by the country’s retaliatory tariffs on US tech companies, with a tax rate of 34%. The names also included other tech giants such as well. In contrast, President Trump, in a speech nicknamed “Liberation Day”, highlighted TSMC as a firm that would avoid tariffs from the US’s government policies.
The company reported a revenue of $26.73 billion and an EPS of $0.02 for Q4 2024. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)’s twelve-month trading price is $247.07, representing an upside of nearly 70%.
3. Alphabet Inc. (NASDAQ:GOOGL)
No. of Hedge Fund Holders: 234
Alphabet Inc. (NASDAQ:GOOGL) is a pioneer of the tech sector, a multinational conglomerate delivering a wide array of digital products and platforms across global markets. Its portfolio consists of Google Services, Google Cloud, and Other Bets.
The company boasts a profile that few can rival. In terms of financials, Alphabet Inc. (NASDAQ:GOOGL)’s earnings report for the final quarter of 2024 shows a revenue of $96.47 billion, up 11.77% YoY, while EPS was $2.15. Operating income was reported at $31 billion and net income of $26.5 billion, up 28% and 31%, respectively. The company’s cash reserves are at $95 billion. In terms of business model, the company’s portfolio touches almost every person with a smartphone on the planet. The game changer is its investments in AI. The company’s Chief Financial Officer spoke on investment in AI infrastructure during the earnings call, stating:
“As we mentioned on the Q3 call, as we expand our AI efforts, we expect to increase our investments in capital expenditure for technical infrastructure, primarily for servers, followed by data centers and networking. We expect to invest approximately $75 billion in CapEx in 2025.”
Alphabet Inc.’s (NASDAQ:GOOGL) DeepMind is a leader in AI, Waymo SW is the leading self-driving vehicle company in the market, and its YouTube and Android smartphones dominate their respective markets, which makes it one of the best beginner stocks to monitor.
2. Meta Platforms, Inc. (NASDAQ:META)
No. of Hedge Fund Holders: 262
Meta Platforms, Inc. (NASDAQ:META) is a global technology conglomerate focused on connecting people through various digital platforms and immersive technologies, operating in two segments, Family of Apps (FoA) and Reality Labs (RL). The FoA segment encompasses popular social media and messaging applications: Facebook, Instagram, and WhatsApp. The Reality Labs (RL) segment advances virtual, augmented, and mixed reality technologies, offering consumer hardware, software, and content designed to enhance connectivity. These products aim to bridge the physical and digital worlds, enabling users to interact in immersive environments.
Meta Platforms, Inc. (NASDAQ:META) launched its Meta AI chatbot in the European Union despite ongoing regulatory scrutiny for potential Digital Markets Act violations. The AI service, offering chat functionality in six European languages, will be available across Meta’s apps in 41 European countries. It is worth noting that this launch occurs amid increasing pressure on U.S. tech giants from EU antitrust authorities, with recent findings indicating breaches of DMA rules by Google and recommendations for Apple to comply.
Meta Platforms, Inc. (NASDAQ:META)’s AI utilizes the open-source Lama series, which has begun to see challenges compared to its Chinese rival Deepseek, which is considered a more cost-efficient model. With this news, analysts propose the stock as a Buy opportunity.
Meta Platforms, Inc. (NASDAQ:META) reported earnings of $48.39 billion (up 20.63% YoY) for Q4 2024, beating estimates by $1.39 billion and an EPS of $8.02, clearing estimates by $1.28. The company has daily active users (DAU) of 3.35 billion as of Q4 2024, up from 3.29 billion in Q3 2024. Meta AI serves approximately 700 million monthly active users. The stock has an average twelve-month trading price of $762.99, an upside of 50.96%, which makes it one of the best beginner stocks to invest in.
1. Microsoft Corporation (NASDAQ:MSFT)
No. of Hedge Fund Holders: 317
Microsoft Corporation (NASDAQ:MSFT) is a pioneer in the technology sector. A global giant offers a wide range of software, services, and devices, with operations divided into three main segments: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing.
Microsoft Corporation’s (NASDAQ:MSFT) earnings report for Q2 of 2025 revealed revenue of $69.63 billion, up 12.27%, clearing analysts’ estimates by $823.09 million and an EPS of $3.23. The AI segment contributed $13 billion to revenue, while revenue from cloud services was $40.9 billion, up 21%. The company paid $6.2 billion in dividends and carried out a share repurchase worth $3.5 billion. This shows strong, continuous growth despite geo-political headwinds and market headwinds, which analysts write off as “short-term”. The company’s Chairman and Chief Executive Officer, Satya Nadella, commented on the company’s cloud services’ performance, stating:
“Enterprises are beginning to move from proof-of-concepts to enterprise-wide deployments to unlock the full ROI of AI. And our AI business has now surpassed an annual revenue run rate of $13 billion up 175% year-over-year.”
Last year, Mr. Satya Nadella made a trip to Malaysia, as US tech firms continue to reduce their dependence on China as a regional partner due to a shift in US Government policies. Mr. Nadella announced MSFT plans to launch its first cloud region in Malaysia with three data centers by mid-2025.
With its diversified business, robust margins, and substantial cash flow, Microsoft Corporation (NASDAQ:MSFT) continues to be a defensive buy, offering resilience against macroeconomic headwinds and tariff concerns.
Overall, Microsoft Corporation (NASDAQ:MSFT) ranks first on our list of the best beginner stocks. While we acknowledge the potential of MSFT, our conviction lies in the belief that 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 an AI stock that is more promising than MSFT 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. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and investors. Please subscribe to our daily free newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
