We recently published a list of Starter Stock Portfolio 12 Safe Stocks to Buy. In this article, we are going to take a look at where The Walt Disney Company (NYSE:DIS) stands against other 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.
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).
A packed theater of moviegoers watching a blockbuster film produced by the entertainment company.
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%.
Overall, DIS ranks 10th on our list of best beginner stocks. While we acknowledge the potential of DIS, 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 DIS 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.
