12 Best American Stocks To Buy In 2024
In this article, we discuss 12 best American stocks to buy. If you want to skip our discussion on the US stock market trends and outlook, head over to 5 Best American Stocks To Buy In 2024.
Stocks are continuing their strong performance after a successful year, with the S&P 500 exceeding the 5,000 milestone. UBS strategists expect this trend to persist, citing recent data and a favorable macroeconomic environment. The rally is supported by robust labor market strength and GDP growth, which surpassed expectations. UBS sees potential for further gains, especially if a "Goldilocks" economic scenario unfolds, where strong US growth and low inflation allow for aggressive rate cuts by the Federal Reserve. The market is already pricing in such cuts, and UBS remains optimistic about the stock market outlook.
The 2024 stock market rally is gaining momentum as investors assess whether recent economic data will impact the Federal Reserve's anticipated interest rate cuts. There is growing optimism that the Fed will achieve a soft landing for the U.S. economy. Companies are effectively managing rising costs and historically high interest rates, with fourth quarter earnings surpassing expectations. March is expected to focus on inflation, interest rates, and the labor market. Rob Swanke, a senior equity strategist at Commonwealth Financial Network, expects the first Fed rate cut to occur in June. Federal Reserve Chair Jerome Powell, in a February "60 Minutes" interview, acknowledged that the Fed's monetary policy tightening might cause some discomfort but emphasized the need for confidence in controlling inflation before interest rate cuts.
The stock market has had an exceptional beginning in 2024, witnessing frequent record highs as investors eagerly engage in the surge driven by artificial intelligence, particularly in companies like Nvidia and Microsoft. Bank of America highlighted the significance of a technical indicator signaling an "overbought" market condition, where stocks trade above fair value. This indicator has been active for four months and may play a crucial role in determining whether the bullish momentum in equities will continue throughout the rest of the year. In cases where the indicator remains "overbought" for an entire calendar year, the S&P 500 has seen positive returns 100% of the time, with average and median returns at 19.0% and 16.8%, respectively. However, there were average and median pullbacks of 6.4% and 6.9% during those years. Conversely, when the S&P 500 is initially overbought in January but later loses this status on a monthly closing basis, the market becomes more unpredictable and less robust, especially when the indicator remains out of "overbought" for three consecutive months or more.
BofA analysts commented:
"A persistent overbought above -20 on the 28-month Williams %R is a bullish overbought for the S&P 500 (SPX). This longer-term price momentum indicator moved to overbought in November 2023 and stayed overbought in December, January and February."
Some of the best American stocks to buy this year include Microsoft Corporation (NASDAQ:MSFT), Meta Platforms, Inc. (NASDAQ:META), and Alphabet Inc. (NASDAQ:GOOG).
Our Methodology
We scanned The iShares Core S&P Total U.S. Stock Market ETF's holdings that seeks to track the investment results of S&P Total Market Index, which is composed of U.S. equities. We picked 12 American stocks with the highest number of hedge fund investors, ranking them according to hedge fund sentiment. We have assessed the hedge fund sentiment from Insider Monkey’s database of 933 elite hedge funds tracked as of the end of the fourth quarter of 2023. The list is arranged in ascending order of the number of hedge fund investors in each firm. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here).
A trader at a stock exchange, vigorously watching the stocks' trends in the stock market.
Best American Stocks To Buy In 2024
12. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 91
Broadcom Inc. (NASDAQ:AVGO) is a global semiconductor company specializing in the design, development, and supply of set-top box SoCs, networking equipment, wireless access point SoCs, Ethernet solutions, and RF semiconductor devices. Broadcom Inc. (NASDAQ:AVGO) is one of the best American stocks to buy.
On February 27, Citi advised semiconductor investors to stick with successful strategies as the fourth quarter earnings season concludes. Despite mixed demand, Citi remains bullish on the semiconductor industry, projecting a minimum 11% year-over-year revenue growth in 2024. The analysts highlight their confidence in top themes for 2024, emphasizing artificial intelligence, dynamic random-access memory, and semiconductor equipment. Citi expresses particular belief in Broadcom Inc. (NASDAQ:AVGO) among AI-linked companies, anticipating significant growth in the AI market.
According to Insider Monkey’s fourth quarter database, 91 hedge funds were long Broadcom Inc. (NASDAQ:AVGO), compared to 87 funds in the prior quarter. Ken Fisher’s Fisher Asset Management is the largest stakeholder of the company, with 2.13 million shares worth $2.3 billion.
In addition to Microsoft Corporation (NASDAQ:MSFT), Meta Platforms, Inc. (NASDAQ:META), and Alphabet Inc. (NASDAQ:GOOG), Broadcom Inc. (NASDAQ:AVGO) is one of the best American stocks to monitor.
Aristotle Atlantic Core Equity Strategy stated the following regarding Broadcom Inc. (NASDAQ:AVGO) in its fourth quarter 2023 investor letter:
“Broadcom Inc. (NASDAQ:AVGO) contributed to portfolio outperformance during the quarter, as the company reported fourth quarter results which continued to show strength in its AI business segments. With the VMware acquisition having closed at the end of November, the company also provided positive fiscal year 2024 guidance on its earnings call that included synergy target goals ahead of schedule and a more positive revenue ramp for the combined businesses.”
11. Eli Lilly and Company (NYSE:LLY)
Number of Hedge Fund Holders: 102
Eli Lilly and Company (NYSE:LLY) ranks 10th on our list of the best American stocks to buy this year. It is a global pharmaceutical company engaged in the discovery, development, and marketing of human pharmaceuticals. The company's product portfolio includes medications for diabetes, oncology, rheumatoid arthritis, dermatological conditions, and other therapeutic areas. On February 6, Eli Lilly and Company (NYSE:LLY) reported a Q4 non-GAAP EPS of $2.49 and a revenue of $9.35 billion, outperforming Wall Street estimates by $0.12 and $380 million, respectively.
According to Insider Monkey’s fourth quarter database, 102 hedge funds were bullish on Eli Lilly and Company (NYSE:LLY), same as the prior quarter. Rajiv Jain’s GQG Partners is a significant position holder in the company, with 3.2 million shares worth $1.86 billion.
Aristotle Atlantic Core Equity Strategy stated the following regarding Eli Lilly and Company (NYSE:LLY) in its fourth quarter 2023 investor letter:
“Eli Lilly and Company (NYSE:LLY) is a leading pharmaceutical company that develops diabetes, oncology, immunology and neuroscience medicines. The company generates over half of its revenue in the U.S. from its top-selling drugs Trulicity, Verzenio and Taltz. The company operates in a single business segment, Human pharmaceutical products.
Eli Lilly has a deep pipeline in treatment areas focused on metabolic disorders, oncology, immunology and central nervous system disorders. Currently, there are two phase three assets, Orforglipron, an oral GLP-1 and retatrutide, a triple incretin agonist, which have the potential to expand upon the potential success of Mounjaro. We believe that Mounjaro has the potential to commercialize beyond type 2 diabetes and obesity, potentially in the areas mentioned above of heart disease, sleep apnea, fatty liver disease and chronic kidney disease. We believe the premium valuation is supported by this outsized growth profile.”
10. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 103
JPMorgan Chase & Co. (NYSE:JPM) is a global financial services company with operations in Consumer & Community Banking, Corporate & Investment Bank, Commercial Banking, and Asset & Wealth Management. It is one of the best American stocks to buy in 2024. On March 4, JPMorgan Chase & Co. (NYSE:JPM), via its subsidiary Neovest, acquired LayerOne Financial, an investment management platform, to strengthen its services for hedge funds. The deal enables Neovest's clients to centrally monitor portfolios, assess risks, execute orders with brokers, and conduct compliance checks seamlessly from a unified platform. Financial terms of the acquisition were not disclosed.
According to Insider Monkey’s fourth quarter database, 103 hedge funds were long JPMorgan Chase & Co. (NYSE:JPM), compared to 109 funds in the earlier quarter. Ken Fisher’s Fisher Asset Management is the biggest stakeholder of the company, with 11.8 million shares worth $2 billion.
Madison Sustainable Equity Fund stated the following regarding JPMorgan Chase & Co. (NYSE:JPM) in its fourth quarter 2023 investor letter:
“We updated the sustainable scorecard for JPMorgan Chase & Co. (NYSE:JPM). JP Morgan continues to have an Average rating across Governance, Social and Environmental factors. JP Morgan is using its business to improve climate change. JP Morgan has targeted $2.5 trillion in financing between 2021 and 2030 to advance long-term solutions to address climate change and sustainable development. The Board has oversight of corporate responsibility and ESG matters, but ESG and Sustainability are addressed across the firm. JPM does listen to shareholders. After a 31% For Vote on executive compensation in 2022, the Board will not be granting any special awards to Jamie Dimon or Daniel Pinto and if awarded to other Named Executive Officers, there will be a direct performance condition associated with the award. The Compensation Committee limited the cash percentage of Dimon and Pinto’s compensation.”
9. Berkshire Hathaway Inc. (NYSE:BRK-B)
Number of Hedge Fund Holders: 117
Berkshire Hathaway Inc. (NYSE:BRK-B), a global conglomerate, operates in insurance, freight rail transportation, and utility sectors. On February 26, Berkshire Hathaway Inc. (NYSE:BRK-B) announced strong Q4 operating earnings growth and the disclosure of a record cash amount on its balance sheet. The company, led by Warren Buffett, reported a 28% increase in Q4 earnings compared to 2023, driven by insurance underwriting and investment income. With $167.6 billion in cash and short-term securities, Berkshire Hathaway is nearing a $1 trillion market capitalization, joining the ranks of major tech giants like Apple, Microsoft, Alphabet, Amazon, and Nvidia.
According to Insider Monkey’s fourth quarter database, 117 hedge funds were long Berkshire Hathaway Inc. (NYSE:BRK-B), compared to 116 funds in the prior quarter. Bill & Melinda Gates Foundation Trust is the largest stakeholder of the company, with approximately 20 million worth $7.10 billion.
Here is what Black Bear Value Fund has to say about Berkshire Hathaway Inc. (NYSE:BRK-B) in its Q3 2022 investor letter:
“Going forward I expect Berkshire to compound at above average returns from this price. BRK is a collection of high-quality businesses, excellent management, and a good amount of optionality in their cash position. If the cash were to be deployed accretively, the true value would be greater than an 8% premium (as mentioned above). The combination of a pie that is growing, an increasing share of said pie due to stock buybacks, upside optionality from cash and a tight range of likely business outcomes that span a variety of economic futures gives me comfort in continuing to own Berkshire.”
8. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 131
Apple Inc. (NASDAQ:AAPL) ranks 7th on our list of the best American stocks to buy in 2024. Despite recent concerns about Apple Inc. (NASDAQ:AAPL), particularly related to generative artificial intelligence and weak iPhone sales in China, Wedbush Securities analyst Dan Ives remains optimistic. Ives, a strong supporter of Apple on Wall Street, acknowledged current challenges but emphasized a bullish outlook. He anticipates navigating through the next 1-2 quarters, with potential positive catalysts such as easier comparisons, an artificial intelligence announcement at WWDC, a robust upgrade cycle for iPhone 16, and monetization opportunities from the existing user base in Cupertino. Ives maintains his Outperform rating and a $250 price target on Apple Inc. (NASDAQ:AAPL) on March 5.
According to Insider Monkey’s fourth quarter database, 131 hedge funds were bullish on Apple Inc. (NASDAQ:AAPL), compared to 134 funds in the prior quarter. Warren Buffett’s Berkshire Hathaway is the leading stakeholder of the company, with 905.56 million shares worth $174.3 billion.
Horizon Kinetics stated the following regarding Apple Inc. (NASDAQ:AAPL) in its fourth quarter 2023 investor letter:
“The full point is that if BYD has turned its attention from its domestic market to direct global competition, then other Chinese companies can do the same. The next most visible example of Chinese commercially applied technological prowess relates to the 2nd highest-weight company in the S&P 500, Apple Inc. (NASDAQ:AAPL).
In September 2023, Huawei Technologies introduced its Mate 60 Pro smartphone. It uses its own, internally developed 5G enabled chip that is apparently competitive with the Apple A17 chip. For practical purposes it has the functionality of the iPhone 15 Pro. This came as a great surprise – perhaps even shock – to the U.S. technology community, because four years ago the U.S. placed strict sanctions on China’s access to state-of-the-art semiconductor manufacturing technology…” (Click here to read the full text)
7. Visa Inc. (NYSE:V)
Number of Hedge Fund Holders: 162
Visa Inc. (NYSE:V) is one of the biggest payment technology companies in the world. On March 5, Visa Inc. (NYSE:V) announced a seven-year agreement with Western Union to enable customers to send money to recipients' eligible Visa cards and bank accounts in 40 countries. The agreement encompasses card issuances, integration with Visa Direct, and delivery of value-added services, including risk products. Western Union customers can also receive Visa prepaid cards in specific markets. This builds upon Western Union's existing integrations with Visa Direct in 2022 and 2019, allowing US and European customers to send and receive funds directly to eligible Visa cardholders overseas. It ranks 6th on our list of the best American stocks.
According to Insider Monkey’s fourth quarter database, 162 hedge funds were bullish on Visa Inc. (NYSE:V), compared to 167 funds in the prior quarter. Chris Hohn’s TCI Fund Management is the leading stakeholder of the company, with 16.8 million shares worth $4.3 billion.
Like Microsoft Corporation (NASDAQ:MSFT), Meta Platforms, Inc. (NASDAQ:META), and Alphabet Inc. (NASDAQ:GOOG), Visa Inc. (NYSE:V) is one of the best American stocks to buy.
In its October 2023 investor letter, Lakehouse Capital stated the following regarding Visa Inc. (NYSE:V):
“Visa Inc. (NYSE:V) reported a strong result with net revenue increasing 11% year-on-year to $8.6 billion and non-GAAP earnings per share increasing by 21% to $2.33. As has been the case for many years now, the scalable nature of the business allows for revenue growth to outpace its costs, which places the company in a good position to navigate through this inflationary period. The network continues to grow, with credentials and merchant locations up 7% and 17%, respectively. Cross-border travel-related spend also maintained its robust growth, increasing 26% year-on-year while Visa Direct reported 7.5 billion transactions, up 19% year-on-year, progressing on penetrating categories such as cross-border remittances. Altogether, we’re pleased with how the business is tracking and remain positive on Visa’s outlook.”
6. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 166
Alphabet Inc. (NASDAQ:GOOG) ranks 5th on our list of the best American stocks to invest in. Waymo, Alphabet Inc. (NASDAQ:GOOG)’s self-driving unit, is set to commence testing its autonomous vehicles in Austin, Texas, in preparation for the launch of ride-hailing services in the city. This move follows recent approval from a California regulator for Waymo's commercial robotaxi services in Los Angeles, the San Francisco Peninsula, and on San Francisco freeways. Waymo has already provided over 700,000 robotaxi rides in San Francisco, parts of Los Angeles, and Metro Phoenix. However, Alphabet Inc. (NASDAQ:GOOG) has encountered safety concerns and public criticism due to collisions with other vehicles amid the expansion of its self-driving services.
According to Insider Monkey’s fourth quarter database, 166 hedge funds were long Alphabet Inc. (NASDAQ:GOOG), compared to 163 funds in the prior quarter. Ken Fisher’s Fisher Asset Management is the largest stakeholder of the company, with 45.17 million shares worth $6.3 billion.
The FPA Crescent Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its fourth quarter 2023 investor letter:
“Alphabet Inc. (NASDAQ:GOOG) continued going from strength to strength during 2023 despite concerns that competition may infringe on the company’s dominant position in Search. Thus far, Alphabet has continued to hold its own, and we look forward to seeing how the company incorporates further AI developments across the Alphabet ecosystem. Lastly, we are hopeful that the impending arrival of a new CFO will bring a renewed focus on efficiency – an area where we believe Alphabet has ample room for improvement.”
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Disclosure: None. 12 Best American Stocks To Buy In 2024 is originally published on Insider Monkey.