The Safest Stocks Right Now According to Hedge Funds!
Discover Top 20 Low-Volatility Stocks Favored by Leading Hedge Funds to Protect and Grow Your Portfolio
Dear Investors,
Navigating today's unpredictable markets and global uncertainties has made protecting your investments a top priority.
One compelling approach to achieving this lies in “safe stocks”, characterized by their association with well-established companies boasting robust balance sheets, consistent performance, dominant market positions, and reliable dividend histories, offer a compelling blend of stability and growth potential.
These “blue chip stocks” serve as market leaders, providing a haven amid escalating recession risks and geopolitical turbulence.
“The idea of investing in a company just because it’s safe is not necessarily a good idea. But it’s a much better idea than investing in something that is clearly risky.”
—Charlie Munger
Hedge funds, celebrated for their strategic foresight, have increasingly pivoted toward these stocks for their resilience.
This shift in focus appears to be driven by growing concerns about the broader economic outlook.
A Goldman Sachs report further underscores this trend, revealing that the top 50 stocks favored by hedge funds yielded a 10% return in 2025, significantly outpacing the broader market’s 3% gain.
This isn't just anecdotal, academic research by Nardin Baker and Robert Haugen, in their paper: “Low-Risk Stocks Outperform within All Observable Markets of the World” reinforces this strategy.
Their findings demonstrate that low-volatility stocks deliver superior returns with reduced risk compared to high-volatility counterparts, challenging the conventional wisdom that higher risk equates to higher rewards.
I present an updated analysis of the 20 best safe stocks for 2025, based on the stocks most frequently appearing in hedge fund portfolios, using Goldman Sachs’s database of over 695 hedge funds as of Q1 2025.
My methodology prioritizes mega-cap stocks with positive five-year returns, projected revenue growth, low volatility, and, where applicable, dividend payments, ranked by the sum of hedge funds with 10 to 200 positions and those with the stock as a top 10 holding.
Below are the top 20 safe stocks, their market caps, five-year returns, and 2024 financials:
20. AppLovin Corp. (NASDAQ:APP)
Number of Hedge Funds with 10 to 200 Positions: 31
Number of Funds with Stock as Top 10 Holding: 16
Total Hedge Fund Interest: 47
Market Capitalization: ~$122B
Five-Year Return: ~400% (since IPO in 2021)
Key Financials (2024): Revenue: $4.7B, Operating Margin: 39%, EPS: $4.53
AppLovin Corp. (NASDAQ:APP), a mobile technology company, provides marketing and monetization solutions for app developers.
AppLovin’s AI-driven platform enhances ad targeting, driving a 40% revenue increase in 2024.
Its expansion into gaming and e-commerce strengthens its portfolio.
Analysts forecast a 20% upside, citing AppLovin’s growth in the digital advertising sector.
While smaller than other mega-caps, APP’s consistent performance and moderate volatility make it a safe tech stock.
19. Spotify Technology S.A. (NYSE:SPOT)
Number of Hedge Funds with 10 to 200 Positions: 36
Number of Funds with Stock as Top 10 Holding: 17
Total Hedge Fund Interest: 53
Market Capitalization: ~$135B
Five-Year Return: ~310%
Key Financials (2024): Revenue: $16.5B, Operating Margin: 8.2%, EPS: $3.45
Spotify Technology S.A. (NYSE:SPOT), a leading audio streaming platform, serves 600 million users globally.
Spotify’s 2024 subscriber growth of 15% and ad revenue increase of 20% highlight its resilience.
Its focus on podcasts and exclusive content enhances user retention.
Analysts project a 25% upside, noting SPOT’s stable cash flows in the entertainment sector.
SPOT’s moderate volatility makes it a safe choice.
18. Flutter Entertainment plc (NYSE:FLUT)
Number of Hedge Funds with 10 to 200 Positions: 37
Number of Funds with Stock as Top 10 Holding: 16
Total Hedge Fund Interest: 53
Market Capitalization: ~$40B
Five-Year Return: ~100%
Key Financials (2024): Revenue: $14.2B, Operating Margin: 16.3%, EPS: $7.12
Flutter Entertainment plc (NYSE:FLUT), a leader in online betting, operates FanDuel and Paddy Power.
Flutter’s U.S. market share grew to 40% in 2024, driving a 25% revenue increase.
Analysts forecast a 20% upside, citing its recession-resistant sector. FLUT’s stable growth and moderate volatility make it a safe stock.
17. CRH plc (NYSE:CRH)
Number of Hedge Funds with 10 to 200 Positions: 35
Number of Funds with Stock as Top 10 Holding: 20
Total Hedge Fund Interest: 55
Market Capitalization: ~$60B
Five-Year Return: ~250%
Key Financials (2024): Revenue: $35B, Operating Margin: 19.2%, EPS: $4.95
CRH plc (NYSE:CRH), a global leader in building materials, provides cement, aggregates, and asphalt.
CRH benefits from infrastructure spending in North America and Europe.
In 2024, CRH reported a 7% revenue increase, driven by U.S. infrastructure projects and acquisitions.
Its diversified portfolio and focus on sustainability enhance stability.
Analysts project a 12% upside, citing CRH’s consistent performance and low volatility in the construction sector, making it a reliable safe stock.
16. Berkshire Hathaway Inc. (NYSE:BRK.B)
Number of Hedge Funds with 10 to 200 Positions: 38
Number of Funds with Stock as Top 10 Holding: 18
Total Hedge Fund Interest: 56
Market Capitalization: ~$1.03T
Five-Year Return: ~200%
Key Financials (2024): Revenue: $364.5B, Operating Margin: 14.8%, EPS: $36.42
Berkshire Hathaway Inc. (NYSE:BRK.B), a diversified holding company led by Warren Buffett, spans insurance, railroads, and energy.
Berkshire’s 2024 operating earnings rose 10%, driven by its insurance segment.
Its $300 billion cash reserve provides stability.
Analysts forecast a 10% upside, citing BRK.B’s low volatility and diversified revenue streams.
As a mega-cap with a defensive profile, BRK.B is a quintessential safe stock.
15. Eli Lilly and Co. (NYSE:LLY)
Number of Hedge Funds with 10 to 200 Positions: 38
Number of Funds with Stock as Top 10 Holding: 18
Total Hedge Fund Interest: 56
Market Capitalization: ~$800B
Five-Year Return: ~500%
Key Financials (2024): Revenue: $34.1B, Operating Margin: 30.4%, EPS: $6.82
Eli Lilly and Co. (NYSE:LLY), a pharmaceutical leader, focuses on diabetes and oncology.
Lilly’s Mounjaro and Zepbound drugs drove a 40% revenue increase in 2024.
Its Alzheimer’s pipeline adds growth.
With a forward dividend of $5.20, analysts project a 25% upside.
LLY’s recession-resistant sector and strong growth make it a safe stock.
14. Hess Corp. (NYSE:HES)
Number of Hedge Funds with 10 to 200 Positions: 34
Number of Funds with Stock as Top 10 Holding: 25
Total Hedge Fund Interest: 59
Market Capitalization: ~$45B
Five-Year Return: ~200%
Key Financials (2024): Revenue: $10.7B, Operating Margin: 29.4%, EPS: $5.27
Hess Corp. (NYSE:HES), an oil and gas exploration company, focuses on offshore production. Hess benefits from high oil prices and its Guyana operations.
In 2024, production rose 15% year-over-year. Chevron’s pending acquisition adds stability.
Analysts forecast a 10% upside, with a forward dividend of $1.75. HES’s consistent performance makes it a safe energy stock.
13. Alibaba Group Holding Limited (NYSE:BABA)
Number of Hedge Funds with 10 to 200 Positions: 47
Number of Funds with Stock as Top 10 Holding: 17
Total Hedge Fund Interest: 64
Market Capitalization: ~$290B
Five-Year Return: ~-30% (due to regulatory challenges, but stabilizing)
Key Financials (2024): Revenue: $130.4B, Operating Margin: 14.2%, EPS: $8.54
Alibaba Group Holding Limited (NYSE:BABA), a Chinese e-commerce giant, operates platforms like Taobao and AliExpress.
Alibaba’s 2024 cloud revenue grew 20%, despite regulatory headwinds.
Its focus on AI and international expansion drives recovery.
Analysts project a 30% upside, noting BABA’s undervaluation and resilience.
While volatile in the past, BABA’s mega-cap status makes it a safer bet in 2025.
12. Mastercard Inc. (NYSE:MA)
Number of Hedge Funds with 10 to 200 Positions: 45
Number of Funds with Stock as Top 10 Holding: 20
Total Hedge Fund Interest: 65
Market Capitalization: ~$550B
Five-Year Return: ~109%
Key Financials (2024): Revenue: $25.1B, Operating Margin: 56.8%, EPS: $14.26
Mastercard Inc. (NYSE:MA), a global payments leader, facilitates transactions in over 200 countries.
Headquartered in Purchase, New York, MA’s capital-light model ensures high margins. In 2024, cross-border volume grew 18% year-over-year.
MA’s cybersecurity investments enhance its moat.
Analysts forecast a 15% upside, with a forward dividend of $2.64.
MA’s low volatility makes it a top safe stock.
11. Vistra Corp. (NYSE:VST)
Number of Hedge Funds with 10 to 200 Positions: 47
Number of Funds with Stock as Top 10 Holding: 19
Total Hedge Fund Interest: 66
Market Capitalization: ~$60B
Five-Year Return: ~700%
Key Financials (2024): Revenue: $14.8B, Operating Margin: 20.5%, EPS: $3.92
Vistra Corp. (NYSE:VST), an independent power producer, provides electricity and energy solutions.
Vistra’s 2024 acquisition of nuclear assets boosted capacity by 15%. Its focus on clean energy aligns with market trends.
Analysts project a 20% upside, citing Vistra’s stable cash flows.
VST’s growth in a defensive sector makes it a safe stock.
10. Netflix Inc. (NASDAQ:NFLX)
Number of Hedge Funds with 10 to 200 Positions: 50
Number of Funds with Stock as Top 10 Holding: 24
Total Hedge Fund Interest: 74
Market Capitalization: ~$500B
Five-Year Return: ~160%
Key Financials (2024): Revenue: $39.2B, Operating Margin: 22.1%, EPS: $14.23
Netflix Inc. (NASDAQ:NFLX), a streaming leader, offers films and series to 300 million users.
In 2024, it added 8 million subscribers, with ad-tier growth of 70%.
Analysts forecast a 15% upside, citing stable cash flows.
NFLX’s resilience in the entertainment sector makes it a safe stock.
9. Visa Inc. (NYSE:V)
Number of Hedge Funds with 10 to 200 Positions: 55
Number of Funds with Stock as Top 10 Holding: 20
Total Hedge Fund Interest: 75
Market Capitalization: ~$650B
Five-Year Return: ~100%
Key Financials (2024): Revenue: $32.7B, Operating Margin: 67.2%, EPS: $8.95
Visa Inc. (NYSE:V), a payments technology leader, operates in over 200 countries.
Its capital-light model generates high margins.
In 2024, cross-border transactions rose 15%, with $12 billion invested in security.
Analysts project a 10% upside, with a forward dividend of $2.36.
Visa’s low volatility makes it a dependable safe stock.