In this article, we discuss the 10 Best Defensive Stocks to Buy According to Steve Cohen.
Is it time to rebalance investment portfolios on equity valuations soaring with the S&P 500 powering through the 6,500 level? That’s the big question as uncertainty in the US economy hits hard amid an expected surge in volatility heading into year-end.
“Even as the S&P 500 Index makes new all-time highs, investors may want to trim equity allocations to position portfolios ahead of the volatility we expect in the coming weeks and months,” Paul Christopher, head of global investment strategy at Wells Fargo, said.
According to Christopher, volatility in the equity markets could come amid policy and economic surprises. Donald Trump’s erratic economic policies, including massive and unpredictable taxes, have weighed significantly on the economy and the stock market’s outlook.
Steve Cohen, the billionaire investor behind one of the largest hedge funds on Wall Street, Point 72 Asset Management, shares similar sentiments. The fact that the market is in the headlines, according to the legendary investor, should worry investors.
“We’re all somewhat headline-driven right now, which is a hard way to run money.” He’s cautious. “We expect slowing growth… even in ’26; we only expect growth in, say, the 1.5% range… I’m somewhat concerned on a short-term basis.”
According to Cohen, there are prospects for the markets to retest their April lows following the dramatic comeback. Cohen insists there is also a significant risk of the US economy plunging into recession, even though the tariff threat has subsided.
“We’re not a recession yet…. We think it would probably be like a 45% chance of recession,” Cohen said. “So that’s not insignificant, even if it’s not the definition of recession, it’s definitely slow growth. And so I think it’s almost unavoidable when you add up the tariffs, you add up the 10% rate, sectorial tariffs, and whatever happens with China.”
When the market becomes turbulent, it’s common for investors to move from high-volatility stocks into defensive plays. Defensive stocks are companies known to weather volatility, recession, or even policy and geopolitical uncertainties.
With that in mind, let’s take a look at some of the top defensive plays that Cohen is betting on amid the wave of uncertainties.
Steven Cohen of Point72 Asset Management
Our Methodology
To compile our list of the best defensive stocks to buy, according to Steve Cohen, we analyzed Point72 Asset Management’s portfolio. We highlighted the hedge fund’s top defensive strategies, investments designed to remain resilient amid market turbulence and economic uncertainty. We also provided insights on why they stand out and how popular they are among elite hedge funds (as of Q2 2025). Finally, we ranked the stocks from lowest to highest based on the value of Point72 Asset Management’s equity stakes.
Why are we interested in the stocks that hedge funds pile into? The reason is straightforward: our research has demonstrated that we can outperform the market by replicating 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).
Best Defensive Stocks to Buy According to Steve Cohen
10. Novartis AG (NYSE:NVS)
Point72 Asset Management Equity Stake: $90.35 Million
Number of Hedge Fund Holders: 34
Novartis AG (NYSE:NVS) is one of the best defensive stocks to buy, according to Steve Cohen. On September 9, the company confirmed plans to acquire the New York-based pharmaceutical company Tourmaline Bio for $1.4 billion on a fully diluted basis.
The acquisition paves the way for the company to gain access to pacibekitug, a candidate drug being developed to address systemic inflammation and as a treatment for atherosclerotic cardiovascular disease. The drug is currently in Phase III trials and expected to strengthen its cardiovascular disease portfolio.
The deal is expected to close in the fourth quarter with Tourmaline becoming an indirect wholly-owned subsidiary.
“With no widely adopted anti-inflammatory therapies currently available for cardiovascular risk reduction, pacibekitug represents a potential breakthrough in addressing residual inflammatory risk in ASCVD with a differentiated mechanism of action targeting IL-6,” said Shreeram Aradhye, President, Development and Chief Medical Officer, Novartis.
Novartis AG (NYSE:NVS) is a global healthcare company that focuses on researching, developing, and manufacturing innovative medicines to address significant diseases and improve people’s lives. The company’s core therapeutic areas include cardiovascular, renal and metabolic diseases, oncology, immunology, and neurology.
9. UnitedHealth Group Incorporated (NYSE:UNH)
Point72 Asset Management Equity Stake: $96.51 Million
Number of Hedge Fund Holders: 159
UnitedHealth Group Incorporated (NYSE:UNH) is one of the best defensive stocks to buy, according to Steve Cohen. On September 10, Bernstein SocGen Group reiterated an Outperform rating on the stock and a $379 price target.
The positive stance stems from the company signaling stability in its medical benefits business, with solid preliminary 2026 Medicare Advantage Stars results. Initial results in an 8-K filing indicate that approximately 78% of Medicare Advantage members will be in 4-star or higher plans next year.
In addition, the research firm has echoed UnitedHealth’s reaffirmation of its 2025 adjusted earnings per share guidance, despite facing significant headwinds this year. Initially, there were concerns of potential guidance cuts under the new CEO.
UnitedHealth Group Incorporated (NYSE:UNH) is a healthcare company that offers consumer-oriented health benefit plans and services. It also provides care delivery, care management, wellness, consumer engagement, and health financial services to patients.
