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.
8. Keurig Dr Pepper Inc. (NASDAQ:KDP)
Point72 Asset Management Equity Stake: $116.96 Million
Number of Hedge Fund Holders: 46
Keurig Dr Pepper Inc. (NASDAQ:KDP) is one of the best defensive stocks to buy, according to Steve Cohen. On August 25, the company announced it had reached an agreement to acquire Dutch coffee and tea company JDE Peet’s.
The $18 billion deal is expected to be part of the company’s push to bolster its struggling US Coffee business. In the second quarter, revenue in the coffee business decreased 0.2% to $900 million, primarily due to a decline in shipments of single-serve coffee pods.
With the acquisition, Keurig Dr Pepper is well-positioned to create a global coffee champion through the combination of its North America’s leading single-serve platform with JDE Peet’s portfolio of coffee brands. The acquisition is also expected to create a resilient and diversified global portfolio, in addition to $400 million in expected cost synergies over the next three years.
“Through the complementary combination of Keurig and JDE Peet’s, we are seizing an exceptional opportunity to create a global coffee giant. This is the right time for this transaction, with KDP in a position of operational and financial strength, momentum across our evolving portfolio, and increasing resilience in the coffee category. By creating two sharply focused beverage companies with attractive and tailored growth propositions and capital allocation strategies, we are poised to generate significant shareholder value in both the near and long term,” said Tim Cofer, CEO of KDP.
Keurig Dr Pepper Inc. (NASDAQ:KDP) is a beverage company that manufactures and distributes a wide array of non-alcoholic drinks, including coffee, soft drinks, teas, water, and juice. Through its combined Keurig and Dr Pepper businesses, KDP offers a range of beverages, including both hot and cold options.
7. AstraZeneca PLC (NASDAQ:AZN)
Point72 Asset Management Equity Stake: $117.79 Million
Number of Hedge Fund Holders: 48
AstraZeneca PLC (NASDAQ:AZN) is one of the best defensive stocks to buy, according to Steve Cohen. On September 7, the company announced positive clinical trial results involving Tagrisso in combination with pemetrexed and platinum-based chemotherapy.
The trial results showed that the combination extended the lives of some lung cancer patients by a median of 47.5 months. It is the longest survival benefit ever recorded in a late-stage study of the condition.
“The latest FLAURA2 trial results set a new survival standard for patients, with Tagrisso plus chemotherapy demonstrating a median overall survival of nearly four years in first-line advanced EGFR-mutated lung cancer, surpassing the three-year benchmark established in the FLAURA trial,” said AstraZeneca oncology haematology research and development executive vice-president Susan Galbraith.
The safety profile of the combination under trial remained consistent and manageable over longer follow-up periods. Therefore, it aligns with the known profiles of the individual medicines. Tagrisso is AstraZeneca’s top-selling cancer drug. While the drug generated $6.6 billion in 2024, the company is exploring its benefits when combined with other cancer treatments.
AstraZeneca PLC (NASDAQ:AZN) is a global biopharmaceutical company dedicated to discovering, developing, and marketing innovative medicines for the treatment of various diseases. It focuses on treatment in areas such as oncology, cardiovascular, renal, and metabolic diseases, as well as rare diseases.
6. The Procter & Gamble Company (NYSE:PG)
Point72 Asset Management Equity Stake: $120.45 Million
Number of Hedge Fund Holders: 88
The Procter & Gamble Company (NYSE:PG) is one of the best defensive stocks to buy, according to Steve Cohen. On September 4, at the Barclays 18th Annual Global Consumer Staples Conference 2025, the company reiterated its commitment to leveraging innovation and efficiency to drive future growth.
As the global market growth is expected to stabilize between 2% and 2.5% below the long-term average of between 3% and 4%, P&G remains committed to innovation across all price tiers to offset the slow growth. It also plans to pursue organization restructuring, focusing on optimizing value chains and improving productivity through technology.
Having registered significant growth over the past seven years, the consumer goods company is considering a mid-to-single-digit price increase on 25% of its US portfolio in response to the tariff headwinds.
The Procter & Gamble Company (NYSE:PG) is a global consumer goods company that creates and markets a wide range of trusted, high-quality brands for consumers worldwide, including well-known names in fabric care, such as Tide, baby care, like Pampers, and personal health products, like Oral-B and Gillette.
5. Eli Lilly and Company (NYSE:LLY)
Point72 Asset Management Equity Stake: $146.95 Million
Number of Hedge Fund Holders: 119
Eli Lilly and Co. (NYSE:LLY) is one of the best defensive stocks to buy, according to Steve Cohen. On September 9, the company announced the launch of an artificial intelligence and machine learning platform.
TuneLab is the platform that consists of AI models and proprietary data obtained at a cost of more than $1 billion. The platform is designed to provide biotech companies with all the necessary models trained on years of research data to accelerate drug development.
“Lilly TuneLab was created to be an equalizer so that smaller companies can access some of the same AI capabilities used every day by Lilly scientists,” said chief scientific officer Daniel Skovronsky.
The platform is already attracting interest, with Circle Pharma confirming that it will use it to develop cancer therapies, and Insitro leveraging it to build new AI models for the discovery of small-molecule therapies.
Eli Lilly and Company (NYSE:LLY) is a pharmaceutical company that focuses on discovering, developing, and manufacturing innovative pharmaceuticals to improve people’s health and lives. It produces medicines for conditions such as diabetes, obesity, and cardiovascular disease.
4. Chewy Inc. (NYSE:CHWY)
Point72 Asset Management Equity Stake: $176.74 Million
Number of Hedge Fund Holders: 58
Chewy Inc. (NYSE:CHWY) is one of the best defensive stocks to buy, according to Steve Cohen. On September 10, the company delivered solid second-quarter results characterized by sales coming in at the high end of the guidance range.
The company reported net sales of $3.1 billion, representing an 8.6% year-over-year increase, as gross margins improved by 90 basis points to 30.4%. Adjusted net income increased by $36.4 million year over year to $141 million, leading to adjusted earnings per share of $0.34, an increase of $0.10 year over year.
“Chewy’s differentiated value proposition was once again on display, with both active customers and share of wallet (NSPAC) growing 4.5% year over year to reach nearly 21 million customers and $591, respectively,” said Sumit Singh, CEO of Chewy.
Chewy Inc. (NYSE:CHWY) is an e-commerce company that sells pet products, supplies, and prescription medications online. It offers a wide selection of products, including pet food, toys, and healthcare items, along with services such as a pharmacy, insurance, and a vet telehealth option.
3. The Coca-Cola Company (NYSE:KO)
Point72 Asset Management Equity Stake: $243.86 Million
Number of Hedge Fund Holders: 84
The Coca-Cola Company (NYSE:KO) is one of the best defensive stocks to buy, according to Steve Cohen. On September 3 at the Barclays 18th Annual Global Consumer Staples Conference 2025, the company reiterated plans to focus on innovation and digital transformation.
The beverage giant is prioritizing digital transformation as it looks to bolster its competitive edge in the industry. Consequently, it will leverage its franchise model and digital technologies to enhance brand awareness. It also plans to leverage technology, data, and artificial intelligence to improve consumer experiences. The push is part of an effort to bolster customer engagement, drive sales, and enhance operational efficiency.
Additionally, the company reiterated its commitment to pursuing growth opportunities in emerging markets. Its long-term plan is to boost its commercial beverage market share by 0.5 points in the developing regions. Coca-Cola is also planning significant investments in capital expenditures as it looks to secure long-term growth.
The Coca-Cola Company (NYSE:KO) manufactures and sells beverages, including its signature Coca-Cola soft drink, along with a wide range of other drinks like water, juices, coffees, teas, and alcohol-based beverages. The company operates a system of local bottlers that produce and distribute finished products from its concentrates and syrups to consumers.
2. Boston Scientific Corporation (NYSE:BSX)
Point72 Asset Management Equity Stake: $264.30 Million
Number of Hedge Fund Holders: 100
Boston Scientific Corporation (NYSE:BSX) is one of the best defensive stocks to buy, according to Steve Cohen. On September 8, analysts at Oppenheimer upgraded the stock to an ‘Outperform’ from Perform and reiterated a $125 price target.
The upgrade comes as Oppenheimer views the company as one of the best large-cap MedTech growth stories owing to a robust merger and acquisition strategy. The company has delivered a strong performance, with 21.44% revenue growth over the past 12 months.
In addition, the research firm has echoed the company’s projected 11%-13% compound annual growth rate outlook. It is a positive attribute for a highly diversified company in the healthcare sector. Its competitive edge was the catalyst behind a 17% organic revenue growth in the second quarter of 2025 as earnings per share increased 23%.
Boston Scientific Corporation (NYSE:BSX) is a global medical technology company that develops and manufactures innovative devices and solutions to diagnose and treat a wide range of complex medical conditions, including cardiovascular, respiratory, digestive, neurological, and urological diseases.
1. Biogen Inc. (NASDAQ:BIIB)
Point72 Asset Management Equity Stake: $481.23 Million
Number of Hedge Fund Holders: 55
Biogen Inc. (NASDAQ:BIIB) is one of the best defensive stocks to buy, according to Steve Cohen. On September 5, H.C. Wainwright reiterated a ‘Buy’ rating on the stock and a $194 price target. The positive stance echoes the research firm’s confidence about the company’s promising lupus franchise.
According to H.C. Wainwright, the lupus treatments litifilimab and dapirolizumab pegol are compelling late-stage assets that underscore the company’s long-term prospects. That’s because they have minimal direct competition in their respective mechanisms of action. Dapirolizumab pegol has already achieved positive Phase 3 results and is progressing into a confirmatory trial (PHOENYCS-FLY), expected to be completed in 2027 or early 2028.
Even as Biogen makes progress on the lupus treatment, it has already submitted a new Alzheimer’s treatment, LEQEMBI IQLIK, to the US Food and Drug Administration. The drug has already been granted fast-track status.
Biogen Inc. (NASDAQ:BIIB) is a global biotechnology company that pioneers innovative science to develop and deliver therapies for complex and devastating diseases, particularly in neurology, neuropsychiatry, specialized immunology, and rare diseases. The company is known for creating first-in-class treatments, including breakthrough medicines for multiple sclerosis (MS).
While we acknowledge the potential of BIIB to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than BIIB and that has 100x upside potential, check out our report about this cheapest AI stock.
READ NEXT: 11 Best Wind Power and Solar Stocks to Buy According to Analysts and 10 Best Robinhood Penny Stocks to Invest In.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email below.
Hedge Fund Resource Center