In this article, we will discuss the 10 Best Stocks to Buy Now for Good Returns.
The artificial intelligence trade is showing signs of fatigue after three years of blockbuster gains. Strategists at UBS note that hedge funds are increasingly cutting their exposure to AI stocks following meetings with clients across the US and Europe. While the market still believes in the AI story over the long term, tactical conviction is eroding at the margin.
According to UBS, hedge funds are rotating quickly as the search for the next trade gets underway. The focus is now on new areas as US economic growth accelerates, as reflected in major plays in US cyclical sectors such as industrials and financials.
“We’re seeing a normal rotation out of some areas that may be a little overbought, a little overheated for the time being,” said Eric Marshall, president of the Dallas-based mutual-fund firm Hodges Capital. “Even though you don’t at this point see an end in demand for a lot of AI optical switch gear or memory- or compute-, you know that trees don’t grow to the sky.”
On its part Berkshire Hathaway has been a net seller of equities for than a dozen quarters in a row. The Warren Buffett investment holding company has parted with well over $150 billion more in equities than it has bought since late 2022. In the first quarter, it sold $8 billion more stock than it bought.
“We’ve never had people in a more gambling mood than now,” Buffet said at Berkshire’s annual meeting in May, pointing to investors paying up for stocks and piling into short-term options and prediction markets.
Amid concerns about AI trade, Warren Buffett still boasts exposure to solid investment plays he believes are well-positioned to deliver strong returns over the long term.
With that in mind, let’s take a look at some of the best stocks to buy now for good returns.
Our Methodology
To curate the list of 10 Best Stocks to Buy Now for Good Returns, we summarized our research on the performance of Warren Buffett’s top 12 stock picks in Q1 2026 and identified those best suited for inclusion. We further focused on stocks with noteworthy positive developments and boast of significant hedge fund holdings. Finally, the stocks are presented in ascending order of hedge fund sentiment in Q1 2026.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research shows we can outperform the market by imitating the top stock picks of the best hedge funds. Insider Monkey’s quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
Best Stocks to Buy Now for Good Returns
10. The Kroger Co. (NYSE:KR)
Number of Hedge Fund Holders: 52
Berkshire Hathaway Stakes: $3.62 Billion
The Kroger Co. (NYSE:KR) is one of the best stocks to buy now for good returns. On June 22, Morgan Stanley reiterated an Equal Weight rating on the stock but cut the price target to $67 from $73 a share. The Kroger Co. (NYSE:KR) is currently trading at $58 a share.
The investment bank terms the strategy of self-funding price investments to drive market share as prudent, given CEO Greg Foran’s track record of supporting execution. However, Morgan Stanley insists that a self-funding price investment strategy comes with its degree of difficulty.
Similarly, on June 22, UBS reiterated a Neutral rating on the stock and cut the price target to $63 from $70. According to UBS, the first-quarter results showed that Kroger Co. has the right plan to strengthen its competitive edge. For starters, the company is well-positioned to fund necessary investments from its savings.
However, the research firm cut its price target amid concerns that Kroger may not have what it takes to deliver long-term targets of 3% to 5% operating income growth and high-digit to low-double-digit shareholder returns.
The Kroger Co. (NYSE:KR) is one of the world’s largest food retailers, operating nearly 2,800 grocery stores and multi-department stores across 35 U.S. states. The company serves over 11 million customers daily, offering a massive footprint in grocery, pharmacy, manufacturing, and fuel services.
9. Chubb Limited (NYSE:CB)
Number of Hedge Fund Holders: 59
Berkshire Hathaway Stakes: $11.16 Billion
Chubb Limited (NYSE:CB) is one of the best stocks to buy now for good returns. On June 12, Barclays reiterated an Equal Weight rating on Chubb Limited (NYSE:CB) and lowered the price target to $368 from $375. The new price target represents significant upside potential as the stock is trading at about $335 a share.
The price target cut comes amid concerns that the company will feel the full brunt of pricing softening and margin pressure. According to Barclays, earnings upside in the property and casualty insurance space is becoming increasingly difficult. Companies in the sector have to pull back on growth initiatives amid weakening pricing to defend underwriting margins.
Earlier on May 26, Piper Sandler reiterated a Neutral rating on the stock and increased the price target to $340 from $328. The price target hike was in response to the stock’s strong performance and the forward-looking nature of the roll. It also reiterated the neutral rating, impressed by the first-quarter results, and touted organic growth prospects in the sector.
Chubb Limited (NYSE:CB) is a global insurance company. It provides a wide variety of insurance and reinsurance products, including commercial and personal property and casualty (P&C) insurance, life insurance, and supplemental health and accident coverage for individuals and businesses of all sizes.
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