In this article, we will take a detailed look at 10 Most Profitable Large Cap Stocks to Buy Now.
The most profitable large-cap stocks, in terms of absolute net profit, are typically concentrated in industries with relatively high barriers to entry and substantial global demand. These include sectors like technology, healthcare, energy and consumer goods, where leaders can benefit from strong market positions, innovation and economies of scale. Furthermore, strong profitability usually translates very well into cash flow, which gives a lot of flexibility with capital allocation – the companies can either reinvest in growth during favorable times or support the stock price through repurchases when the market is less favorable. Consequently, the advantages of investing in such companies include stability, the potential for consistent revenue growth, and resilience during economic downturns.
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In the last decade, the most profitable large cap stocks have mostly clustered in the technology sector, leveraging such factors as the giant global total addressable market and wide margins allowed by the technological advantage. Furthermore, some of these companies took the center of the stage during 2023-2024, a time when the AI megatrend opened a new growth frontier and led to rising stock market concentration; in other words, the most profitable companies became even more profitable. This trend has resulted in a widening gap between the leading tech giants and other sectors, as investors increasingly flock to these high-growth stocks, anticipating continued dominance and innovation.
However, besides technology, there are some business models that also allow for strong profitability and cash flow. First, there are energy leaders who are literal cash cows and generate tens of billions of dollars annually from energy operations, which are vital to the world economy and are unlikely to be disrupted anytime soon. Second, there is the financial sector, and particularly banks, which are considered the blood of the world economy – by intermediating operations worth trillions of dollars annually, the leading banks can capture a tiny share of those transactions, which overall results in giant amounts of net profit. Last but not least, some of the most profitable companies in the world can be found even in more competitive sectors like consumer discretionary.
We believe that the most profitable companies can enter the spotlight again at a time when the US and global economy are at an important crossroads. Not only are these companies immune to tariffs and less sensitive to macroeconomic conditions, interest rates, and consumer health, but they also generate tens of billions of dollars in free cash flow every year, which gives them flexibility to adjust to a new regime. Investor sentiment has shifted to a pronounced bearish, as the US stock market officially entered correction mode, with more than a 10% contraction since the February peak. It appears that the fears of Trump tariffs staying for the long-term, as well as the negative impact on GDP growth from major cuts in public funding, are finally hitting the markets. Going forward, as smaller-cap stocks are pressured by uncertainty and deteriorating consumer confidence, profitable large caps can become safe havens and attract capital. The key takeaway for investors is that if one wants to stay invested in the US equity market amid the current turbulent times, they’re better off sticking to the widest moat and most profitable names out there.
An analyst studying a graph of a company’s asset value and potential cash flow.
Our Methodology
To compile our list of most profitable large cap stocks, we searched for the publicly traded companies with the largest amount of net income generated in the latest financial year and ranked them accordingly. For each company we also include the number of hedge funds that own the stock, according to Insider Monkey’s database of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating 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).
10. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 339
Last year net income: $30.43 billion
Amazon.com, Inc. (NASDAQ:AMZN) is a global technology and e-commerce company that operates through online retail, cloud computing, digital streaming, and artificial intelligence. Its e-commerce platform offers a vast selection of products, while Amazon Web Services (AWS) provides cloud computing solutions for businesses and governments. The company also develops consumer electronics, including Kindle, Echo, and Fire TV, and offers digital services like Prime Video and Alexa. Amazon operates globally, serving millions of customers through its logistics network, third-party marketplace, and subscription services.
Amazon.com, Inc. (NASDAQ:AMZN) reported Q4 2024 revenue growth of 10% YoY, with operating income reaching $21.2 billion, up 61% YoY. The company’s North America segment achieved 10% revenue growth while the International segment saw 9% growth excluding foreign exchange impacts. AWS demonstrated strong performance with 19% YoY growth, reaching a $115 billion annualized revenue run rate. The company’s focus on expanding selection, lowering prices, and improving convenience drove strong unit growth that outpaced revenue growth. Third-party sellers contributed significantly, making up 61% of items sold in 2024, marking the highest annual mix of third-party seller units ever. AMZN expanded same-day delivery sites by more than 60% in 2024, now serving over 140 metro areas, and delivered over 9 billion units same or next day worldwide.
In advertising, Amazon.com, Inc. (NASDAQ:AMZN) generated $17.3 billion of revenue in the quarter, growing 18% YoY, reaching a $69 billion annual revenue run rate – more than double from $29 billion just 4 years ago. The company has made significant strides in AI implementation, with approximately 1,000 different generative AI applications either built or in the process of building. Looking ahead to 2025, management plans to continue reducing costs through better inventory placement, expanding same-day delivery network, and accelerating robotics and automation throughout the network. With strong profitability and guidance in place, AMZN is one of the most profitable large cap stocks to buy now.
9. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 223
Last year net income: $32.31 billion
NVIDIA Corporation (NASDAQ:NVDA) is a technology company specializing in GPUs, AI, and high-performance computing. Its GPUs are widely used in gaming, data centers, professional visualization, and autonomous vehicles. NVDA’s AI and deep learning technologies power applications in cloud computing, scientific research, and enterprise solutions. The company also develops system-on-chip (SoC) solutions for automotive and robotics industries. The company operates globally, supplying hardware and software solutions to industries that require advanced computing and AI capabilities. The California-based company ranked second on our recent list of 10 Hot AI Stocks to Buy Now.
NVIDIA Corporation (NASDAQ:NVDA) demonstrated strong performance with 18% sequential growth in data center revenue, driven by robust demand for their Hopper architecture. The company successfully launched Blackwell with significant initial revenue of $11 billion in Q4, despite facing supply chain complexities. NVDA’s networking business is positioned for growth in both InfiniBand and Ethernet segments, with a current run rate of approximately $2 billion in bookings. Regarding competition concerns, NVDA maintains that custom silicon development remains challenging, with many designs failing to reach market or requiring significant revisions.
NVIDIA Corporation (NASDAQ:NVDA)’s software and services strategy is evolving, with NVIDIA AIE and NIMs being crucial components for enterprise customers. On the financial front, while gross margins are temporarily impacted by supply chain expediting costs, the company expects to return to mid-70s margins in the second half of the year. Looking ahead, management sees significant growth potential in the AI market, emphasizing that there is still substantial opportunity with a $1 trillion installed base of general-purpose computing that needs transformation to accelerated computing. With more than $32 billion net profit in the latest fiscal year, NVDA is one of the most profitable large cap stocks to buy now.
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