In this article, we will take a look at the most profitable mega cap stocks to buy.
In any economy, mega-cap or the largest companies act as the backbone of financial markets due to their strong fundamentals and dominant market positions. Small-cap stocks typically don’t offer what mega-cap stocks do—stable earnings, robust cash flow, and long-term resilience.
A report published by FactSet Insight on January 13, titled “2026 Outlook: Converging Forces Shaping Earnings, Capital Markets, Technology, and Global Policy,” highlights that the S&P 500 is expected to post double-digit earnings growth for the third consecutive year in CY26.
What’s interesting is that among the top 5 contributors to this growth, only two are “Magnificent 7” companies, with the remaining 493 companies forecasted to report earnings growth of 12.5% for the current year, the publication noted. That said, sectors projected to achieve double-digit growth include Information Technology, Materials, Industrials, Communication Services, and Consumer Discretionary.
If we consider profit margins, the forecasted net profit margin for the S&P 500 for this year is 13.9%, which is 2.9% higher than the 10-year average (annual) net profit margin of 11%. If this is achieved, it will be the peak (annual) net profit margin marked by the index since FactSet started tracking it in 2008.
With this backdrop, we have compiled a list of the most profitable mega cap stocks to buy. These stocks belong to a range of sectors, including communication services, technology, and financial services.
Image by MayoFi from Pixabay
Our Methodology
To compile our list of the 10 most profitable mega cap stocks to buy, we used the Stock Analysis screener to filter for mega cap stocks (over $200 billion in market cap) that reported operating and net profit margins over 20%. From this pool, we shortlisted the top 10 stocks with the highest trailing twelve-month (TTM) net income. These are then ranked in ascending order by net income. We also included data on hedge fund holdings in these companies based on Insider Monkey’s database, as of Q3 2025.
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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
10. Broadcom Inc. (NASDAQ:AVGO)
Net Income (TTM): $23.13 billion
Operating Margin (TTM): 31.76%
Number of Hedge Fund holdings: 183
On February 6, Cathie Wood’s ARK ETF posted the daily trades for the day, outlining a significant purchase of Broadcom Inc. (NASDAQ:AVGO) shares. Through the acquisition of 87,148 shares, ARK invested around $27 million in the company.
A day prior to this, Jefferies maintained its Buy rating and $500 price target on Broadcom Inc. (NASDAQ:AVGO), which translates to an upside potential of approximately 45%. The firm highlighted the company’s solid footing in the AI and networking space. While responding to concerns related to the company’s custom on-package (COT) business, Jefferies noted that Broadcom is “well ahead” of MediaTek on v8 chips, adding that the company will sustain this advantage with v9 chips in timing and capabilities.
According to the firm’s bottom-up model, Google will achieve 6 million total units in CY27, with 85-90% of that business tied to Broadcom Inc. (NASDAQ:AVGO). Jefferies believes that there is “room for that overall number to move up further.”
Broadcom Inc. (NASDAQ:AVGO), headquartered in Palo Alto, California, is a developer and supplier of semiconductor devices and infrastructure software solutions. Founded in 1961, the company operates in two segments: Semiconductor Solutions and Infrastructure Software.
9. Johnson & Johnson (NYSE:JNJ)
Net Income (TTM): $26.8 billion
Operating Margin (TTM): 22.99%
Number of Hedge Fund holdings: 103
On February 6, Johnson & Johnson (NYSE:JNJ) disclosed 12-month pilot-phase data from the OMNY-AF study, which examined the investigational OMNYPULSE Platform for the treatment of symptomatic paroxysmal atrial fibrillation (AFib). Announced during the 31st Annual AF Symposium in Boston, the results reveal that investigators achieved 100% acute procedural success with zero adverse events linked to the procedure.
As stated by Dinesh Sharma, M.D., Section Head of Cardiac Electrophysiology at the Naples Heart Institute,
“The 12-month data provide encouraging early evidence on the OMNY-AF study with promising safety outcomes – no procedure-related adverse events or MRI-detected cerebral lesions – across eight centers in the pilot phase.”
Earlier on February 3, RBC Capital increased the price target on Johnson & Johnson (NYSE:JNJ) to $255 from $240 and reiterated an Outperform rating following investor questions about the Daubert decision related to talc litigation and how it will impact the company financially.
According to the firm’s analysis, Johnson & Johnson (NYSE:JNJ) is unlikely to overturn the key consequences of the Daubert ruling, but the case may continue for years. Despite this, the firm remains confident in the healthcare giant’s financial position, given its strong performance, which helps reduce risk.
Johnson & Johnson (NYSE:JNJ) is a global healthcare company focused on innovative medicines and medical technologies. Headquartered in New Jersey, the company serves a wide clientele, including retailers, wholesalers, healthcare professionals, and hospitals.
