On Monday, European stock markets went up as investors waited for several new trade deal announcements from the White House.
The Stoxx Europe 600 index closed 0.4% higher. France’s CAC 40 rose 0.4% while Germany’s DAX increased by 1.1%. However, the UK’s FTSE 100 was the only major index to fall as it dropped 0.2%.
US Treasury Secretary Scott Bessent said on CNBC’s “Squawk Box” that several trade announcements would come in the next 48 hours, but he did not say which countries would be involved.
The lack of details about which countries are involved and which companies will be impacted as a result of the new trade deal announcements reflects ongoing uncertainty. It seems that European stock markets are cautiously optimistic as they wait for new trade deal announcements from the White House.
With this background in mind, let’s take a look at the 11 best foreign stocks to buy according to hedge funds.
A financial adviser looking over a portfolio of securities and stocks.
Our Methodology
To compile our list of the 11 best foreign stocks to buy according to hedge funds, we used the Finviz stock screener. We sorted our results based on market capitalization and picked the top 40 foreign stocks. Next, we focused on the top 11 stocks most favored by institutional investors. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s Q1 2025 database of 1,000 elite hedge funds. Finally, the 11 best foreign stocks to buy were ranked in ascending order based on the number of hedge funds holding stakes in them as of Q1 2025.
Why do we care about what hedge funds do? 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).
11 Best Foreign Stocks to Buy According to Hedge Funds
11. Novo Nordisk A/S (NYSE:NVO)
Number of Hedge Fund Holders: 60
Novo Nordisk A/S (NYSE:NVO) is one of the 11 Best Foreign Stocks to Buy According to Hedge Funds. On June 18, TD Cowen maintained its “Buy” rating on Novo Nordisk A/S (NYSE:NVO) with a price target of $105. This decision came after meetings with the company’s senior leaders in Copenhagen, Denmark.
The research firm pointed out that management feels “encouraged” by volumes of Wegovy, Novo Nordisk’s (NYSE:NVO) weight loss drug, through the NovoCare program that helps patients get access to medications.
TD Cowen analysts also suggested that the REDEFINE 1 trial might have had some issues because it included a high proportion of male participants and had a short duration. Novo Nordisk A/S (NYSE:NVO) is addressing these concerns in its new Phase III trials for CagriSema.
The firm noted that Novo Nordisk A/S (NYSE:NVO) is fully committed to developing Cagrilintide monotherapy. Additionally, the EVOKE trials for Alzheimer’s disease now include time-to-progression endpoints.
Novo Nordisk A/S (NYSE:NVO) is a Danish multinational pharmaceutical company that has leading positions in diabetes care, obesity care, haemophilia care, and therapies for rare endocrine disorders.
10. Medtronic plc (NYSE:MDT)
Number of Hedge Fund Holders: 63
Medtronic plc (NYSE:MDT) is one of the 11 Best Foreign Stocks to Buy According to Hedge Funds. On June 6, Needham analysts reiterated a “Hold” rating on Medtronic plc (NYSE:MDT). This decision came after the company announced its plans to spin off its Diabetes business into a separate public company.
The analysts believe this split could be good for both Medtronic plc (NYSE:MDT) and the new Diabetes business.
Needham analysts conducted a sum-of-parts analysis, looking at Medtronic plc (NYSE:MDT) without the Diabetes business and the Diabetes business as a separate entity. The firm’s base case scenario suggests that the combined value of the two companies would be about $93 per current Medtronic plc (NYSE:MDT) share.
The analysts believe that while the spin-off might not unlock significant value right away, it has the potential to improve shareholder value in the long term.
This strategic move by Medtronic plc (NYSE:MDT) is seen as a way to improve its business structure. The company is looking to focus on its core operations and boost overall performance.
Medtronic plc (NYSE:MDT) is one of the largest medical device companies in the world. The company is headquartered in Galway, Ireland, and its technologies and therapies include cardiac devices, surgical robotics, insulin pumps, surgical tools, and patient monitoring systems.
9. Accenture plc (NYSE:ACN)
Number of Hedge Fund Holders: 69
Accenture plc (NYSE:ACN) is one of the 11 Best Foreign Stocks to Buy According to Hedge Funds. On July 1, Accenture plc (NYSE:ACN) reported that it has acquired SYSTEMA, a company that is headquartered in Dresden, Germany, and provides software solutions and consulting services for manufacturing automation.
SYSTEMA has a lot of experience working with semiconductor manufacturers and other high-tech companies. This experience will help Accenture plc (NYSE:ACN) better support its clients in these industries.
SYSTEMA specializes in digitally connecting both current and legacy production equipment and systems. The company’s expertise also includes upgrading and extending traditional manufacturing execution systems (MES) with data analytics and optimization capabilities. These capabilities help increase output and optimize costs.
Christina Raab, market unit lead for Accenture plc (NYSE:ACN) in Austria, Switzerland, and Germany, pointed out that making semiconductors is complicated and highly specialized. She noted that SYSTEMA’s expertise will help Accenture plc (NYSE:ACN) grow its business and its capabilities in ways the company could not have done on its own.
Headquartered in Dublin, Ireland, Accenture plc (NYSE:ACN) is a leading global professional services company that specializes in information technology (IT) services and management consulting.
8. Linde plc (NASDAQ:LIN)
Number of Hedge Fund Holders: 75
Linde plc (NASDAQ:LIN) is one of the 11 Best Foreign Stocks to Buy According to Hedge Funds. On June 30, Citi upgraded its rating on Linde plc (NASDAQ:LIN) from “Neutral” to “Buy” and raised its price target from $500 to $535. The research firm highlighted the company’s strong execution on price and productivity, along with a large backlog of clean-energy projects, as reasons to expect continued margin growth even if demand remains patchy.
Citi analysts forecast that Linde plc’s (NASDAQ:LIN) EBITDA margin will exceed 40% by 2026 and they raised their EBITDA estimates to $13.3 billion for 2025 and $14.5 billion for 2026.
In the March quarter, Linde plc’s (NASDAQ:LIN) operating margin improved by about 120 basis points year-over-year even with flat sales volumes. Citi expects this trend to continue as the company focuses on price increases, cost control, and leveraging its high-quality project backlog.
The company’s management has visibility on $8 to $10 billion in capital spending related to energy‑transition projects like low‑carbon hydrogen and ammonia.
The research firm now prefers Linde plc (NASDAQ:LIN) over its rival Air Products and Chemicals, which the firm views as having greater risk due to capital-intensive megaprojects and offtake agreements.
Citi values Linde plc (NASDAQ:LIN) at about 19 times its forecasted fiscal 2026 EBITDA. The analysts believe that the premium is justified because of the company’s project discipline, strong balance sheet, and possible early‑cycle gains when manufacturing activity rebounds.
Linde plc (NASDAQ:LIN) is a leading global industrial gases and engineering company that is headquartered in Woking, United Kingdom, and registered in Ireland. It serves a range of end markets like chemicals and energy, food and beverages, electronics, healthcare, manufacturing, metals, and mining.
7. Shopify Inc. (NASDAQ:SHOP)
Number of Hedge Fund Holders: 77
Shopify Inc. (NASDAQ:SHOP) is one of the 11 Best Foreign Stocks to Buy According to Hedge Funds. On June 19, Rockcliffe Capital initiated coverage on Shopify Inc. (NASDAQ:SHOP) and gave it a “Buy” rating with a 12-month price target of $130.
Felix Gelt, the Managing Director of Research at Rockcliffe Capital, noted that Shopify Inc. (NASDAQ:SHOP) offers a unique combination of software, e-commerce, and AI. This positions the company as an important platform for the future of global retail.
Gelt also pointed out that Shopify Inc.’s (NASDAQ:SHOP) steady growth, consistent free cash flow margins, and strong investments in AI “make it a generational compounder.”
Rockcliffe Capital’s investment thesis highlighted that the company’s revenue grew by 27% year-over-year in the first quarter of 2025 to reach $2.36 billion. This growth was driven by gross merchandise value (GMV) growth and strong performance in international markets.
Shopify Inc. (NASDAQ:SHOP) also has a strong cash flow profile. The company’s management expects a free cash flow margin to stay in the mid-teens for the second quarter.
The research firm also noted that Shopify Inc. (NASDAQ:SHOP) is expected to benefit from AI and enterprise tailwinds. The company is introducing new AI tools, such as “Sidekick.” Rockcliffe Capital expects new AI tools combined with accelerated enterprise adoption to drive next-phase monetization.
Shopify Inc. (NASDAQ:SHOP) is a Canadian multinational commerce and financial technology company that offers a platform for e-commerce and a range of financial tools for merchants.
6. ASML Holding N.V. (NASDAQ:ASML)
Number of Hedge Fund Holders: 80
ASML Holding N.V. (NASDAQ:ASML) is one of the 11 Best Foreign Stocks to Buy According to Hedge Funds. On July 1, Bank of America reduced its price target for ASML Holding N.V. (NASDAQ:ASML) from €795 to €759 while keeping a “Buy” rating.
The firm highlighted several risks affecting Foundry and Logic demand, especially in 2026. Despite that, BofA analysts believe that the stock is attractively valued at about 19.6 times estimated 2026 EV/EBITDA, which is below its 10-year median of 22x.
BofA also reduced its earnings per share (EPS) estimates for ASML Holding N.V. (NASDAQ:ASML) for calendar years 2026 and 2027 by 4% to 5%, citing several downside risks. These include slightly lower revenues from China and uncertainty about demand from major chipmakers.
The analysts highlighted multiple challenges such as ongoing issues at Intel ahead of its 18A ramp-up, an unclear situation at Samsung in DRAM, and additional export controls on China that could hurt demand from existing clients.
The firm’s analysts also pointed out that ASML Holding N.V. (NASDAQ:ASML) could see near-term demand for its extreme ultraviolet (EUV) weaken due to slow adoption of high-NA technology by key customers like TSMC and Samsung, and SK Hynix possibly shifting toward 3D DRAM
On the positive side, BofA analysts noted strong demand for 2nm at TSMC and potential growth from Samsung as it plans to start production on its 2nm process in the US in early 2026. There could also be benefits if production capacity moves from China to Korea and Taiwan, if US export waivers are revoked.
Despite the lower estimates for 2026, BofA remains bullish on ASML Holding N.V. (NASDAQ:ASML) in the long term. Even with export bans, the firm believes that ASML’s earnings per share could reach €40 by 2030, with a possible upside to €50. This optimism is based on the growing demand for AI chips.
ASML Holding N.V. (NASDAQ:ASML) is a Dutch company that designs and develops advanced semiconductor equipment systems, including photolithography machines, which are used to produce chips.
5. Eaton Corporation plc (NYSE:ETN)
Number of Hedge Fund Holders: 85
Eaton Corporation plc (NYSE:ETN) is one of the 11 Best Foreign Stocks to Buy According to Hedge Funds. On June 16, Eaton Corporation plc (NYSE:ETN) announced that it has entered into an agreement to acquire Ultra PCS Limited from the Cobham Ultra Group.
Ultra PCS is known for its innovative safety and mission-critical aerospace solutions. These will enhance Eaton Corporation plc’s (NYSE:ETN) offerings in both military and civilian aircraft.
Eaton Corporation plc (NYSE:ETN) expects that Ultra PCS has a strong growth and high-margin business that will add value to the company’s own operations.
Under the agreement, Eaton Corporation plc (NYSE:ETN) is set to pay $1.55 billion to buy Ultra PCS. The transaction, which is subject to customary closing conditions and regulatory approvals, is expected to close in the first half of 2026.
This acquisition will help Eaton Corporation plc (NYSE:ETN) to grow in the aerospace market and better serve its customers with tailored, next-generation aerospace solutions.
Eaton Corporation plc (NYSE:ETN) is an intelligent power management company that is headquartered in Dublin, Ireland. The company manufactures a range of products for the data center, utility, industrial, commercial, machine building, residential, aerospace, and mobility markets.
4. PDD Holdings Inc. (NASDAQ:PDD)
Number of Hedge Fund Holders: 87
PDD Holdings Inc. (NASDAQ:PDD) is one of the 11 Best Foreign Stocks to Buy According to Hedge Funds. On May 28, Bernstein analysts, led by Robin Zhu, lowered their price target for PDD Holdings Inc. (NASDAQ:PDD) from $160 to $125 but kept an “Outperform” rating.
This decision came after the company’s first-quarter results, which fell short of both Bernstein’s and the wider market’s expectations, especially in revenue and profits.
The main reason for this shortfall was lower Gross Merchandise Volume (GMV) from Temu, PDD Holdings Inc.’s (NASDAQ:PDD) overseas e-commerce platform.
Bernstein’s analysis, which is based on discussions with cross-border merchants, indicates that Temu’s GMV was between $13-15 billion for the first quarter. This is an increase from about $10 billion in the same quarter last year. Despite this growth, it still failed to meet market expectations.
The operating profit was also below forecasts because of the revenue miss and higher spending on sales and marketing. PDD Holdings Inc.’s (NASDAQ:PDD) gross margin stayed relatively stable compared to Q4 2024. Bernstein analysts believe that this suggests that the sales mix of semi-consignment sales on Temu did not change much.
PDD Holdings Inc. (NASDAQ:PDD), previously Pinduoduo Inc., is a multinational commerce group that owns a portfolio of businesses, including e-commerce platforms Pinduoduo and Temu.
3. Spotify Technology S.A. (NYSE:SPOT)
Number of Hedge Fund Holders: 106
Spotify Technology S.A. (NYSE:SPOT) is one of the 11 Best Foreign Stocks to Buy According to Hedge Funds. On June 27, UBS increased its price target for Spotify Technology S.A. (NYSE:SPOT) from $680 to $895 while keeping a “Buy” rating.
The research firm highlighted several growth catalysts for the company. These include Spotify Technology S.A. (NYSE:SPOT) expanding its audiobook offerings into new markets, launching new subscription tiers, increasing prices, and growing advertising revenue.
UBS expects these factors can help Spotify Technology S.A. (NYSE:SPOT) improve monetization and maintain about 16% foreign-exchange-neutral revenue growth through 2028.
The firm also believes that the company’s increasing focus on non-music content and cost management can further improve margins. UBS projects Spotify Technology S.A.’s (NYSE:SPOT) operating margin to reach 20% in 2027. This is above the market consensus of 17.5%.
UBS analysts expect increased cash generation from these improvements, which could give Spotify Technology S.A. (NYSE:SPOT) more flexibility to return value to shareholders through different capital allocation strategies.
Spotify Technology S.A. (NYSE:SPOT) is a Swedish company that operates the largest audio streaming subscription service in the world. It offers access to millions of songs, podcasts, and audiobooks through its platform.
2. Alibaba Group Holding Limited (NYSE:BABA)
Number of Hedge Fund Holders: 125
Alibaba Group Holding Limited (NYSE:BABA) is one of the 11 Best Foreign Stocks to Buy According to Hedge Funds. On May 16, Benchmark analyst Fawne Jiang reduced the price target for Alibaba Group Holding Limited (NYSE:BABA) from $190 to $176 but kept a “Buy” rating.
This decision came after Alibaba Group Holding Limited (NYSE:BABA) reported revenue for the fourth quarter of its fiscal year 2025, which did not meet expectations.
The main reasons for the shortfall were weaker results in the company’s AIDC division and outdated consensus estimates that did not take into account recent asset divestitures.
Even though overall revenue missed expectations, Jiang pointed out that Alibaba Group Holding Limited’s (NYSE:BABA) core commerce and cloud computing segments showed strong growth. The company’s customer management revenue (CMR) grew by 12% compared to last year, beating market estimates. This growth was supported by higher take rates and matched the general trend in Gross Merchandise Volume (GMV) across the industry.
Cloud revenue also grew faster, reaching the high teens, driven by strong demand for AI services.
Looking ahead, the analyst expects CMR to continue growing faster than GMV through the 2026 fiscal year, driven by sustained gains in take rates.
Alibaba Group Holding Limited (NYSE:BABA), or simply Alibaba, is a Chinese multinational technology company specializing in e-commerce, retail, digital media and entertainment, cloud, and technology.
1. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 187
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is one of the 11 Best Foreign Stocks to Buy According to Hedge Funds. On July 1, Needham increased its price target on Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) from $225 to $270 and kept a “Buy” rating.
The research firm highlighted strong AI-driven growth prospects for the company through 2027.
Needham analysts expect Taiwan Semiconductor Manufacturing Company Limited’s (NYSE:TSM) total revenue to rise from about $114 billion in 2025 to $130 billion in 2026 and $160 billion in 2027. These numbers are based on the firm’s newly launched AI wafer demand model.
Specifically, AI revenue is expected to grow from $26 billion in 2025 to $33 billion in 2026 and $46 billion in 2027. Needham believes that the silicon content growth is becoming an increasingly important reason for Taiwan Semiconductor Manufacturing Company Limited’s (NYSE:TSM) AI revenue growth.
Additionally, Needham forecasts that the company’s capital expenditure will increase from $40 billion in 2025 to $45 billion in 2026 and $50 billion in 2027. The firm expects a shift in mix toward equipment that could boost the wafer fab equipment outlook, especially for 2027.
The firm noted that the ramp-up of Rubin Ultra is likely to help Taiwan Semiconductor Manufacturing Company Limited’s (NYSE:TSM) growth to re-accelerate in 2027 and beyond.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is a Taiwanese multinational semiconductor contract manufacturing and design company that specializes in manufacturing, packaging, and testing integrated circuits for various industries.
While we acknowledge the potential of TSM as an investment, 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 TSM and that has a 100x upside potential, check out our report about this cheapest AI stock.
READ NEXT: 10 Best American Semiconductor Stocks to Buy Now and 11 Best Fintech Stocks to Buy Right Now.
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