In this article, we discuss the 11 best stocks to invest in for grandchildren.
In an era where financial literacy is increasingly recognized as a crucial life skill, teaching children about stock market investing can provide them with a significant advantage. Studies show that early financial education leads to better money management, long-term wealth accumulation, and greater financial security in adulthood. By introducing children to investing at a young age, they can develop a mindset of patience, risk assessment, and the power of compounding—principles that can shape their financial future. A 2023 study by the National Financial Educators Council (NFEC) found that a lack of financial literacy costs the average American $1,819 per year. Teaching children about investing early can help reduce this financial gap and equip them with the necessary skills to navigate economic challenges. Introducing children to stocks helps them understand concepts like risk and reward, diversification, and market fluctuations. Learning how companies operate and grow their revenue also fosters a deeper understanding of the economy. This knowledge can prevent common financial mistakes such as emotional investing, excessive debt, and poor money management.
Read more about these developments by accessing 10 Best AI Data Center Stocks and 10 Buzzing AI Stocks According to Goldman Sachs.
One of the most compelling reasons to teach children about investing is the power of compound interest. If a child begins investing at age 10 instead of waiting until age 30, they could amass significantly more wealth by retirement, simply by starting early. Teaching children about stocks encourages critical thinking and discipline in financial decisions. Instead of seeing money as something to be spent impulsively, they learn the value of investing for the future. A study by Fidelity Investments found that 82% of parents who teach their children about finances believe it leads to greater financial independence. Additionally, teaching investment concepts through real-life experiences, such as monitoring a stock portfolio, fosters engagement and practical learning. With advancements in AI, automation, and digital finance, future generations will need financial acumen to navigate an evolving economy. Experts suggest that children who understand investing will be better prepared for retirement, homeownership, and entrepreneurship.
Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and Beyond the Tech Giants: 35 Non-Tech AI Opportunities.
For this article, we scoured investing forums, analyst reports, and advice from money managers and billionaires and compiled a list of stock options that are deemed the best for a child in the modern world. These stocks are also popular among hedge funds. 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A broker going through a stack of paper records of an exchange of stocks.
Best Stocks To Invest In For Grandchildren
11. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 99
Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company. The company reported $2 billion in free cash flow for the fourth quarter, raising the yearly total to $3.6 billion, despite a $2.4 billion increase in CapEx for 2024. In February, the firm announced that the Powerwall 3, a fully integrated solar and battery system designed to meet home energy needs, was now available in Puerto Rico, offering hope to an island plagued by persistent blackouts. Home-based battery packs like Powerwall offer a dual solution by storing renewable energy for later use, helping homeowners reduce reliance on traditional electricity sources and cut down on heat-trapping air pollution. The company also expects energy storage deployments to grow by at least 50% year-over-year in 2025, supported by new Megafactory operations in Shanghai.
10. Eli Lilly and Company (NYSE:LLY)
Number of Hedge Fund Holders: 106
Eli Lilly and Company (NYSE:LLY) develops and markets human pharmaceuticals. In January the company announced that the US Food and Drug Administration had approved Omvoh for the treatment of moderately to severely active Crohn’s disease in adults. Omvoh is the first biologic treatment in more than 15 years to have disclosed two-year Phase 3 efficacy data in Crohn’s disease at the time of approval. Daniel Skovronsky, the president of Lilly Research Laboratories and Lilly Immunology, stated that Omvoh offers more patients a treatment option that can provide long-term disease control and relieve key symptoms. The company reported a 45% revenue increase to $13.53 billion in the fourth quarter of 2024, fueled by strong volume growth from Mounjaro and Zepbound.
9. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 112
United Group Incorporated (NYSE:UNH) operates as a diversified healthcare company in the United States. In the fourth quarter of 2024, the firm reported adjusted earnings of $6.81 per share on revenues of $100.8 billion. The medical care ratio, representing the percentage of premiums used for medical services, rose to over 87%, surpassing analyst expectations. This increase was attributed to higher medical costs and greater utilization of care. Additionally, the company faced elevated expenses from specialty drugs and reductions in Medicare rates. Medicaid enrollment decreased by 400,000 members due to delays in state rate updates.
8. Berkshire Hathaway Inc. (NYSE:BRK-B)
Number of Hedge Fund Holders: 120
Berkshire Hathaway Inc. (NYSE:BRK-B) is a conglomerate with interests in transport, insurance, and other businesses. As per the report for the third quarter of 2024, operating revenues from consumer products reached $2.1 billion and $6.2 billion in the first nine months of 2024, marking increases of 7% and 8.2% compared to the previous year. In February, reports suggested that Berkshire Hathaway had invested $71.5 billion in Apple, the tech giant. This represents about 24% of Berkshire’s $303 billion investment portfolio, underscoring Apple’s importance to the company’s financial strategy. Reuters reported in February that the company had cut over 4,000 jobs in the past year, even as the Warren Buffett-led conglomerate is on track to deliver a record annual operating profit.
7. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 130
Broadcom Inc. (NASDAQ:AVGO) is a global technology firm that designs, develops, and supplies a range of semiconductors, enterprise software and security solutions. In January, the company launched its innovative Emulex Secure Fibre Channel Host Bus Adapters (HBA), setting a new industry standard. It is a cost-effective, easy-to-manage solution that encrypts all data as it moves between servers and storage. Jeff Hoogenboom, vice president and general manager of the Emulex Connectivity Division at Broadcom, stated that the Emulex Secure Host Bus Adapter would meet the needs by providing an elegantly simple solution that, once installed, encrypts all data across all applications. In the fourth quarter of 2024, the company achieved record semiconductor revenue of $30.1 billion, with $12.2 billion coming from AI. The 220% surge in AI revenue year-on-year was fueled by the company’s advanced AI XPUs and Ethernet networking solutions.
6. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 158
Apple Inc. (NASDAQ:AAPL) is a consumer electronics firm. During the fourth quarter of 2024, the company achieved nearly $27 billion in operating cash driven by record business performance, enabling over $29 billion in returns to shareholders. On February 4th, the company announced the launch of Apple Invites, a new application for iPhones that allows users to create custom invitations to gather friends and family for any occasion. Users can use the app to create and share invitations, RSVP, contribute to Shared Albums, and even interact with Apple Music playlists. Apple Invites also includes Apple Intelligence, which can help users generate images for invites and even write the invitation with the company’s Writing Tools.
5. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 160
Alphabet Inc. (NASDAQ:GOOG) is a technology company that owns and runs the internet search engine Google. As per the results for the fourth quarter of 2024, the company reported consolidated revenues of $96.5 billion, marking a 12% year-over-year increase and reflecting strong momentum across the business. In February, Google released the Gemini 2.0 artificial intelligence model suite to everyone. The suite of models includes 2.0 Flash, described as a reliable workhorse ideal for high-volume, fast-paced tasks. The latest earnings report reveals that Alphabet expects to invest about $75 billion in capital expenditures in 2025, indicating Alphabet’s strategy to diversify beyond its core advertising business.
4. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 193
NVIDIA Corporation (NASDAQ:NVDA) provides graphics, computing and networking solutions. In its fiscal third-quarter report of 2025, the company announced $35.1 billion in revenue for the period ending October 2024, up 17% from the previous quarter and 94% from a year ago. In January, the company disclosed a series of new partnerships aimed at transforming the $10 trillion healthcare and life sciences industry. These collaborations will accelerate drug discovery, advance genomic research, and pioneer next-generation healthcare services through the power of agentic and generative AI. Healthcare leaders IQVIA, Illumina and Mayo Clinic, as well as Arc Institute, are using the latest NVIDIA technologies to develop solutions that will help advance human health.
3. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 235
Meta Platforms, Inc. (NASDAQ:META) engages in the development of products that enable people to connect and share with friends and family. The company recently released its fourth-quarter results, reporting $48.39 billion in revenue and $164.50 billion for the full year 2024, marking year-over-year increases of 21% and 22%, respectively. On a constant currency basis, revenue rose 21% for the quarter and 23% for the year. In January, Reuters reported that Meta Platforms is going all in on AI and wearables, increasing its annual capital investment outlay to $60-65 billion in estimated fiscal year 2025. Meta will be emphasizing the use of creator tools within its ecosystem and advertisers will be using the companies’ AI models to generate marketing materials and execute ad campaigns.
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ:MSFT) is a technology company. In February, the company introduced major upgrades to GitHub Copilot, enhancing its AI capabilities. This includes the launch of Agent Mode and the General Availability of Copilot Edits, both now available in VS Code. Gemini 2.0 Flash has also been added to the model picker for all Copilot users. In January, the company launched OpenAI o3-mini, available in Microsoft Azure OpenAI Service. o3-mini’s advanced capabilities, combined with its efficiency gains, make it a powerful tool for developers and enterprises looking to optimize their AI applications.
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 286
Amazon.com, Inc. (NASDAQ:AMZN) operates as a technology conglomerate with core interests in the ecommerce business. In earnings for the fourth quarter of 2024, the firm posted earnings per share of $1.86, beating analyst expectations by $0.38. The revenue over the period was $187 billion, up more than 10% compared to the revenue over the same period last year and beating estimates by $560 million. During the earnings call, the management of the firm projected Q1 2025 net sales between $151 billion and $155.5 billion.
While we acknowledge the potential of Amazon.com, Inc. (NASDAQ:AMZN) as an investment, our conviction lies in the belief that some stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a stock that is more promising than Amazon.com, Inc. (NASDAQ:AMZN) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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