In this article, we will look at the 11 Best Stocks to Invest in for High Returns.
On August 4, Tom Lee, co-founder and managing partner of Fundstrat Capital, and chairman of BitMine, joined CNBC Television to discuss the markets and the state of the economy. While August has historically brought some turbulence and volatility to the market, Lee believes that this August could take the S&P 500 to new all-time highs. He acknowledged that last week was a consolidation, as there were 5 days when the market opened higher and closed lower. He noted that this makes sense as the market is consolidating the 28% gains from the April lows. Lee highlighted that the Jobs report was not a surprise, as we already knew that the labour market had been slow, and this report is merely data catching up with the market. This sets up a positive environment for the Fed to make a dovish pivot in the fall.
Lee noted that he believes the market is going to rally in August with the S&P 500 reaching 6,500 to 6,600 all-time highs and going well above 7,000 in the next 12 months. While talking about the Fed cutting interest rates, Lee noted that he believes that the Fed needs to be apolitical, as it seems that they are drifting away from the unemployment metric. The unemployment data shows that it is almost close to 5% now, which means that the Fed has to reconsider the job market going into a cycle of weakening. Moreover, the inflation data also suggests that a fall cut is near and will help the market rally to the anticipated range.
With that, let’s take a look at the 11 best stocks to invest in for high returns.
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Our Methodology
To curate the list of 11 best stocks to invest in for high returns, we used Finviz Stock Screener and CNN as our sources. We used the screener to aggregate a list of companies with an upside potential of at least 20%, as of August 8, 2025. Next, we narrowed down on the 11 stocks that are the most popular among elite hedge funds, sourced from Insider Monkey’s Q1 2025 database. The list is ranked in ascending order of the number of hedge fund holders.
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).
11 Best Stocks to Invest in for High Returns
11. Merck & Co., Inc. (NYSE:MRK)
Analyst Upside Potential: 28.99%
Number of Hedge Fund Holders: 93
Merck & Co., Inc. (NYSE:MRK) is one of the Best Stocks to Invest in for High Returns. On July 30, Goldman Sachs analyst Asad Haider maintained a Buy rating on Merck & Co., Inc. (NYSE:MRK) while reducing the price target from $99 to $94.
The analyst noted that despite recent complexities in the company’s financial update released on July 29, the bottom line surpassed expectations. Moreover, the Gardasil vaccine franchise in the United States and China has been a concern, however, the company’s new product Winrevair is showing strong growth potential. Management is optimistic about expanding its label and anticipates supportive data from the HYPERION trial later this year, which boosts confidence in future growth.
Haider also highlighted the company’s $3 billion optimization plan as another positive. Through this initiative the company aims to shift resources from slower-growth areas to new product launches and research and development. The analyst believes that while this might increase costs temporarily however, it supports long term expansion.
Merck & Co., Inc. (NYSE:MRK) is a global healthcare company that develops and sells prescription medicines, vaccines, and animal health products.
10. AppLovin Corporation (NASDAQ:APP)
Analyst Upside Potential: 27.94%
Number of Hedge Fund Holders: 96
AppLovin Corporation (NASDAQ:APP) is one of the Best Stocks to Invest in for High Returns. On August 1, Rob Sanderson from Loop Capital Markets reiterated a Buy rating on AppLovin Corporation (NASDAQ:APP) with a price target of $650.
The reiterated bullish sentiment follows the company’s announcement to release its fiscal second quarter results on August 6. AppLovin Corporation (NASDAQ:APP) delivered robust results during its fiscal first quarter of 2025. The revenue reached $1.48 billion after growing 40.25% and surpassed expectations by $101.7 million. Moreover, the EPS of $1.67 also beat expectations by $0.23.
The management is anticipating total advertising revenue for the second quarter to be within the range of $1.195 billion to $1.215 billion. Whereas, the adjusted EBITDA is anticipated between $970 million and $990 million.
AppLovin Corporation (NASDAQ:APP) is a marketing technology company that offers software and AI solutions to help businesses reach and grow their global audiences.
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