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.
A business analyst reviewing a portfolio of stocks and bonds in the current market capitalization.
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.
9. Micron Technology, Inc. (NASDAQ:MU)
Analyst Upside Potential: 45.46%
Number of Hedge Fund Holders: 96
Micron Technology, Inc. (NASDAQ:MU) is one of the Best Stocks to Invest in for High Returns. On July 29, Micron Technology, Inc. (NASDAQ:MU) announced the launch of a new memory chip for space applications.
The chip is a single-level cell NAND that has the capacity of 256 gigabits. The chip stands out as it has the capacity to withstand space radiation and harsh conditions. This launch makes Micron Technology, Inc. (NASDAQ:MU) the first company to offer a space application storage device. Management noted that this launch is part of a bigger plan wherewith the company plans to introduce more NAND, NOR, and DRAM solutions. Moreover, the chip is tested for all these challenges and follows strict NASA and military standards.
Micron Technology, Inc. (NASDAQ:MU) is a technology company that makes memory and storage products like DRAM, NAND, and NOR chips.
8. ServiceNow, Inc. (NYSE:NOW)
Analyst Upside Potential: 21.83%
Number of Hedge Fund Holders: 106
ServiceNow, Inc. (NYSE:NOW) is one of the Best Stocks to Invest in for High Returns. On August 1, ServiceNow, Inc. (NYSE:NOW) announced that it has agreed to invest $750 million in Genesy, which is a leading AI‑Powered Experience Orchestration company.
The total investment secured by Genesy amounts to $1.5 billion, with the other $75 million coming from Salesforce, Inc. (NYSE:CRM). Genesy noted that the investment would be used to buy back shares from current equity holders. The company has deep partnerships with both the investing companies. The partnership with Salesforce brings a unified AI-powered CX solution, called the CX Cloud. On the other hand, ServiceNow, Inc. (NYSE:NOW) and Genesys offer an integrated solution that brings together customer service teams in one place. The investment is expected to close by the end of Genesys’s fiscal year 2026, pending regulatory approval.
ServiceNow, Inc. (NYSE:NOW) provides a cloud-based AI platform that helps businesses automate and digitize workflows across various departments.
7. Intuitive Surgical, Inc. (NASDAQ:ISRG)
Analyst Upside Potential: 23.27%
Number of Hedge Fund Holders: 106
Intuitive Surgical, Inc. (NASDAQ:ISRG) is one of the Best Stocks to Invest in for High Returns. On July 23, Leerink Partners analyst Mike Kratky raised the firm’s price target on Intuitive Surgical, Inc. (NASDAQ:ISRG) from $587 to $593, while maintaining a Buy rating on the stock.
The analyst noted that the company delivered robust results in the fiscal second quarter of 2025. Both revenue and earnings per share exceeded expectations by 4% and 14%. Kratky noted that this was driven by strong revenue growth in all segments and a rise in da Vinci system placements in the United States.
Moreover, Intuitive Surgical, Inc. (NASDAQ:ISRG) also saw greater-than-expected global procedure growth and raised its full-year guidance for procedure growth and gross margin. It now expects international da Vinci procedure growth of approximately 15.5% to 17% in 2025, compared to 17% in 2024.
Intuitive Surgical, Inc. (NASDAQ:ISRG) is a medical technology company that develops robotic-assisted surgical systems, including the da Vinci surgical system and the Ion endoluminal system.
6. Adobe Inc. (NASDAQ:ADBE)
Analyst Upside Potential: 31.21%
Number of Hedge Fund Holders: 111
Adobe Inc. (NASDAQ:ADBE) is one of the Best Stocks to Invest in for High Returns. On August 1, Keith Weiss from Morgan Stanley maintained a Buy rating on Adobe Inc. (NASDAQ:ADBE) with a price target of $510.
The analyst believes that the company is undervalued relative to its growth potential. He noted that the company’s growth is expected to be driven by its Digital Media segment. Moreover, Adobe Inc.’s (NASDAQ:ADBE) strategy to segment its business and adjust pricing for different customer groups is expected to accelerate growth by fostering innovation at the high end of its portfolio.
Weiss also highlighted his bullish sentiment on the company’s introduction of GenStudio, which integrates the Digital Media and Digital Experience offerings. He noted that this development optimizes the content supply chain and supports specific use cases including performance marketing. Lastly, Weiss likes the overall risk/reward situation of Adobe Inc. (NASDAQ:ADBE).
Adobe Inc. (NASDAQ:ADBE) is a technology company that provides tools for creating, managing, and delivering digital content and experiences.
5. Eli Lilly and Company (NYSE:LLY)
Analyst Upside Potential: 41.70%
Number of Hedge Fund Holders: 119
Eli Lilly and Company (NYSE:LLY) is one of the Best Stocks to Invest in for High Returns. On July 31, Asad Haider of Goldman Sachs maintained a Buy rating on Eli Lilly and Company (NYSE:LLY) with a price target of $833.
The analyst highlighted that the company’s recent SURPASS-CVOT trial showed Mounjaro is not inferior to Trulicity and reduced major cardiovascular events by 8%. He noted that although the results were not statistically significant it removed a major uncertainty regarding the company.
Moreover, the analyst also expects strong performance from Eli Lilly and Company’s (NYSE:LLY) 2Q25 earnings report and is also watching for management’s guidance for the year. He also views the results for the ATTAIN-1 trial as significant as it tests the company’s drug for oral obesity pill.
Eli Lilly and Company (NYSE:LLY) is a global pharmaceutical firm that discovers, develops, manufactures, and markets medicines.
4. Alibaba Group Holding Limited (NYSE:BABA)
Analyst Upside Potential: 25.16%
Number of Hedge Fund Holders: 125
Alibaba Group Holding Limited (NYSE:BABA) is one of the Best Stocks to Invest in for High Returns. On August 5, Alibaba Group Holding Limited’s (NYSE:BABA) navigation platform, launched Amap 2025, which is the world’s largest AI-native map app.
The latest upgrade transforms Amap from a navigation tool into a smart traveling partner powered by Alibaba Group Holding Limited’s (NYSE:BABA) AI foundation model, Qwen. The tool features an AI assistant that not only helps in navigation but also plans and executes travel tasks based on user preferences. It can offer suggestions and also make last-minute reservations or hotel bookings. This aligns with the company’s broader strategy of investing heavily in AI for business transformation over the next 3 years.
Alibaba Group Holding Limited (NYSE:BABA) is a global technology company that operates major e-commerce sites, offers cloud computing services, and provides other related services.
3. Salesforce, Inc. (NYSE:CRM)
Analyst Upside Potential: 24.36%
Number of Hedge Fund Holders: 140
Salesforce, Inc. (NYSE:CRM) is one of the Best Stocks to Invest in for High Returns. On July 31, Salesforce, Inc. (NYSE:CRM) announced that it has signed an agreement to acquire Bluebirds, which is an AI-powered prospecting platform.
The AI-powered Bluebirds platform automated the early stages of sales prospecting, helping sales teams connect with effective leads faster. Management noted that once the deal closes, they plan to integrate Bluebirds’ tools into its Sales Cloud and Agentforce platforms. This will allow its users to automate workflows and increase productivity for the sales teams. The acquisition is expected to close in the third quarter of Salesforce, Inc.’s (NYSE:CRM) fiscal year 2026.
Salesforce, Inc. (NYSE:CRM) provides customer relationship management technology that helps organizations use AI to improve business operations.
2. Netflix, Inc. (NASDAQ:NFLX)
Analyst Upside Potential: 37.54%
Number of Hedge Fund Holders: 150
Netflix, Inc. (NASDAQ:NFLX) is one of the Best Stocks to Invest in for High Returns. On July 29, Thomas Champion from Piper Sandler reiterated a Buy rating on Netflix, Inc. (NASDAQ:NFLX) with a price target of $1,500.
The analyst noted that the company’s viewership increased in June, reversing the previous trend of dropping viewers. This came in after the platform released new seasons of hit shows like Ginny & Georgia, Blindspot, and Squid Game. Champion noted that these shows attracted more viewers, giving Netflix, Inc. (NASDAQ:NFLX) a boost.
The analyst also highlighted the company’s strong content pipeline for the rest of the year, with new shows including Stranger Things and Bridgerton expected to release soon. These shows are expected to attract more subscribers. Moreover, the company’s ad-supported business is also expanding and contributing to the revenue growth.
Netflix, Inc. (NASDAQ:NFLX) is a global entertainment company that provides streaming services for TV shows, movies, and games.
1. Amazon.com, Inc. (NASDAQ:AMZN)
Analyst Upside Potential: 22.54%
Number of Hedge Fund Holders: 328
Amazon.com, Inc. (NASDAQ:AMZN) is one of the Best Stocks to Invest in for High Returns. On August 1, Stifel lowered the firm’s price target on Amazon.com, Inc. (NASDAQ:AMZN) from $262 to $260, while maintaining a Buy rating on the stock.
The firm noted that the company’s results for the fiscal second quarter were very healthy as both revenue and operating income exceeded the high end of guidance. However, despite the strong performance, the firm reduced the price target as the Q3 outlook remains mixed. Stifel noted that the revenue guidance for Q3 is better than expected; however, the operating income guidance is slightly below expectations.
Moreover, the firm was also disappointed by the company’s AWS segment, which remained stable but did not accelerate as expected.
Amazon.com, Inc. (NASDAQ:AMZN) is a technology company known for its e-commerce platform and cloud computing services through its AWS platform.
While we acknowledge the potential of AMZN to grow, 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 AMZN and that has 100x upside potential, check out our report about this cheapest AI stock.
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Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
