In this article, we will take a look at 11 High Profit Margin Stocks to Buy According to Hedge Funds.
US equities fell on March 19, with oil prices falling as Wall Street awaited the latest news on the Iran conflict. The drop came after crude futures rose as high as 10% to $119 per barrel as Iran and Israel conducted attacks on critical oil and gas infrastructure. The intensification of hostilities fueled fears of more serious repercussions from the conflict than anticipated. Meanwhile, markets had been wrestling with rising inflation estimates from the Federal Reserve, which lowered expectations for interest rate cuts.
Given that markets seem to be dismissing any rate cuts this year, analysts at Macquarie suspect the Fed’s next move will be in the opposite direction. In notes released before and after the Fed meeting, the firm stated that it believes inflationary pressures are growing and will compel the Fed to raise interest rates sometime next year. Regarding this, the firm stated the following:
“We see the next move as a hike. However, with more mixed signals from the labor market and the potential for consumer headwinds near-term from higher oil, we have now pushed out this timing to 1H27.”
With that backdrop, let’s explore our list of high profit margin stocks to buy according to hedge funds.
Our Methodology
For this list, we used stock screeners to compile a list of companies with a net profit margin above 25%, signaling strong operational efficiency and pricing power. These stocks are also popular among analysts and elite 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 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
11. Trip.com Group Limited (NASDAQ:TCOM)
Trip.com Group Limited (NASDAQ:TCOM) ranks among the best high profit margin stocks to buy. On February 26, Barclays reduced its price target for Trip.com Group Limited to $75 from $90 while retaining an Overweight rating on the company’s stock. The firm stated that both revenues and earnings came in somewhat higher than originally expected.
Trip.com Group Limited beat analyst expectations with earnings per share of $4.97, compared to $4.77. In addition, the company generated $15.4 billion in revenue, which exceeded the predicted $14.86 billion. However, the slightly higher revenues were partially offset by marginally higher fourth-quarter expenses, while gross margins were stable at 81%.
Trip.com demonstrated particularly strong growth, with foreign reservations up 60% year-over-year in 2025 and 2026 to date, as well as in outbound travel. Management also issued a positive first-quarter outlook, citing sustained momentum experienced quarter-to-date, particularly with regard to Chinese New Year travel demand.
Global travel service company Trip.com Group Limited provides end-to-end solutions for the corporate travel, lodging, tour, and transportation sectors.
10. Crown Castle Inc. (NYSE:CCI)
Crown Castle Inc. (NYSE:CCI) ranks among the best high profit margin stocks to buy. On March 5, Bernstein SocGen Group began coverage of Crown Castle Inc. with an Outperform rating and a $102 price target. The firm forecasts revenue growth will rebound to the low single digits following recent low years, including a 2026 slump caused by $3.5 billion in Dish cancellations.
Crown Castle’s quarterly results were impacted by a dispute with former DISH Network following the cancellation of wireless tower contracts. DISH had been Crown Castle’s largest additive customer in recent years, though it currently accounts for about 5% of total annual site rental revenue as of the end of 2025.
Crown Castle’s towers earn $102,000 per site, trailing competitors American Tower at $125,000 and SBA Communications at $107,000. Bernstein expects carrier renewals in the coming years to result in around 3% year-over-year increase, excluding Sprint and Dish turnover.
Crown Castle Inc. is a major player in the real estate investment trust (REIT) sector, with a sizable portfolio that comprises over 40,000 cell towers.
9. Marvell Technology, Inc. (NASDAQ:MRVL)
Marvell Technology, Inc. (NASDAQ:MRVL) ranks among the best high profit margin stocks to buy. Following Marvell Technology, Inc.’s quarterly earnings, Loop Capital reiterated its Buy rating and $120 price objective for the stock on March 6. The company posted fourth-quarter earnings that exceeded Wall Street projections and provided first-quarter guidance that was much higher than analyst estimates, driven by strong demand for its AI data center solutions.
The company reported adjusted EPS of $0.80 in Q4, exceeding the analyst consensus of $0.79 by $0.01. Revenue hit a record $2.22 billion, up 22% year-over-year and slightly higher than the $2.21 billion expectation.
Marvell’s data center segment generated $1.65 billion in revenue during the quarter, accounting for 74% of overall sales and up 21% year-over-year. Meanwhile, the communications and other segment generated $567.4 million, a 26% increase year-over-year. Loop Capital also highlighted the company’s fiscal 2027 revenue expectation for data centers, which is expected to increase by more than 40% from a previous estimate of 25%.
Marvell Technology, Inc. is a semiconductor development and manufacturing company with a major focus on data centers.
8. Adobe Inc. (NASDAQ:ADBE)
Adobe Inc. (NASDAQ:ADBE) ranks among the best high profit margin stocks to buy. On March 12, Adobe Inc. posted strong fiscal Q1 earnings, though its stock price fell 6.7% owing to leadership transition news and fears about AI competition. Adobe’s results exceeded forecasts, with annualized recurring revenue of $26.06 billion and AI-driven revenue growth tripling year-over-year.
Moreover, the company’s AI shift has shown up in a number of major areas. During Q1, monthly active users across Acrobat, Creative Cloud, Express, and Firefly reached 850 million, representing a 17% increase year-over-year.
Despite the strong earnings announcement, Adobe Inc. shares fell as CEO Shantanu Narayen announced his plan to leave Adobe after 18 years in the role. Narayen stated that he would collaborate with Lead Independent Director Frank Calderoni and the Board to select his successor, although no timetable was provided.
Adobe Inc. is a software company that specializes in creating, publishing, and promoting digital content. It offers a wide range of tools for professionals and consumers, including Photoshop, Illustrator, Acrobat, and Premiere Pro, which are often bundled in the Adobe Creative Cloud subscription.
7. Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX)
Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) ranks among the best high profit margin stocks to buy. On March 10, Truist Securities boosted its price target for Vertex Pharmaceuticals Incorporated to $525 from $490, while keeping a Buy rating on the company’s shares. The firm cited encouraging Week-36 interim findings from Vertex’s Phase 3 RAINIER study in IgAN.
The trial satisfied all primary and secondary objectives, demonstrating deep, consistent answers across subgroups and a strong safety profile. The trial results are the first of several major catalysts for Vertex’s rare kidney lineup, which has recently gained investor attention.
Stifel, which has a Hold rating on VRTX shares, also remarked on the study’s findings, saying they are highly statistically relevant and should meet the clearance criteria. However, the firm stated that it is uncertain whether the medication differs from competing products such as Otsuka’s sibeprenlimab in the increasingly saturated IgAN market.
Vertex Pharmaceuticals Incorporated is a global biotechnology company. It develops and commercializes therapies for serious diseases, with a primary focus on cystic fibrosis and genetic disorders.
6. AppLovin Corporation (NASDAQ:APP)
AppLovin Corporation (NASDAQ:APP) ranks among the best high profit margin stocks to buy. Following an investor meeting on March 10, William Blair reiterated its Outperform rating on AppLovin Corporation. The company’s management expressed optimism that existing business patterns will continue, despite the fact that the stock has fallen significantly year-to-date, despite rising 85% over the previous year.
AppLovin CEO Adam Foroughi cited proprietary first-party data, such as ad serving, engagement data, and feedback loops, as a key benefit that contributes to the Axon machine learning stack. In that regard, the company’s Axon 2.0 incorporates the latest AI research, resulting in increased take rates as demand grows.
Meanwhile, on March 5, Oppenheimer reduced its price target for AppLovin Corporation from $740 to $660 while keeping an Outperform rating on the company’s shares. The firm observed that the stock had fallen more than 28% year-to-date, while the S&P Composite remained steady, which it sees as an opportunity for investors, given the company’s earnings and future growth potential.
AppLovin Corporation is a software-based advertising and app monetization company. It operates through two segments, Advertising and Apps. The company also develops and publishes free-to-play mobile games through its studios and partners.
5. Palantir Technologies Inc. (NASDAQ:PLTR)
Palantir Technologies Inc. (NASDAQ:PLTR) ranks among the best high profit margin stocks to buy. On March 11, Truist Securities reiterated its Buy rating on Palantir Technologies Inc. and set a price target of $223. Analyst Arvind Ramnani visited Palantir’s premises, where he spoke with the company’s CFO, Chief Architect, and Head of Investor Relations, as well as investors.
The interaction confirmed Truist’s belief that Palantir was growing as the AI operating system layer for businesses and the government. The firm found two important edge cases in Palantir’s model, including the broader significance of Ontology data in its platforms, along with the upfront rollout processes using field engineers.
Meanwhile, on February 27, UBS raised Palantir Technologies Inc. to Buy from Neutral with a $180 price target, stating that the stock’s recent share price drop has created a very appealing entry point for investors. Analysts reported that Palantir is functioning in a positive environment as businesses accelerate the use of AI after partner and customer inspections.
Palantir Technologies Inc. is a software company that builds platforms such as Gotham and Foundry that help governments and businesses integrate, analyze, and act on large datasets using AI and machine learning, supporting sectors ranging from defense to healthcare, finance, and automotive.
4. Eli Lilly & Company (NYSE:LLY)
Eli Lilly & Company ranks among the best high profit margin stocks to buy. Following the reveal of an innovative employer access platform for obesity therapies, Morgan Stanley reiterated its Overweight rating and $1,313 price target for Eli Lilly & Company on March 5. Eli Lilly recently established its Employer Connect platform in the US, which provides flexible benefit designs geared at increasing access to obesity treatments like Zepbound.
In order to produce solutions that enhance employee access to obesity management medications, the platform facilitates collaboration with independent program administrators.
According to Morgan Stanley, the update may facilitate future development in US volume and provide Zepbound with another commercial access route. The firm also anticipates contributions from the introduction of Orfor, an oral GLP-1 therapy, in April, as well as increased Medicare access in the latter half of the year.
In a related development, Eli Lilly & Company stated that its Orfor therapy outperformed oral semaglutide in a Type 2 diabetes trial, meeting all primary and significant secondary goals.
Eli Lilly & Company is a major global pharmaceutical company that develops, manufactures, and distributes a wide range of drugs. Founded in 1876, it has grown to become one of the world’s largest pharmaceutical companies.
3. Broadcom Inc. (NASDAQ:AVGO)
Broadcom Inc. (NASDAQ:AVGO) ranks among the best high profit margin stocks to buy. On March 5, Benchmark reaffirmed its Buy rating and $485 price target for Broadcom Inc., highlighting the company’s better-than-expected second-quarter forecasts. Broadcom Inc. exceeded market estimates with earnings per share of $2.05, compared to the projection of $2.02. The company also topped revenue expectations, reporting $19.31 billion versus $19.21 billion.
Broadcom Inc. expects its AI revenue to be significantly greater than $100 billion in the coming year. The company also mentioned supply obligations that span through 2028. That said, the market’s key issue is whether hyperscaler and LLM capital expenditures can be managed absent a near-term return on investment slowdown.
Meanwhile, management emphasized enhanced multi-year visibility, which will be fueled by an increasing number of six key platform users expanding their training and inference capacities. Demand, according to the company, is becoming centered among these hyperscaler partners.
Broadcom Inc. is a semiconductor and infrastructure software company. It designs and supplies products, including custom chips, networking solutions, and enterprise software used across industries such as cloud computing, telecommunications, and data centers.
2. Meta Platforms, Inc. (NASDAQ:META)
Meta Platforms, Inc. (NASDAQ:META) ranks among the best high profit margin stocks to buy. On March 5, Erste Group raised Meta Platforms, Inc. to Buy from Hold, highlighting the company’s AI investments and pricing. Analyst Hans Engel stated that Meta expects a major increase in spending to meet its AI objectives in 2026.
Based on the anticipated 12-month price-to-earnings ratio, Meta Platforms, Inc. is currently trading at the lower end of its valuation history over the past 10 years. According to Engel, the price of the stock will rise as a result of this historically cheap valuation, continued strong user and profit growth, as well as the effective integration of AI.
In a separate development, Meta Platforms, Inc. has signed a major multiyear artificial intelligence content licensing agreement with News Corp, potentially valued at up to $50 million per year. This deal allows Meta to access News Corp’s content from the United States and the UK, boosting its AI capabilities.
Meta Platforms, Inc. is a California-based company that develops social media applications. Dedicated to connecting people and growing businesses, the company has two segments: Family of Apps (FoA) and Reality Labs (RL).
1. NVIDIA Corporation (NASDAQ:NVDA)
NVIDIA Corporation (NASDAQ:NVDA) ranks among the best high profit margin stocks to buy. On March 5, Tigress Financial Partners boosted its price target for NVIDIA Corporation to $360 from an unspecified previous target, while retaining a Strong Buy rating on the company’s shares. The firm stated that its fourth-quarter 2026 results increased its AI dominance, driven by a solid Blackwell rollout.
The firm identified $3 trillion to $4 trillion in spending on AI systems by 2030 as a potential area for NVIDIA’s expansion. Tigress further stated that the company’s capital allocation approach prioritizes funding expansion efforts while returning surplus cash to shareholders.
Meanwhile, CLSA maintained its High-Conviction Outperform rating and $300 price target for NVIDIA Corporation. The firm highlighted that NVIDIA’s earnings for FY27-28 had increased by 27%-35% in the past six months. It also stated that NVIDIA Corporation booked $30 billion in sovereign AI income in FY26.
NVIDIA Corporation is a fabless semiconductor company. It designs and develops graphics processing units and related technologies used in gaming, data centers, artificial intelligence, and autonomous systems.
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