In this article, we discuss the 12 best big stocks to invest in.
Big stocks, also known as large-cap stocks, are stocks with a market capitalization of $10 billion or more. There is also a subset of stocks under large-cap stocks. This subset is called mega-cap stocks with a market cap of $200 billion or more.
One index that tracks big stocks with largest market caps is S&P 100 – a subset of S&P 500. According to S&P Global, S&P 100 is designed to track 100 major blue chip companies in the United States. As of August 31, 2021, this index includes 101 stocks. The median total market capitalization in the index is at $165.466 billion billion with the smallest at $39.389 billion and the largest at $2.533 trillion.
While S&P Global mentions sector representation or balance as one of the factors used to screen stocks for S&P 100, this index features an extensive number of tech companies. Information technology and communication services stocks such as Apple Inc. (NASDAQ: AAPL) and Facebook, Inc. (NASDAQ: FB) account for 48.4% of all the stocks in the S&P 100. Consumer discretionary stocks such as Amazon.com, Inc. (NASDAQ: AMZN) and Tesla, Inc. (NASDAQ: TSLA) account for an additional 13.3%.
While stock valuations will change over time and the pandemic-era economic stimuli will come to an end, some of these companies have established themselves firmly as blue chip market leaders.
Photo by Alexandr Bormotin on Unsplash
Our Methodology
We chose some of the most famous large-cap stocks based on the data of 873 hedge funds tracked by Insider Monkey.
Why should we pay attention to hedge fund sentiment during stock selection? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY[see details here]. We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Best Big Stocks To Invest In
12. Tesla, Inc. (NASDAQ: TSLA)
Number of Hedge Fund Holders: 60
Tesla, Inc. (NASDAQ: TSLA) is an American company known for its electric vehicles as well as its energy business selling solar energy and battery energy storage products. It is ranked twelfth on our list of 12 best big stocks to invest in. The stock has returned over 123% to investors over the course of the past year.
At the end of the second quarter of 2021, 60 hedge funds in the database of Insider Monkey held stakes worth $9.30 billion in Tesla, Inc. (NASDAQ: TSLA).
Out of the hedge funds tracked by Insider Monkey, Cathie Wood’s ARK Investment Management has the most valuable stake in Tesla, Inc. (NASDAQ: TSLA) as of the end of the second quarter of 2021, worth close to $3.69 billion, comprising 6.87% of its 13F portfolio.
In its Q2 2021 investor letter, Worm Capital LLC, an investment management firm, mentioned Tesla, Inc. (NASDAQ: TSLA). Here is what the firm had to say:
“Tesla underperformed in the quarter, but we maintain our high conviction in the long-term thesis on each business model. Much like art or writing, investment research is a continuous process—it never really ends. Prices can move in either direction in any given quarter, but our advantage often comes from knowing the businesses so well that short-term fluctuations in pricing shouldn’t affect our decision-making. On high conviction positions, this patience is often rewarded, which is why research is so valuable to our process…
..Tesla is in a class of its own. What many in the market seem to (still) not understand is that Tesla is not a car company so much as a complex manufacturing firm—with significant recurring software potential—growing, in our view, at a targeted rate of 50-100% YoY over the next several years. Unlike any other automotive firm in existence today, Tesla alone is a vertically integrated hardware and software business developing state-of-the-art manufacturing techniques that will revolutionize the auto industry (i.e. its Giga Presses, 4680 cells, etc.). It is a generational company and we anticipate it will eventually be the largest company in the world. Many of the conventional narratives around competition displacing Tesla’s lead are fundamentally flawed, and the many headlines surrounding Tesla’s approach to autonomy are frustratingly superficial. (As an aside, we highly recommend watching Andrej Karpathy’s, Tesla’s head of AI, his recent presentation from June: “Tesla details its self-driving Supercomputer that will bring in the Dojo era”)”
11. Walmart Inc. (NYSE: WMT)
Number of Hedge Fund Holders: 71
Walmart Inc. (NYSE: WMT) is an American retailer corporation known for its hypermarkets across North America. It is the largest retailer in the United States and the world’s largest company by revenue. It is ranked eleventh on our list of 12 best big stocks to invest in.
At the end of the second quarter of 2021, 71 hedge funds in the database of Insider Monkey held stakes worth $8.05 billion in Walmart Inc. (NYSE: WMT), up from 58 the preceding quarter worth $5.88 billion.
Out of the hedge funds tracked by Insider Monkey, billionaire Ken Fisher’s Fisher Asset Management has the most valuable in Walmart Inc. (NYSE: WMT) as of the end of the second quarter of 2021, worth close to $1.78 billion, comprising 1.11% of its 13F portfolio. Fisher Asset Management increased its stake in Walmart Inc. (NYSE: WMT) by 4% during the second quarter of 2021.
10. NVIDIA Corporation (NASDAQ: NVDA)
Number of Hedge Fund Holders: 86
NVIDIA Corporation (NASDAQ: NVDA) is an American tech company active mainly in the semiconductor industry. Its products span from chips to graphics processing units to supercomputers used in cloud computing. It is ranked tenth on our list of 12 best big stocks to invest in. The stock has returned over 75.51% to investors over the course of the past year.
At the end of the second quarter of 2021, 86 hedge funds in the database of Insider Monkey held stakes worth $9.10 billion in NVIDIA Corporation (NASDAQ: NVDA), up from 80 the preceding quarter worth $6.20 billion.
Out of the hedge funds tracked by Insider Monkey, GQG Partners has the most valuable stake in NVIDIA Corporation (NASDAQ: NVDA) as of the end of the second quarter of 2021, worth close to $2.97 billion, comprising 8.73% of its 13F portfolio.
Like Facebook, Inc. (NASDAQ: FB), Microsoft Corporation (NASDAQ: MSFT), and Amazon.com, Inc. (NASDAQ: AMZN), investors are paying attention to NVIDIA Corporation (NASDAQ: NVDA) amid the company’s long-term growth potential.
In its Q2 2021 investor letter, Baron Opportunity Fund mentioned NVIDIA Corporation (NASDAQ: NVDA). Here is what the fund had to say:
“NVIDIA Corporation is a fabless semiconductor company and a leader in gaming cards and accelerated computing chips. Shares of NVIDIA rose in the second quarter on financial results and guidance significantly above Street expectations, as it benefited from the upgrade cycle in its gaming franchise along with continued AI-related strength driving its data center segment. NVIDIA’s total revenues of $5.66 billion beat Street expectations by $266 million, growing 84% (including the benefit of acquisitions, 65% organic), with its gaming business growing over 100% and its data center business expanding nearly 80%. We remain confident in NVIDIA’s leading position in gaming, data centers, and autonomous machines.”
9. Johnson & Johnson (NYSE: JNJ)
Number of Hedge Fund Holders: 88
Johnson & Johnson (NYSE: JNJ) is a New Jersey-based multinational corporation with products and services in pharmaceutical, consumer health, and medical devices. It is ranked ninth on our list of 12 best big stocks to invest in. The stock has returned over 17.04% to investors over the course of the past year.
At the end of the second quarter of 2021, 88 hedge funds in the database of Insider Monkey held stakes worth $7.06 billion in Johnson & Johnson (NYSE: JNJ), up from 81 the preceding quarter worth $6.91 billion.
Out of the hedge funds tracked by Insider Monkey, Fundsmith LLP has the most valuable stake in Johnson & Johnson (NYSE: JNJ) as of the end of the second quarter of 2021, worth close to $1.18 billion, comprising 3.26% of its 13F portfolio.
8. JPMorgan Chase & Co. (NYSE: JPM)
Number of Hedge Fund Holders: 108
JPMorgan Chase & Co. (NYSE: JPM) is an American bank known for its various financial services and investment banking. It is the largest U.S. bank by total assets. It is ranked eighth on our list of 12 best big stocks to invest in. The stock has returned over 42% to investors over the course of the past year.
At the end of the second quarter of 2021, 108 hedge funds in the database of Insider Monkey held stakes worth $4.93 billion in JPMorgan Chase & Co. (NYSE: JPM).
Out of the hedge funds tracked by Insider Monkey, billionaire Ken Fisher’s Asset Management has the most valuable stake in JPMorgan Chase & Co. (NYSE: JPM) as of the end of the second quarter of 2021, worth around $1.07 billion, comprising 0.67% of its 13F portfolio. Fisher Asset Management’s stake increased by 4% during the second quarter of 2021.
7. Berkshire Hathaway Inc. (NYSE: BRK-B)
Number of Hedge Fund Holders: 116
Berkshire Hathaway Inc. (NYSE: BRK-B) is an American multinational holding company founded and managed by Warren Buffett, one of the most notable investors of all times.
At the end of the second quarter of 2021, 116 hedge funds in the database of Insider Monkey held stakes worth $22.38 billion in Berkshire Hathaway Inc. (NYSE: BRK-B), up from 111 the preceding quarter worth $19.9 billion.
In its Q1 2021 investor letter, Vltava Fund, an investment management firm, mentioned Berkshire Hathaway Inc. (NYSE: BRK-B). Here is what the firm had to say:
“Despite the considerable rise in stock markets over the past year, there are still many attractive opportunities. Human nature also is playing a bit into our hands. Investor crowds often chase popular stocks, hot IPOs, or mysterious SPACs and completely leave aside stocks they consider boring and not sexy enough. A typical example of this category is our long-term largest position in Berkshire Hathaway. Since we bought it for the first time, its price has nearly quadrupled and yet it remains just as undervalued today as it was at that time. Considering the current rate at which it is buying back its own shares and the amount of cash that Berkshire Hathaway has, my greatest wish as a shareholder is for the company’s share price to remain as low as possible for as long as possible.”
6. Apple Inc. (NASDAQ: AAPL)
Number of Hedge Fund Holders: 138
Apple Inc. (NASDAQ: AAPL) is an American multinational tech company focusing on consumer electronics and software – known for its products such as iPhone, iOS and MacOS operating systems as well as iCloud and Apple TV. The stock has returned over 30% to investors over the course of the past year.
Out of the hedge funds tracked by Insider Monkey, billionaire Warren Buffett’s Berkshire Hathaway has the most valuable stake in Apple Inc. (NASDAQ: AAPL) as of the end of the second quarter of 2021, worth close to $121.50 billion, comprising 41.46% of its 13F portfolio.
5. Visa Inc. (NYSE: V)
Number of Hedge Fund Holders: 162
Visa Inc. (NYSE: V) is an American financial services corporation providing electronic funds transfers across the globe. It is ranked fifth on our list of 12 best big stocks to invest in.
At the end of the second quarter of 2021, 162 hedge funds in the database of Insider Monkey held stakes worth $27.61 billion in Visa Inc. (NYSE: V).
Out of the hedge funds tracked by Insider Monkey, billionaire Ken Fisher’s Fisher Asset Management has the most valuable stake in Visa Inc. (NYSE: V) as of the end of the second quarter of 2021, worth close to $5.53 billion, comprising 3.47% of its 13F portfolio. Fisher Asset Management’s stake in Visa Inc. (NYSE: V) increased by 4% during the second quarter of 2021.
4. Alphabet Inc. (NASDAQ: GOOGL)
Number of Hedge Fund Holders: 190
Alphabet Inc. (NASDAQ: GOOGL) is a California-based American multinational tech company known previously as Google. Its notable products and services include the search engine Google Search, video sharing website YouTube and cloud computing service called Google Cloud Platform. It is ranked fourth on our list of 12 best big stocks to invest in. The stock has returned over 76.36% to investors over the course of the past year.
At the end of the second quarter of 2021, 190 hedge funds in the database of Insider Monkey held stakes worth $26.83 billion in Alphabet Inc. (NASDAQ: GOOGL), up from 185 the preceding quarter worth $24.57 billion.
In its Q2 2021 investor letter, Alger Spectra Fund, the fund by the investment management firm Alger, mentioned Alphabet Inc. (NASDAQ: GOOGL). Here is what the fund had to say:
“Alphabet Inc. was among the top contributors to performance. Alphabet’s Google is a leading search engine, which has allowed the company to become a beneficiary of the shift of advertising dollars from traditional mediums like television, radio and newspapers to digital platforms. The company is also a leader in implementing artificial intelligence and developing autonomous vehicles and owns the highly trafficked YouTube service. Alphabet contributed to performance due to a strong quarterly report that was highlighted by a meaningful acceleration in advertising revenues reflecting a robust, broad-based demand environment with notable strength in retail and improvement in travel-related businesses. Profitability was also better than expected as the revenue growth exceeded the rate at which costs for staffing, office expenses, travel and entertainment increased.”
3. Microsoft Corporation (NASDAQ: MSFT)
Number of Hedge Fund Holders: 238
Microsoft Corporation (NASDAQ: MSFT) is an American multinational tech corporation known for its computer operating system, software packages as well as products and services such as Azure and LinkedIn. It is ranked third on our list of 12 best big stocks to invest in. The stock has returned over 60% to investors over the course of the past year.
At the end of the second quarter of 2021, 238 hedge funds in the database of Insider Monkey held stakes worth $62.47 billion in Microsoft Corporation (NASDAQ: MSFT).
In its Q2 investor letter, Baron Opportunity Fund mentioned Microsoft Corporation (NASDAQ: MSFT). Here is what the fund had to say:
“Shares of Microsoft Corporation, a cloud-software leader and provider of software productivity tools and infrastructure, rose during the quarter following a strong earnings report highlighting solid demand for its broad product stack and continued momentum migrating its business to the cloud. Microsoft was a top contributor in the period because it trades at reasonable free cash flow and earnings valuations, has cloud and digital transformation tailwinds at its back, reported a solid March quarter, and beat Street expectations by a wide margin. Microsoft’s results continued to be strong across the board, with Azure cloud computing revenues up 46% in constant currency (“cc”) terms and commercial cloud bookings growth of 38% cc, the best in years. Microsoft also reported robust profitability growth, with operating income expanding 31% and GAAP earnings up 45%. We believe the company is well positioned for continued solid growth and profitability through market share gains as more companies look to transform and digitize their businesses as they move operations to the cloud.”
2. Facebook, Inc. (NASDAQ: FB)
Number of Hedge Fund Holders: 266
Facebook, Inc. (NASDAQ: FB) is a California-based tech company known primarily for its social networking platforms such as Facebook, Instagram, Messenger, and WhatsApp.
Out of the hedge funds tracked by Insider Monkey, Eagle Capital Management had the most valuable in Facebook, Inc. (NASDAQ: FB) as of the end of the second quarter of 2021, worth close to $2.58 billion, comprising 7.37% of its 13F portfolio. Eagle Capital Management’s stake in Facebook, Inc. (NASDAQ: FB) increased by 7% during the second quarter of 2021.
In its Q2 2021 investor letter, Polen Capital, an investment management firm, mentioned Facebook, Inc. (NASDAQ: FB). Here is what the firm had to say:
“Facebook was the top contributor to our return for the second consecutive quarter. The company has over $1 trillion market capitalizations. Yet, based on first quarter 2021 results, FB is currently still growing revenue at over 30% organically! In fact, last quarter Facebook grew revenue 48% year over year. Facebook has generated earnings and intrinsic value growth for many years, driven largely by the mostly free services the company provide to people who can easily choose to stop using them and spend their time elsewhere.
That said, we are regularly asked about the perceived high regulatory risk around Facebook. We examine risks to businesses and, in particular, regulatory risks through a lens of risk exposure versus actual risk. For instance, the antitrust complaints globally against Facebook based on their size, influence, and strong competitive positioning, definitionally exposes these companies to more regulatory risk than much smaller businesses. However, we do not believe risk exposure is the same as actual risk…”
1. Amazon.com, Inc. (NASDAQ: AMZN)
Number of Hedge Fund Holders: 271
Amazon.com, Inc. (NASDAQ: AMZN) is a Seattle, Washington-based multinational corporation known primarily for its e-commerce business and its cloud computing service called Amazon Web Services. It is ranked first on our list of 12 best big stocks to invest in.
At the end of the second quarter of 2021, 271 hedge funds in the database of Insider Monkey held stakes worth $60.49 billion in Amazon.com, Inc. (NASDAQ: AMZN), up from 243 the preceding quarter worth $50.42 billion.
Out of the hedge funds tracked by Insider Monkey, billionaire Ken Fisher’s Fisher Asset Management had the most valuable stake in Amazon.com, Inc. (NASDAQ: AMZN) as of the end of the second quarter of 2021, worth close to $6.45 billion, comprising 4.05% of its 13F portfolio. Fisher Asset Management’s stake increased by 4% during the second quarter of 2021.
In its Q2 2021 investor letter, L1 Capital, an investment management firm, mentioned Amazon.com, Inc. (NASDAQ: AMZN). Here is what the firm had to say:
“Amazon flipped from being the largest detractor from portfolio performance in the March 2021 quarter, to one of the leading contributors in the June 2021 quarter. We took advantage of negative near-term sentiment in the March 2021 quarter to add to our Amazon investment. We continue to view Amazon as one of the best positioned businesses globally, with its share price still not reflecting fair value.”
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Disclosure: None. 12 Best Big Stocks To Invest In is originally published on Insider Monkey.
