In this article, we will examine the 12 Best ESG stocks to Buy Now According to Hedge Funds.
Does ESG deliver real value, or is it just a marketing ploy? That question has haunted Environmental, Social, and Governance (ESG) investing since the acronym first entered Wall Street’s vocabulary. Once promoted as the future of capital markets, ESG investing has been praised as a driver of corporate change and criticized as a public relations exercise.
Despite the political backlash and constant debate, the concept of aligning capital with broader values has endured and continues to shape how investors think about risk and return.
Capital flows tell their own story. Reviewing Morningstar’s Q2 2025 Global Sustainable Fund Flow Report, it appears that investor appetite for sustainability remains intact despite political headwinds and regulatory scrutiny.
According to the report, global sustainable funds posted $4.9 billion in net inflows, reversing the heavy outflows of the previous quarter. Total assets in Global sustainable funds reached $3.5 trillion, with rising equity markets providing additional support.
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Regionally, Europe led the recovery in Q2 with $8.6 billion of net new money, while the U.S. recorded its 11th consecutive quarter of outflows at $5.7 billion, reflecting a more cautious investor base.
As per the Morningstar report, a key reason why U.S. investors are showing less interest in sustainable funds is the growing political pushback against ESG. The Trump administration has amplified this trend, rolling out measures since January that scale back or challenge climate and ESG-related policies.
Even so, the stock market remains on the upswing, offering investors a broad set of opportunities. Reinforcing this view, on September 11, Rich Saperstein, CIO and founding principal of Treasury Partners, told CNBC that the current backdrop continues to support the equity market. He pointed to moderating inflation, accommodative Fed policy, solid GDP growth, and healthy earnings as reasons why stocks remain appealing at record levels.
He believes deregulation, tax policy, and permitting reforms further strengthen the investment climate, which justifies keeping clients fully invested. Saperstein acknowledged that valuations are somewhat stretched, with market gains slightly outpacing earnings growth over the past five years, but said equities remain the best asset class to own.
With ESG investing now more established, the focus has moved away from broad themes toward companies that can show measurable benefits from incorporating ESG into their business models. The 12 stocks highlighted below fit that description, offering exposure to sustainability without losing focus on financial performance.
Given this backdrop, let’s turn to our selection of the 12 best ESG stocks to buy now, according to hedge funds.
Photo by Christian Lue on Unsplash
Our Methodology
To identify the best ESG stocks according to hedge funds, we first reviewed holdings of prominent ESG-focused ETFs managed by BlackRock and Vanguard. From these funds, we shortlisted 20 stocks with the highest weightings. We then used Q2 2025 data from Insider Monkey’s database to determine hedge fund ownership and narrowed the list to the 12 most widely held names. Finally, the stocks are ranked in ascending order based on the number of hedge funds holding a position.
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).
Note: All pricing data is as of market close on September 11, 2025.
12 Best ESG Stocks to Buy Now According to Hedge Funds
12. Tesla Inc. (NASDAQ:TSLA)
Market Cap: $1.2 Trillion
Number of Hedge Fund Holders: 115
Tesla Inc. (NASDAQ:TSLA) is one of the best ESG stocks to buy now according to hedge funds. On September 9, Adam Jonas, an analyst at Morgan Stanley, reaffirmed a Buy rating on Tesla with an unchanged price target of $410. The analyst believes that Tesla Inc. (NASDAQ:TSLA) has pioneered innovations in the electric vehicle industry, spurring the global shift to sustainable energy. These innovations have enabled the company to maintain its leadership in this transition and the industry.
Jonas emphasized Tesla Inc.’s (NASDAQ:TSLA) progress in battery technology and autonomous driving, noting these capabilities as competitive advantages that could support long-term growth. He also highlighted the company’s global expansion and its efficiency in scaling production, which together strengthen the case for greater market share.
Tesla Inc.’s (NASDAQ:TSLA) strong brand identity and loyal customer base add further weight to the positive outlook. In Jonas’s view, the combination of innovation, operational execution, and favorable market conditions for EV adoption continues to justify a bullish stance on the stock.
Tesla Inc. (NASDAQ:TSLA) is an EV manufacturer and clean energy company known for its innovative solutions to sustainable transportation and energy solutions.
11. Eli Lilly and Co. (NYSE:LLY)
Market Cap: $680 Billion
Number of Hedge Fund Holders: 119
Eli Lilly and Co. (NYSE:LLY) is one of the best ESG stocks to buy now according to hedge funds. On September 9, Bank of America’s Tim Anderson reiterated a Buy rating on Eli Lilly & Co. (NYSE:LLY) and a $900 price target. The analyst highlighted the company’s strong market position in the obesity drug market as a key driver of future growth.
Anderson made a case for Eli Lilly and Co.’s (NYSE:LLY) portfolio after the recent update from the Institute for Clinical and Economic Review. The institute now believes that GLP-1 therapies, including those developed by Eli Lilly, are cost-effective for treating obesity. This marks a notable change from earlier views and strengthens the case that these therapies deliver meaningful clinical and economic benefits.
By broadening its assessment to include obesity-related outcomes and quality-of-life improvements, the ICER report further supports the value proposition of Eli Lilly and Co.’s (NYSE:LLY) drugs.
Although reimbursement challenges persist, the ICER findings may help expand coverage and payer acceptance over time. Anderson added that Eli Lilly’s strong pipeline, above-peer revenue growth forecasts, and leadership in obesity treatments underpin his positive outlook and continue to justify the Buy rating.
Eli Lilly and Company (NYSE:LLY) is a global pharmaceutical company focused on the development, manufacture, and marketing of medicines for diabetes, oncology, immunology, and neuroscience.
10. JPMorgan Chase & Co. (NYSE:JPM)
Market Cap: $837 Billion
Number of Hedge Fund Holders: 124
JPMorgan Chase & Co. (NYSE:JPM) is one of the best ESG stocks to buy now according to hedge funds. On September 10, Keefe, Bruyette & Woods reaffirmed an Outperform rating on JPMorgan Chase & Co. (NYSE:JPM), keeping its $330 price target unchanged, following the bank’s latest capital markets update.
Analyst Christopher McGratty described the update as constructive, noting stronger-than-expected trends in Investment Banking and Markets revenue.
KBW estimated that the performance could add roughly $0.17 per share to its Q3 2025 forecast and about $0.25 per share to consensus expectations, although variable costs may reduce the net benefit by half. Even so, the update increases the confidence in JPMorgan’s earnings momentum.
McGratty highlighted the bank’s advantages of scale, consistency, and regulatory tailwinds as supportive factors for its positive outlook. Management, meanwhile, reiterated a balanced stance on acquisitions, signaling no pressing need for inorganic growth. Together, these factors underpin KBW’s view that JPMorgan remains well-positioned to deliver solid results.
JPMorgan Chase & Co. (NYSE:JPM) is a financial services firm that provides banking, investment, and asset management services to individuals, businesses, governments, and institutions worldwide.
9. Oracle Corp. (NYSE:ORCL)
Market Cap: $889 Billion
Number of Hedge Fund Holders: 124
Oracle Corp. (NYSE:ORCL) is one of the best ESG stocks to buy now according to hedge funds. On September 10, Goldman Sachs analyst Tyler Radke upgraded Oracle Corp. (NYSE:ORCL) to Buy, raising the price target to $410 from $240, following what he described as a “historic” first quarter of fiscal 2026.
Radke cited accelerating demand for Oracle’s cloud services and stronger-than-expected bookings, which strengthened confidence in the company’s AI-driven growth strategy. He also highlighted steady gains in the adoption of Oracle Corp.’s (NYSE: ORCL) cloud database products, which are a cornerstone of its long-term business strategy.
He added that profitability concerns eased after management guided to mid-teens EBIT growth for fiscal 2026. Combined with the robust bookings performance, this outlook supports Radke’s view that Oracle Corp. (NYSE:ORCL) is entering a stronger growth phase and justifies the upgrade to Buy.
Oracle Corp. (NYSE:ORCL) offers an extensive suite of database and cloud computing software and hardware. The Company offers databases and relational servers, application development and decision support tools, as well as enterprise business applications.
8. Netflix Inc. (NASDAQ:NFLX)
Market Cap: $517 Billion
Number of Hedge Fund Holders: 133
Netflix Inc. (NASDAQ:NFLX) is one of the best ESG stocks to buy now according to hedge funds. On September 2, Bernstein analyst Laurent Yoon reiterated a Buy rating on Netflix (NASDAQ:NFLX) with an unchanged price target of $1,390.
Yoon said Netflix’s Q2 numbers and guidance were uneven, but the stock held up because of its market strength and investor fear of missing further gains. He also pointed out that subscriber growth usually improves later in the year as new shows are released and marketing efforts increase.
He believes these seasonal tailwinds, combined with Netflix’s large audience and pricing leverage, should lift both revenue and margins. Near-term softness, he added, could give investors an attractive entry point. That said, the longer-term growth outlook continues to justify an Outperform rating.
Netflix Inc. (NASDAQ:NFLX) is a global streaming entertainment service that offers a diverse array of movies, TV shows, games, and more, with unlimited viewing on internet-connected devices.
7. Apple Inc. (NASDAQ:AAPL)
Market Cap: $3.4 Trillion
Number of Hedge Fund Holders: 156
Apple Inc. (NASDAQ:AAPL) is one of the best ESG stocks to buy now according to hedge funds. On September 10, Bank of America Securities analyst Wamsi Mohan reiterated a Buy rating on Apple (NASDAQ:AAPL) and raised the firm’s price target to $270 from $260.
Mohan pointed to Apple’s latest iPhone launch event as a catalyst, highlighting upgrades such as enhanced health monitoring, improved cameras, and new AI-powered features. The analyst emphasized that Apple Inc.’s (NASDAQ:AAPL) silicon and AI hardware roadmap strengthens its ability to deliver AI at the edge, while higher base storage and the rollout of in-house modem and networking chips support better gross margin.
With updated products such as the iPhone, Apple Watch, and AirPods, Apple Inc. (NASDAQ:AAPL) is well-positioned to benefit from the growing demand for connected devices. Mohan also raised his earnings forecasts along with the higher target, reflecting confidence in the company’s growth outlook.
Apple Inc. (NASDAQ:AAPL) designs, manufactures, and markets innovative products, including the iPhone, iPad, Mac computers, Apple Watch, and Apple TV. The company also offers a range of software and services, such as the iOS and macOS operating systems, iCloud, advertising, payment services, Apple Music, and the App Store.
6. Broadcom Inc. (NASDAQ:AVGO)
Market Cap: $1.7 Trillion
Number of Hedge Fund Holders: 156
Broadcom Inc. (NASDAQ:AVGO) is one of the best ESG stocks to buy now according to hedge funds. On September 11, Susquehanna analyst Christopher Rolland reiterated a Buy rating on Broadcom (NASDAQ:AVGO) with a $400 price target.
Rolland pointed to Broadcom’s move into rack-level AI solutions, which he believes could open new revenue streams and meaningfully boost profitability. This step also places the company in more direct competition with NVIDIA and AMD, thereby raising confidence in its ability to capture a larger share of the AI spending market.
He further highlighted that the CEO’s new performance-based award is tied to aggressive AI growth targets, with a compound annual growth rate (CAGR) of over 20%-30 %, underscoring management’s focus on execution. Although the loss of the Wi-Fi/BT chip business in Apple’s new iPhone lineup may weigh on near-term sales, Rolland emphasized that the company’s AI roadmap is the more powerful long-term driver, justifying his bullish stance.
Broadcom Inc. (NASDAQ:AVGO) is a global technology company that designs, develops, and supplies a wide range of semiconductor and infrastructure software solutions.
5. Alphabet Inc. (NASDAQ:GOOGL)
Market Cap: $2.9 Trillion
Number of Hedge Fund Holders (GOOGL): 219
Number of Hedge Fund Holders (GOOG): 178
Alphabet Inc. (NASDAQ:GOOGL) is one of the best ESG stocks to buy now according to hedge funds. On September 10, Goldman Sachs analyst Eric Sheridan maintained a Buy rating on Alphabet Inc. (NASDAQ:GOOGL) with an unchanged price target of $234.
Sheridan highlighted Alphabet’s strength in cloud and AI as central to its growth outlook. He argues that enterprises are increasingly adopting AI-based cloud tools to bolster their workflows, and the company should be able to capitalize on this demand through its wide portfolio of cloud services. This demand thus indicates a growing migration pipeline, implying strong growth for Alphabet Inc. (NASDAQ:GOOGL). The analyst also emphasized the company’s scalable, cost-efficient AI systems and diversified revenue base, with 13 product lines each generating more than $1 billion annually.
The analyst also believes that Alphabet Inc.’s (NASDAQ:GOOGL) efforts to broaden enterprise access to a broad portfolio of AI models reinforce its positioning as a long-term growth leader in large-cap tech.
Alphabet Inc. (NASDAQ:GOOGL) is the parent company of Google and a pioneer in internet-related services and products, including online advertising technologies, search engines, cloud computing, software, and hardware.
4. Nvidia Corp. (NASDAQ:NVDA)
Market Cap: $4.3 Trillion
Number of Hedge Fund Holders: 235
Nvidia Corp. (NASDAQ:NVDA) is one of the best ESG stocks to buy now according to hedge funds. On September 11, Reuters reported that Alibaba Group (NYSE:BABA) and Baidu (NASDAQ:BIDU) have begun training certain AI models on internally designed chips, marking a shift away from complete reliance on Nvidia processors.
According to the news portal The Information, Alibaba has been using its own chips for smaller models since early this year, while Baidu is testing its Kunlun P800 chip to train new versions of its Ernie AI model. Both firms, however, continue to depend on Nvidia Corp. (NASDAQ:NVDA) hardware for their most advanced workloads.
The move reflects Beijing’s push for Chinese companies to rely more on domestic technology as U.S. export limits increase. For Nvidia, however, the near-term effect is minimal, since demand for its GPUs, especially in data centers, still outpaces supply.
Most analysts maintain a Buy or equivalent rating on the stock, highlighting Nvidia’s strong positioning in global AI infrastructure despite rising competition.
As a reflection of this broader optimism, an analyst from DA Davidson upgraded Nvidia (NASDAQ:NVDA) to Buy from Neutral on September 11, raising its price target to $210 from $195. The analyst pointed to its “increasingly optimistic view” on AI compute demand, arguing this secular trend will sustain growth into next year and beyond, outweighing competitive risks.
Nvidia Corp. (NASDAQ:NVDA) designs and manufactures graphics processing units (GPUs), system-on-a-chip units (SoCs), and AI hardware and software.
3. Meta Platforms Inc. (NASDAQ:META)
Market Cap: $1.9 Trillion
Number of Hedge Fund Holders: 260
Meta Platforms Inc. (NASDAQ:META) is one of the best ESG stocks to buy now according to hedge funds. On September 9, Goldman Sachs analyst Eric Sheridan reiterated a Buy rating on Meta Platforms (NASDAQ:META) with an unchanged price target of $830, citing improving advertising momentum and longer-term AI opportunities.
Sheridan emphasized that Meta is using artificial intelligence and machine learning to optimize ad supply and demand. Not only that, it is boosting engagement through enhanced ranking and recommendation engines across Facebook and Instagram. He also noted the company’s parallel push into broader AI initiatives, including Meta AI and Reality Labs, which could create additional growth avenues beyond advertising.
The analyst also highlighted that Meta’s ability to balance heavy investment in innovation with consistent operating performance also underpins his confidence in the company’s outlook.
Meta Platforms Inc. (NASDAQ:META) operates major social media services, including Facebook, Instagram, WhatsApp, Messenger, and Threads, along with virtual reality products like Oculus headsets.
2. Microsoft Corp. (NASDAQ:MSFT)
Market Cap: $3.7 Trillion
Number of Hedge Fund Holders: 294
Microsoft Corp. (NASDAQ:MSFT) is one of the best ESG stocks to buy now according to hedge funds. On September 12, Bloomberg reported that OpenAI is close to finalizing a governance overhaul that would convert it into a more conventional for-profit structure, while granting its nonprofit arm an equity stake of at least $100 billion. Bret Taylor, Chairman of OpenAI’s board, stated that the nonprofit will maintain controlling authority through a new public benefit corporation, ensuring oversight of OpenAI’s long-term mission.
The stake, which could grow beyond the $100 billion floor, would translate into roughly 20% ownership if the company proceeds with an employee share sale valuing OpenAI at $500 billion. That transaction would cement its status as the world’s most valuable startup.
The move follows months of negotiations with Microsoft, OpenAI’s largest backer, whose approval was critical to advancing the restructuring. For Microsoft, the deal preserves deep integration rights for OpenAI’s tools and helped ease investor concerns, with a positive reaction to share prices.
The story gained prominence in early May when OpenAI discussed its plans to restructure its for-profit division as a public benefit corporation. Given the implications for both OpenAI and Microsoft, we highlighted the development in our June 24 article, Harvard University Stock Portfolio: Top 10 Stock Picks.
Microsoft Corporation (NASDAQ:MSFT) develops and sells a wide range of software, cloud services, devices, and business solutions, serving both individual users and enterprise customers worldwide.
1. Amazon.com Inc. (NASDAQ:AMZN)
Market Cap: $2.5 Trillion
Number of Hedge Fund Holders: 335
Amazon.com Inc. (NASDAQ:AMZN) is one of the best ESG stocks to buy now according to hedge funds. On September 11, Jefferies analyst James Heaney reaffirmed a Buy rating on Amazon (NASDAQ:AMZN) with a $265 price target. The call followed a series of bullish updates, including Bank of America’s Justin Post, who maintained a Buy rating the same day with a $272 target, and Morgan Stanley’s Brian Nowak, who on September 8 restated his Buy rating with a $300 target.
Nowak’s target is closer to the consensus high of $306, and the higher valuation reflects particular confidence in Amazon’s push into the $600 billion U.S. fresh and perishable grocery market. The analyst sees this initiative as a potential catalyst for accelerating U.S. Gross Merchandise Volume growth, even with modest market share gains.
He believes that Amazon.com Inc.’s (NASDAQ:AMZN) logistics and fulfillment network provides it with a strong base to scale delivery services very efficiently. On the other hand, the higher-margin grocery baskets and stronger basket economics add to the profitability case. Taken together, these developments underpin the bullish stance and reinforce Amazon’s long-term growth potential.
In an effort to expand its global footprint, Amazon.com Inc. (NASDAQ:AMZN) announced the acquisition of a stake in Colombian delivery company Rappi Inc., as reported by Bloomberg on September 9. The report also states that the deal is structured in a way that allows Amazon to acquire up to 12% of Rappi based on specific milestones. This deal empowers Amazon to compete much more effectively in the Latin American quick commerce space.
Amazon.com Inc. (NASDAQ:AMZN) operates across e-commerce, digital content, advertising, and cloud computing. Its online and offline stores offer both in-house and third-party products, while its Amazon Web Services (AWS) division runs one of the world’s largest data centers and cloud computing networks.
While we acknowledge the potential of AMZN as an investment, 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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