In this article, we will take a look at the 13 Best Roth IRA Stocks to Buy Now.
A Roth IRA, or individual retirement account, is a tax-advantaged way to save for retirement and is not tied to an employer plan like a 401(k). The account is opened directly with a financial provider. The individual sets up contributions and decides how the money is invested, whether by choosing assets personally or working with an investment manager. The control sits with the account holder.
Roth IRAs are not only for people close to retirement. Younger investors are opening them in growing numbers. A 2025 report by the Wall Street Journal noted that many young savers are turning to Roth IRAs after hearing consistent advice from parents, workplace financial coaches, and tax professionals. The logic is straightforward. The earlier the money goes in, the more time it has to grow without future tax burdens.
As tax day approaches, many savers rush to make last-minute contributions. They want to max out their individual retirement accounts before the deadline passes. It is a familiar pattern each year. The Investment Company Institute reported that Americans held $13.6 trillion in individual retirement accounts at year-end 2023. Of that total, $1.4 trillion was in Roth IRAs. About 43% of IRA assets, or $5.8 trillion, were invested in mutual funds.IRAs are owned by people across age groups. Still, Roth IRA investors tend to skew younger. At year-end 2020, 34% of Roth IRA investors were under 40. Only 17% of traditional IRA investors fell into that age group.
Given this, we will take a look at some of the best Roth IRA stocks to invest in.
Our Methodology:
For this list, we screened for companies that have long-term growth catalysts, dividend growth history, solid business fundamentals, and positive analyst coverage. Next, we picked 13 companies that were most popular among hedge fund investors, as per Insider Monkey’s database of Q 2025. The stocks are ranked according to the number of hedge funds investing in them.
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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
13. PepsiCo, Inc. (NASDAQ:PEP)
Number of Hedge Fund Holders: 68
On February 5, Barclays lifted its price target on PepsiCo, Inc. (NASDAQ:PEP) to $160 from $148 and kept an Equal Weight rating. The change came after the company’s latest earnings report, with the firm adjusting its model to reflect the updated numbers.
On the Q4 2025 call, CEO Ramon Laguarta laid out what he framed as a clear plan to reignite category growth. A big part of that plan centers on affordability. He made it clear the company is leaning in, especially for low- and middle-income consumers. Management is targeting specific brands, pack sizes, and sales channels where sharper pricing can make the most difference.
Laguarta said the company has already tested these moves at scale in several markets. Those trials produced solid returns. That track record is giving management the confidence to expand the effort. He also noted that these pricing steps sit on top of the shelf space gains PepsiCo is already winning through closer ties with retailers.
He then turned to brand momentum and highlighted that Gatorade and Quaker are in the middle of broader restaging efforts. Lay’s and Tostitos have already rolled out early-year updates. Bigger marketing pushes for Gatorade and Quaker are scheduled for later this year.
CFO Stephen Schmitt struck a similar tone. He described the company as playing offense. In his view, the current initiatives should help lift both volumes and overall sales. Importantly, he stressed that the added spending is not a surprise. It is already built into guidance and supported by productivity gains that help fund these investments.
PepsiCo, Inc. (NASDAQ:PEP) operates across beverages, snacks, and food in North America and overseas markets. The latest strategy signals a company that is paying closer attention to shifting consumer behavior.
12. Cisco Systems, Inc. (NASDAQ:CSCO)
Number of Hedge Fund Holders: 74
On February 10, Cisco Systems, Inc. (NASDAQ:CSCO) introduced a new chip and router built to accelerate data movement inside large data centers. The launch positions the company to compete with Broadcom and Nvidia for a share of the projected $600 billion AI infrastructure spending cycle.
The new Silicon One G300 switch chip is expected to go on sale in the second half of the year. Cisco said the chip is designed to improve communication between the processors that train and run AI systems, even when operating across hundreds of thousands of connections.
The G300 will be manufactured using Taiwan Semiconductor Manufacturing Co.’s 3-nanometer process technology. It includes new “shock absorber” features intended to prevent AI chip networks from slowing down during sudden spikes in data traffic. Martin Lund, executive vice president of Cisco’s common hardware group, said in an interview that such traffic surges occur regularly at large scale.
Cisco expects the chip to help certain AI computing tasks complete 28% faster. Part of that improvement comes from the chip’s ability to automatically reroute data around network issues within microseconds. Lund noted that the company is focused on improving overall end-to-end network efficiency.
Cisco Systems, Inc. (NASDAQ:CSCO) designs and sells technologies that support the internet. The company integrates its offerings across networking, security, collaboration, applications, and cloud.
11. Honeywell International Inc. (NASDAQ:HON)
Number of Hedge Fund Holders: 76
On February 3, Jefferies raised its price recommendation on Honeywell International Inc. (NASDAQ:HON) to $240 from $220. It maintained a Hold rating on the stock. The firm described the quarter as solid, noting 6% organic growth and 2026 organic growth guidance of 3% to 6%, which was largely in line with expectations.
During the Q4 2025 earnings call, Chairman and CEO Vimal Kapur said the company finished the year with strong results. Adjusted sales and adjusted EPS both exceeded expectations, and orders increased 23%. Backlog rose to more than $37 billion, providing management with greater visibility into demand.
For 2026, Kapur said Honeywell is positioned for meaningful growth in both revenue and earnings. He linked that outlook to recent portfolio changes, ongoing investment in research and development, and the strength of the company’s backlog. He confirmed that the spin-off of Solstice Advanced Materials has been completed. The Aerospace spin is expected to close in the third quarter of 2026. As part of that process, Jim Currier will serve as President and CEO of Aerospace, Josh Jepsen as CFO, and Craig Arnold as Non-Executive Chair of the Board. Indra Nooyi has also joined Honeywell’s Board of Directors.
Kapur said the company has reorganized into four segments: Aerospace Technologies, Building Automation, Process Automation and Technology, and Industrial Automation. The intent is to simplify operations and improve internal alignment. Honeywell also plans to divest Productivity Solutions and Services and Warehouse and Workflow Solutions in the first half of 2026.
He also highlighted developments at Quantinuum. The business raised approximately $840 million at a $10 billion valuation, introduced its Helios quantum computer, and expanded partnerships with NVIDIA, JPMorgan, Amgen, and Mitsui, reflecting continued progress in quantum computing.
Honeywell International Inc. (NASDAQ:HON) operates across multiple industries and regions. Its portfolio is supported by the Honeywell Accelerator operating system and the Honeywell Forge platform, providing solutions across aerospace, building automation, industrial automation, process automation, and process technology.
10. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 78
On February 11, UBS lifted its price recommendation on The Coca-Cola Company (NYSE:KO) to $87 from $82. It reiterated a Buy rating on the stock. The analyst acknowledged that the quarter was more complex than usual but said the company’s core fundamentals remain steady. Coca-Cola reported its Q4 2025 results on February 10.
On the earnings call, Chairman and CEO James Quincey looked back at the four priorities he first laid out at CAGNY 2017. At the time, the company set out to reshape its brand portfolio around consumers, strengthen its operating system, digitize the organization, and make better use of its workforce. He pointed to the expansion of the portfolio, with several new $1 billion brands added over the years, bringing the total to 32 globally. He also addressed earnings momentum. After a long stretch where EPS hovered around $2, comparable EPS reached $3 in 2025. This came despite continued currency pressure, marking what he described as a meaningful shift in trajectory.
Henrique Braun, currently EVP and Chief Operating Officer and set to become CEO, spoke about the broader environment. He said 2025 was challenging externally, yet the company still delivered on the revenue and earnings guidance it issued at the start of the year. He also noted that Coca-Cola has now achieved 19 straight quarters of value share gains.
Braun highlighted growth in North America and the addition of new billion-dollar brands, including Santa Clara in Mexico. He referenced recent product launches such as Sprite Chill and Coca-Cola Holiday Creamy Vanilla as part of the company’s innovation pipeline. Looking ahead, he said management will focus on engaging younger adult consumers, increasing the pace of innovation, and embedding digital tools more deeply into consumer strategies.
President and CFO John Murphy outlined the quarterly results in detail. Organic revenue rose 5% in the fourth quarter, while unit case volume increased 1%. Concentrate sales exceeded unit case growth by three points, mainly due to shipment timing and the benefit of an extra reporting day. Comparable EPS came in at $0.58, up 6% year over year, despite a 5% currency headwind and a higher effective tax rate.
The Coca-Cola Company (NYSE:KO) operates across multiple regions, including Europe, the Middle East and Africa, Latin America, North America, and Asia Pacific. Its portfolio spans several beverage categories worldwide, including sparkling soft drinks such as Coca-Cola, Sprite, and Fanta.
9. McDonald’s Corporation (NYSE:MCD)
Number of Hedge Fund Holders: 83
On February 6, Mizuho raised its price recommendation on McDonald’s Corporation (NYSE:MCD) to $325 from $300. It maintained a Neutral rating on the stock. The firm pointed to stronger-than-expected fourth-quarter results as the reason for the increase. At the same time, the analyst cautioned that upside to 2026 estimates is not assured.
Reuters reported on February 11 that McDonald’s exceeded Wall Street expectations for fourth-quarter global comparable sales and profit. Meal deals and marketing promotions helped attract value-focused U.S. customers, while demand remained steady in Australia and Britain.
Global same-store sales rose 5.7% in the quarter ended December 31, ahead of the 3.7% increase analysts had projected, according to LSEG data. The company delivered growth at a time when many restaurant operators are facing weaker traffic as consumers limit spending .McDonald’s reported adjusted earnings of $3.12 per share, up 10.2% from $2.83 a year earlier and above the $3.05 analysts had expected.
In the US, comparable sales increased 6.8% in the October to December period. This marked the third straight quarter of growth, compared with a 1.4% decline a year earlier when demand was affected by an E. coli outbreak. Analysts had been looking for a 4.9% increase. Sales in International Operated Markets rose 5.2%, supported by performance in Britain, Germany, and Australia. In International Developmental Licensed Markets, sales climbed 4.5%, led by Japan. Revenue increased 10% to $7.01 billion, while net income rose 7% to $2.16 billion.
McDonald’s Corporation (NYSE:MCD) is a global foodservice retailer. It operates through three segments: US, International Operated Markets, and International Developmental Licensed Markets & Corporate. The US remains its largest market and is approximately 95% franchised.
8. Costco Wholesale Corporation (NASDAQ:COST)
Number of Hedge Fund Holders: 88
On February 9, Bernstein analyst Zhihan Ma raised the price target on Costco Wholesale Corporation (NASDAQ:COST) to $1,155 from $1,146 and maintained an Outperform rating. The firm said the fourth quarter places U.S. retail at a mixed point. Consumer sentiment remains soft, and food inflation has picked up again despite some easing in egg prices. At the same time, a shift away from growth and technology stocks has supported the retail sector so far this year. Bernstein also noted several macro factors that create uncertainty around FY26, including drug pricing, SNAP, tariff changes, tax refunds, and the possibility of a World Cup-related boost.
Earlier in the month, Costco reported its January sales figures. Total sales for the retail month increased 9.3% year over year. Comparable sales, which measure performance at locations open for more than a year, rose 7.1%. Excluding the effects of gasoline price changes and foreign exchange, comparable sales were up 6.4%.
Adjusted comparable sales growth accelerated from 6.2% in December to 6.4% in January. There is a possibility that severe winter storms in the US contributed to some of that strength. Even so, the overall trend shows that sales growth remains steady.
In its annual report, Costco defines digital sales as transactions initiated through a digital device, whether fulfilled through a warehouse or distribution center, along with sales from its Costco Travel platform. These digital channels are becoming more meaningful. In its 2025 annual report, the company disclosed that digital sales now represent 10% of total revenue.
Costco Wholesale Corporation (NASDAQ:COST) operates membership warehouses and e-commerce platforms offering nationally branded and private-label products across multiple categories. The company sources most of its merchandise directly from suppliers and distributes it either through cross-docking depots or directly to its warehouses.
7. Applied Materials, Inc. (NASDAQ:AMAT)
Number of Hedge Fund Holders: 89
On February 9, B. Riley raised its price recommendation on Applied Materials, Inc. (NASDAQ:AMAT) to $400 from $365. It reiterated a Buy rating on the stock. The firm said it expects strong fiscal first-quarter results, with performance likely coming in modestly above consensus estimates.
That same day, CNBC reported comments from Christopher Buchbinder of Capital Group. As lead portfolio manager of the Capital Group Dividend Value ETF, he focuses on companies with investment-grade credit ratings and a consistent record of paying income. Speaking about Applied Materials, Buchbinder made the following comment:
“We could see that there was an opportunity as the memory manufacturers would need to ramp up their investments to support the AI build out. You’re beginning to see signs of that. It hasn’t fully played out. We think this is a multi-year cycle that we’ll see develop.”
Applied Materials operates within a business model that tends to offer steadier growth. Building and expanding chip fabrication plants requires years of planning, and the equipment installed in those facilities needs ongoing servicing. That recurring service work provides an additional stream of revenue for the company.
As semiconductor production expands to meet rising demand tied to industrial automation, electric vehicles, and AI technologies, Applied Materials is positioned to grow alongside the broader industry. The company has also maintained strong operating profit margins and returns its free cash flow to shareholders through dividends and share repurchases.
Applied Materials, Inc. (NASDAQ:AMAT) is a materials engineering solutions provider serving the semiconductor, display, and related industries. It operates through three segments: Semiconductor Systems, Applied Global Services, and Display.
6. AbbVie Inc. (NYSE:ABBV)
Number of Hedge Fund Holders: 93
On February 5, Evercore ISI analyst Gavin Clark-Gartner trimmed his price recommendation on AbbVie Inc. (NYSE:ABBV) to $228 from $232. The analyst maintained an Outperform rating on the stock. In a note to investors, he said that despite Tremfya continuing to gain share, guidance and consensus expectations for 2026 still appear beatable, and the same applies to 2027. He also wrote that it is 2worth noting” that buy-side expectations have been running above consensus for some time, and that margin outperformance now appears more limited. In Evercore’s view, the stock’s pressure is more closely tied to questions around growth beyond 2028, particularly as additional competitors enter the market.
On February 4, AbbVie projected 2026 profit above Wall Street estimates after reporting fourth-quarter results that exceeded expectations. The earnings beat was driven largely by stronger-than-anticipated sales of its older immunology drug, Humira. Even so, the stock declined in morning trading that day as investors reacted to a revenue shortfall from Rinvoq, one of the company’s newer immunology treatments, raising concerns about the durability of its future growth drivers. AbbVie has been counting on Skyrizi and Rinvoq to offset the continued decline in Humira sales, which have been under pressure from lower-cost biosimilars. Humira had once been the world’s top-selling drug, reaching peak global sales of more than $21 billion in 2022 before losing U.S. patent protection.
In the fourth quarter, Skyrizi generated $5.01 billion in sales, ahead of the $4.82 billion analysts had expected. Rinvoq posted $2.37 billion, slightly below the $2.41 billion consensus estimate, according to LSEG data.AbbVie reported adjusted earnings of $2.71 per share for the quarter, exceeding the average analyst estimate of $2.65. The earnings outperformance was supported by Humira, which saw sales decline 25.9% year over year to $1.25 billion but still came in above expectations of $983.8 million. The drug is off patent and anticipated to continue declining.
Looking ahead, AbbVie expects Rinvoq and Skyrizi to generate approximately $31.6 billion combined in 2026, reaching its target of more than $31 billion in annual combined sales a year earlier than planned.
AbbVie Inc. (NYSE:ABBV) is a global research-based biopharmaceutical company engaged in the development, manufacturing, and commercialization of medicines. Its portfolio spans immunology, oncology, aesthetics, neuroscience, eye care, and other key therapeutic areas.
5. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 93
On February 4, Mizuho lifted its price recommendation on Exxon Mobil Corporation (NYSE:XOM) to $140 from $132. The firm reiterated a Neutral rating on the stock. The update followed the company’s Q4 report, which prompted the firm to revise its financial model.
Exxon posted $28.8 billion in earnings for 2025 and generated $52 billion in operating cash flow. Those figures once again placed it at the top of the industry. Since 2019, earnings per share have grown at a 21% compound annual rate, while operating cash flow has increased at a 10% annual pace. For a company of Exxon’s size, that kind of growth stands out.
Production has been a big part of the story. The company reached 4.7 million barrels of oil equivalent per day, the highest output level in more than four decades. Records were set in the Permian Basin and offshore Guyana, where Exxon has concentrated capital on high-margin barrels. Years of steady investment in these regions are now showing up clearly in the numbers.
Cost discipline also played a role. Exxon delivered $3 billion in structural savings last year, bringing total savings since 2019 to $15.1 billion. Management noted that this exceeds the combined total achieved by other international oil companies over the same period.
Exxon Mobil Corporation (NYSE:XOM) remains one of the largest integrated energy players globally. Its operations stretch across oil and gas exploration, production, and refining. The company also produces fuels, petrochemicals, lubricants, and specialty plastics, while allocating capital toward lower-emission businesses such as carbon capture and lithium development.
4. Walmart Inc. (NASDAQ:WMT)
Number of Hedge Fund Holders: 104
On February 9, Oppenheimer analyst Rupesh Parikh increased his price recommendation on Walmart Inc. (NASDAQ:WMT) to $140 from $125 and maintained an Outperform rating ahead of the company’s quarterly results. The firm raised its Q4 EPS estimate toward the upper end of management’s guidance, citing expectations for a strong holiday season, steady top-line momentum across the business, and possible support from favorable weather. Looking to fiscal 2026, Oppenheimer expects management to “only” guide in line with its long-term framework of 4% sales growth and 4% to 8% operating income growth. That outlook would fall short of the current Street expectation for 11.3% operating income growth. As a result, the firm believes it would be positioned to take advantage of any pullback in the stock rather than rely on a near-term upside catalyst. Walmart remains a top pick at Oppenheimer.
On February 3, Walmart became the first retailer to reach a $1 trillion market valuation. The milestone followed a year-long rally that pushed shares up nearly 26%, placing the company alongside large technology names such as Nvidia and Alphabet. The company’s performance reflects its ability to appeal to a broad customer base. Walmart has attracted higher-income shoppers looking for value and convenience while continuing to serve its traditional lower-income customers. Over the past decade, the stock has gained 476%, compared with a 269.2% increase for the S&P 500. That outperformance has been tied in part to its ability to balance both segments of consumers.
Over the last five years, Walmart expanded its online marketplace to more than half a billion items, introduced one-hour delivery, launched Walmart+ to compete with Amazon Prime, and built a $4 billion advertising business that has supported margins.
The company also invested heavily in artificial intelligence. It directed billions toward supply chain automation to improve fresh inventory management, speed up delivery times, and refine forecasting and search capabilities. Those efforts have contributed to 15 consecutive quarters of U.S. same-store sales outperformance, based on LSEG estimates. Investor confidence in Walmart’s AI strategy has added momentum to the stock as more consumers shift grocery purchases online.
Walmart Inc. (NASDAQ:WMT) operates as a technology-enabled omnichannel retailer. It runs retail and wholesale stores, clubs, e-commerce platforms, and mobile applications across the US, Africa, Canada, Central America, Chile, China, India, and Mexico. The company reports results through three segments: Walmart US, Walmart International, and Sam’s Club US.
3. S&P Global Inc. (NYSE:SPGI)
Number of Hedge Fund Holders: 110
On February 11, Evercore ISI analyst David Motemaden trimmed his price recommendation on S&P Global Inc. (NYSE:SPGI) to $625 from $632. The firm maintained an Outperform rating on the stock. The adjustment followed the company’s latest quarterly results, which led the firm to revisit its estimates.
On the earnings call, Martina Cheung, President, CEO, and Director, pointed to what she described as strong revenue growth, meaningful margin expansion, and 14% growth in EPS for Q4 2025. She said every division delivered revenue within or above its initial guidance range. Margins also landed at or above the high end of expectations. In her view, that performance reflected steady execution across the business rather than a one-off boost from any single segment.
Cheung also walked through the company’s strategic progress. She highlighted developments in private markets, continued expansion in energy-related offerings, and ongoing investment in AI capabilities. The integration of With Intelligence, the launch of private equity benchmarks, and partnerships with Cambridge Associates and Mercer were presented as steps that strengthened the firm’s competitive position.
Looking ahead, she outlined three priorities: reinforcing market leadership, moving deeper into high-growth adjacencies such as private markets and decentralized finance, and enhancing enterprise-wide capabilities. She stressed that more than 95% of revenue is tied to proprietary benchmarks, differentiated datasets, and mission-critical workflow tools, and said management expects that percentage to increase over time.
S&P Global Inc. (NYSE:SPGI) operates as a provider of financial intelligence and data. Its business is organized into five segments: Market Intelligence, Ratings, Commodity Insights, Mobility, and S&P Dow Jones Indices.
2. Eli Lilly and Company (NYSE:LLY)
Number of Hedge Fund Holders: 114
On February 9, Eli Lilly and Company (NYSE:LLY) announced an agreement to acquire Orna Therapeutics in a transaction valued at up to $2.4 billion in cash. The acquisition gives Lilly access to a technology platform designed to allow patients’ own cells to generate therapies directly inside the body, removing the need to extract and engineer those cells externally. The move is part of a broader push by Lilly to expand beyond its obesity franchise. The company has signed several deals in recent months aimed at diversifying its pipeline. Following the announcement, Lilly’s shares rose more than 3% in morning trading.
Orna is focused on treatments built around circular RNA, delivered using novel lipid nanoparticles. Its lead candidate, ORN-252, is currently in early-stage development. The therapy falls under the category of chimeric antigen receptor T-cell, or CAR-T, and targets cells that express the CD19 receptor. CAR-T therapies work by reprogramming a patient’s immune cells to recognize and eliminate cancer cells.
Although Lilly continues to lead in the weight-loss market, it has been steadily building out its presence in other areas, including inflammatory bowel disease, oncology, ophthalmology, and gene editing. That expansion has come through a combination of acquisitions and partnerships. Earlier this month, Lilly also entered into a collaboration with China-based Innovent Biologics to develop immunology and oncology therapies. Under the agreement, Lilly will pay $350 million upfront and could pay as much as $8.5 billion more if certain milestones are achieved.
Eli Lilly and Company (NYSE:LLY) is a global pharmaceutical company engaged in discovering, developing, manufacturing, and marketing medicines worldwide.
1. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 140
On February 5, Mizuho cut its price recommendation on UnitedHealth Group Incorporated (NYSE:UNH) to $350 from $430 but kept an Outperform rating on the stock. The revision came after the company’s Q4 results, with the firm pointing to a slower-than-expected earnings recovery as the main reason for the lower target.
For 2025, UnitedHealth generated $447.6 billion in revenue, an increase of 12% from the prior year. Much of that growth came from its Medicare & retirement business. Revenue in that segment climbed about 23% to $171.3 billion, making up just over 38% of total company sales.
The expansion has been steady for years. Since 2020, revenue in the Medicare & retirement segment has surged 89%, rising from $90.8 billion. Medicare has clearly been a key engine behind the company’s overall growth. That also explains why policy risk matters. The Trump administration’s proposal to hold Medicare Advantage rates flat in 2027 could weigh on future growth. Given how important the segment has become, investor caution around the stock appears understandable.
UnitedHealth Group Incorporated (NYSE:UNH) is the largest health insurer in the US and a diversified healthcare company serving more than 50 million people globally. Its operations run through two primary platforms: UnitedHealthcare, which provides insurance coverage, and Optum, which focuses on healthcare services, technology, and data-driven care delivery.
While we acknowledge the potential of UNH 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 UNH and that has 100x upside potential, check out our report about this cheapest AI stock.
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