In this article, we highlight the 14 Best Forever Stocks to Buy According to Hedge Funds.
A sky-high valuation is a significant concern heading into 2026. After two years of blockbuster gains, most stocks are trading above historical norms. With valuation concerns becoming rife by the day, a potential rotation could be on the cards.
According to Brian Mulberry, client portfolio manager at Zacks Investment Management, rotation out of highly valued names and into more fairly valued sectors could persist into 2026.
“We definitely have seen a pretty clear rotation from large-cap growth into large-cap value, and what we’re really seeing is, I think, people positioning themselves in a more defensive posture for what’s going to happen next year,” said Mulberry. “The real question that’s being asked is, ‘Who is going to monetize these very large investments in AI?’”
Goldman Sachs analyst Christian Mueller-Glissmann has reiterated similar sentiments, insisting that it is time investors considered diversifying beyond large-cap stocks. The remark is in response to an enormous resurgence of US equities led by large-cap tech companies. However, the analyst insists that a weaker US dollar could be a major tailwind for large-cap tech companies.
Kathmere Capital Management chief investment officer Nick Ryder believes it is high time investors tweaked their portfolios to ensure they are sufficiently diversified outside the meg-growth segment. According to Ryder, owning value stocks is the ideal play at a time when momentum and value stocks are doing well.
“The discounts on value stocks are pretty significant relative to history,” he said. “It’s axiomatic value is cheaper than the market, but sometimes it’s even more than normal, and we are at one of those times,” he added.
With that in mind, let’s take a look at some of the best forever stocks to buy according to hedge funds at a time of valuation concerns and monetary policy uncertainty.
Our Methodology
The best forever stocks offer stability and growth, making them ideal for long-term investors. We analyzed ETFs and compilations that listed blue chip companies, high quality companies, and companies with wide moats. From that sample, we picked the stocks that were the most popular among elite hedge funds, as of Q3 2025.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research shows 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).
Best Forever Stocks to Buy According to Hedge Funds
13. KLA Corporation (NASDAQ:KLAC)
Number of Hedge Fund Holders: 58
KLA Corporation (NASDAQ:KLAC) is one of the best forever stocks to buy according to hedge funds. On December 15, analysts at Jefferies upgraded KLA Corporation (NASDAQ:KLAC) to a Buy, buoyed by accelerating artificial intelligence driven spending. Additionally, the research firm echoed a strong outlook for demand for leading-edge and advanced packaging.
Jefferies expects the company to capitalize on the acceleration of hyperscalers’ capital expenditure and the inflection in ASIC adoption. Consequently, it expects a multi-year runway for semiconductor capital equipment. In addition, the research firm upgraded the stock to a Buy rating, citing expected growth in wafer fab equipment through 2026 and 2027.
Artificial intelligence continues to drive spending, supporting higher demand across leading-edge foundry memory and packaging. The company should also benefit from its outsized exposure to the Leading Edge as AI pushed capacity addition into the second half of next year. Consequently, the research firm has raised its revenue forecasts for KLA Corp to $14 billion for 2026 and $15.5 billion for 2027.
Meanwhile, on December 16, analysts at Bank of America raised their price target of KLA Corp to $1450 from $1400 while reiterating a buy rating. The upgrade comes amid expectations that next year will mark the mid-point of the 8- to 10-year upgrading cycle for traditional IT infrastructure.
KLA Corporation (NASDAQ:KLAC) designs, manufactures, and sells advanced process control equipment and services for the semiconductor and electronics industries, helping chipmakers find tiny defects, improve yields, and enhance quality in making logic chips, memory (like DRAM/NAND), LEDs, and more, essentially providing the high-tech tools to ensure flawless microchip production.
13. The TJX Companies, Inc. (NYSE:TJX)
Number of Hedge Fund Holders: 73
TJX Companies Inc. (NYSE: TJX) is one of the best forever stocks to buy according to hedge funds. On December 16, UBS reiterated a Buy rating on TJX Companies Inc. (NYSE:TJX), impressed by the company’s market share gains against other department stores.
The off-price retailer has been a major share gainer against department stores on sales and EBIT dollars for more than a decade. The trend was even stronger in the third quarter, affirming long-term growth potential amid international expansion initiatives.
Bernstein SocGen Group also reiterated similar sentiments on December 4, touting the stock as an Outperform with a $155 price target. The positive rating follows meetings with the company’s senior management that echoed solid performance metrics expected to trigger a consistent double-digit earnings algorithm.
Consequently, Bernstein expects the company to deliver a 13% compound annual growth rate from 2021 to 2025, asserting its ability to accelerate earnings growth amid challenges such as tariffs, consumer uncertainty, and supply volatility.
The TJX Companies, Inc. has reiterated its commitment to shareholder value, announcing a quarterly dividend of $0.425, payable on March 5, 2026. It will mark 46 consecutive years of dividend payments with the stock boasting an annual dividend yield of 1.11%.
The TJX Companies, Inc. (NYSE:TJX) is the world’s leading off-price retailer, selling brand-name apparel, home fashions, and other goods at 20% to 60% below department store prices. It operates stores like T.J. Maxx, Marshalls, HomeGoods, and Sierra.
