In this article, we will take a look at the 5 High Profit Margin Stocks to Buy According to Hedge Funds. For a deeper discussion and an extended list, please see the 11 High Profit Margin Stocks to Buy According to Hedge Funds.
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. (NASDAQ:PLTR) 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. (NASDAQ:PLTR) 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. (NASDAQ:PLTR) 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 (NYSE:LLY) 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 (NYSE:LLY) 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 (NYSE:LLY) stated that its Orfor therapy outperformed oral semaglutide in a Type 2 diabetes trial, meeting all primary and significant secondary goals.
Eli Lilly & Company (NYSE:LLY) 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. (NASDAQ:AVGO), highlighting the company’s better-than-expected second-quarter forecasts. Broadcom Inc. (NASDAQ:AVGO) 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. (NASDAQ:AVGO) 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. (NASDAQ:AVGO) 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. (NASDAQ:META) 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. (NASDAQ:META) 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. (NASDAQ:META) 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. (NASDAQ:META) 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 (NASDAQ:NVDA) 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 (NASDAQ:NVDA). 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 (NASDAQ:NVDA) booked $30 billion in sovereign AI income in FY26.
NVIDIA Corporation (NASDAQ:NVDA) 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.
While we acknowledge the potential of NVDA 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 NVDA and that has 100x upside potential, check out our report about the cheapest AI stock.
READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
