On Friday, August 15, the stock market had a mixed day. The S&P 500 fell 0.29% after reaching a record high earlier. The Nasdaq Composite dropped by 0.40%. However, the Dow Jones Industrial Average outperformed and went up by 0.08%.

Even though the market dipped on Friday, the major averages had a good week overall. The Dow was the best performer with a 1.74% gain. The S&P 500 grew by 0.94%. The Nasdaq increased by 0.81%. These gains were supported by new consumer inflation data that gave hope that the Federal Reserve might lower interest rates in September.

Meanwhile, the University of Michigan’s consumer sentiment index declined from 61.7 in July to 58.6 in August. This drop in confidence was mainly because of worries over inflation.

Retail sales data released by the US Census Bureau on Friday morning showed retail sales increased 0.5% in July compared to June. While this was slightly less than the 0.6% gain expected by economists, it still showed a healthy increase after a big drop in consumer spending in spring.

Jay Hatfield, CEO at Infrastructure Capital Advisors, said:

“The AI boom and the required Fed rate cuts are supporting the market, so we don’t think we’ll have a tradable pullback in the S&P, despite the horrible seasonality of August and September.”

With this background in mind, let’s take a look at the 9 best NYSE stocks to buy according to hedge funds.

Our Methodology

To compile our list of the 9 best NYSE stocks to buy according to hedge funds, we looked for the biggest companies listed on the NYSE. Next, we focused on the top 10 stocks most favored by institutional investors. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s Q1 2025 database of 1,000 elite hedge funds. Finally, the 9 best NYSE stocks to buy were ranked in ascending order based on the number of hedge funds holding stakes in them as of Q1 2025.

Why do we care about what hedge funds do? 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).

9. Eli Lilly and Company (NYSE:LLY)

Number of Hedge Fund Holders: 119

Eli Lilly and Company (NYSE:LLY) is one of the best NYSE stocks to buy according to hedge funds. On August 14, Reuters reported that Eli Lilly and Company (NYSE:LLY) has entered into a deal worth $1.3 billion with Superluminal Medicines, a privately held company.

The aim of this deal is to use AI to discover and develop small-molecule drugs for obesity and other cardiometabolic diseases.

As per the report by Reuters, Eli Lilly and Company (NYSE:LLY) is already leading the obesity treatment market, which is expected to be worth $150 billion by the next decade. The company is looking to solidify its foothold in this area by developing next-generation drugs, making acquisitions, and entering into partnerships.

The deal allows Eli Lilly and Company (NYSE:LLY) to have exclusive rights to develop and commercialize drug candidates discovered with the help of Superluminal’s proprietary AI-driven platform targeting G-protein-coupled receptors (GPCR). These proteins can influence physiological processes including metabolism, cell growth, and immune responses.

Eli Lilly and Company (NYSE:LLY) is an American multinational pharmaceutical company focused on discovering, developing, and delivering innovative medicines.

8. Alibaba Group Holding Limited (NYSE:BABA)

Number of Hedge Fund Holders: 125

Alibaba Group Holding Limited (NYSE:BABA) is one of the best NYSE stocks to buy according to hedge funds. On July 24, Mizuho reduced its price target on Alibaba Group Holding Limited (NYSE:BABA) from $160 to $149 and kept an Outperform rating.

This decision to lower the price target reflects concerns about margin contraction because of tougher competition in local commerce, especially in food delivery. This increased competition is affecting all major commerce players.

Mizuho expects Alibaba Group Holding Limited (NYSE:BABA) to experience “meaningful margin contraction” in the second quarter compared to the first quarter. The competitive pressure affecting margins could continue through the second half of 2025 and into 2026.

Mizuho cut its forecast for Alibaba Group Holding Limited’s (NYSE:BABA) EBITDA in the June 2025 quarter from 55 billion RMB to 45 billion RMB. The firm also reduced the full-year 2027 EBITDA forecast to 231 billion RMB, factoring in the company’s 50 billion RMB subsidy program.

Additionally, the firm gave an estimate of 251 billion RMB for Alibaba Group Holding Limited’s (NYSE:BABA) 2028 EBITDA.

Alibaba Group Holding Limited (NYSE:BABA) plans to share its financial results for the quarter ended June 30, 2025, before the US market opens on August 29, 2025.

Alibaba Group Holding Limited (NYSE:BABA) is a Chinese multinational technology company focused on e-commerce, retail, AI, digital media and entertainment, cloud, and technology.