In this article, we will discuss the 9 Best Quality Stocks to Buy According to Wall Street Analysts.

On July 8, Mike Akins, ETF Action founding partner, joined ‘Halftime Report’ to discuss growth trades that remain underappreciated in comparison to the AI and semiconductor sectors that dominated the first half of the year. Akins highlighted a trend he described as the “SaaS apocalypse,” where software and cloud computing companies saw their valuations drop from extreme levels. He explained that these companies are now trading in line with, or even below, the broader market, despite maintaining strong growth scenarios. Consequently, he expressed confidence in software and cloud stocks heading into the second half of the year, expecting that upcoming earnings reports will validate the continued necessity of these services for day-to-day operations. Furthermore, Akins points to mid-cap and small-cap names, specifically mentioning D-tech as an example of a thematic strategy focused on disruptive technology. He noted that these smaller-market companies have been left behind by the mega-cap, semiconductor-led market rally, but their analyst-projected earnings growth suggests a positive setup.

Regarding broader opportunities, Akins observed that the market experienced a significant broadening in the first half of the year, pointing out that the Mag 7 stocks were essentially flat year-to-date while the broader market rose 10% and the tech sector rose 20%. He suggested that this trend of market broadening is likely to continue. He identified emerging markets (excluding China) as a key opportunity, though he advised investors to use active management or different weighting methodologies to account for large allocations in memory chips that have seen rapid growth.

Additionally, Akins advocated for small- and mid-cap stocks that screen for quality and profitability, noting that both growth and value styles have performed well in these down-market categories. He concludes that these segments have the potential to continue catching up throughout the remainder of the year, driven not only by revenue and earnings growth but also by the expansion of multiples that have been extremely depressed for several years.

Against this backdrop, lets take a look at some quality stocks according to Wall Street analysts.

Our Methodology

We sifted through the Vanguard US Quality Factor ETF holdings to identify stocks that have an upside potential of at least 15%, and limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. These stocks are also popular among analysts and elite hedge funds.

Note: All data was sourced on July 8. 

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. Insider Monkey’s quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).

9 Best Quality Stocks to Buy According to Wall Street Analysts

9. Qualcomm Inc. (NASDAQ:QCOM)

Average Upside Potential: 19.26%

Qualcomm Inc. (NASDAQ:QCOM) is one of the best quality stocks to buy according to Wall Street analysts. On June 16, Qualcomm Technologies introduced the Snapdragon Reality Elite platform, designed to support the next generation of immersive spatial computing and mixed reality devices. Featuring significant hardware upgrades, the platform delivers substantial improvements in GPU, CPU, and NPU performance, enabling higher visual fidelity and faster, more complex mixed reality scenarios.

Engineered to advance on-device generative AI, the platform provides 48 TOPS of processing power, allowing it to run large vision and language models directly on the device. These AI capabilities enhance contextual awareness, tracking precision, and real-time interaction, supporting advanced features such as photorealistic avatars and dynamic content generation.

The platform also emphasizes comfort and efficiency, achieving up to 20% longer battery life and cooler operating temperatures than previous iterations. By reducing power consumption and latency, Snapdragon Reality Elite enables the development of sleeker, more comfortable headsets, with the XREAL Project Aura set to be the first device to feature the new technology.

Qualcomm Inc. (NASDAQ:QCOM) develops and commercializes core technologies and products for mobile devices and other wireless products. It operates in three segments: Qualcomm CDMA Technologies, Qualcomm Technology Licensing, and Qualcomm Strategic Initiatives.

8. PepsiCo Inc. (NASDAQ:PEP)

Average Upside Potential: 19.29%

PepsiCo Inc. (NASDAQ:PEP) is one of the best quality stocks to buy according to Wall Street analysts. On July 9, PepsiCo reported mixed second-quarter results as strong international demand was offset by weaker performance in its North American food and beverage divisions. The company posted adjusted earnings per share of $2.20 on $24.18 billion in revenue, topping Wall Street’s revenue expectations of $23.95 billion but missing earnings by one cent.

Domestic volume saw significant pressure, with flat volume for the North American food business and a 4% decline in the North American beverage segment. CEO Ramon Laguarta attributed the softness to tightening consumer budgets driven by inflationary pressures and rising gas prices, which particularly impacted demand in the convenience store channel.

Despite these domestic challenges, PepsiCo Inc. (NASDAQ:PEP) reiterated its full-year forecast, expecting organic revenue to grow between 2% and 4%. Management indicated that while they anticipate a recovery in North American volumes, performance trends will likely improve more gradually throughout the remainder of the year.

PepsiCo Inc. (NASDAQ:PEP) is a global leader in convenient foods and beverages, operating in over 200 countries and territories. The company manufactures, markets, and distributes a wide range of iconic products, including beverages, snacks, and ready-to-drink meals.