In this article, we will be taking a look at the Conservative Stock Portfolio: 11 Best Stocks to Buy Now.
The equity market outlook has always been positive whenever the US Federal Reserve cuts rates in an accelerating economy. That has been the case as stocks have raced to record highs, defying seasonal weakness in September amid mounting concerns about macroeconomic indicators. Likewise, strategists at Bank of America believe the run in big tech stocks has further room to go despite two years of substantial gains.
Nevertheless, Tony Pasquariello, Head of hedge fund coverage at Goldman Sachs Group Inc., insists it is high time investors remembered the importance of being “responsibly bullish.” The sentiments emerge against the backdrop of premium valuations, with equity markets trading above historical norms.
“So, own what you want to own,” Pasquariello wrote. The analyst believes investors should start using the options market to manage risks and refrain from chasing the market.
Nomura Securities International Inc.’s cross-asset strategist, Charlie McElligott, shares similar sentiments, reiterating that investors should focus on hedging their portfolios as more people chase the stock market rally. “Even though it hurts, you cannot take your hedges off now, no matter how much they’re dragging performance,” the strategist said,
US Federal Reserve Governor Jerome Powell, giving no signs that he will support a cut at the central bank in October, is already presenting numerous risks in a market trading at record highs.
“Powell’s warning against cutting too aggressively highlights the growing split inside the Fed,” said Natalie Gallagher, principal economist at the Board. “That divide itself has become a market catalyst, adding uncertainty around the pace of the cutting cycle.”
Kevin Gordon, senior investment strategist at Charles Schwab, has already warned that investors face a risk of market breadth narrowing and performance becoming reliant on a few dominant stocks. Amidst the emerging concerns, focus could slowly shift to conservative plays that hold steady regardless of uncertainties in the overall market.
Conservative investments typically involve defensive stocks, which tend to perform well regardless of economic conditions or changes in monetary policy. These stocks offer stability and resilience during market fluctuations. With that in mind, let’s look at the best stocks to buy now for a conservative stock portfolio.
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Our Methodology
To identify the conservative stock portfolio: best stocks to buy now, we relied on Insider Monkey’s database and stock screeners to pick conservative (safe, reliable, and defensive) stocks. We settled on stocks that are likely to outperform regardless of economic conditions and are popular among elite hedge funds in Q2 2025. Finally, we ranked the stocks in ascending order based on the number of hedge funds that hold stakes in them.
Why are we interested in the stocks that hedge funds pile into? The reason is straightforward: our research has demonstrated that we can outperform the market by replicating 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).
Conservative Stock Portfolio: Best Stocks to Buy Now
11. 3M Company (NYSE:MMM)
Number of Hedge Fund Holders: 64
3M Company (NYSE:MMM) is one of the best conservative stocks to buy now. On September 11, at Morgan Stanley’s 13th Annual Laguna Conference, CEO Bill Brown reiterated plans to accelerate growth and expand margins through strategic initiatives.
The company aims to achieve a 25% margin expansion by 2027, with a focus on innovation and operational efficiency. The margin expansion is expected to follow as the company plans to strengthen its pipeline with the launch of 1,000 new products over the next three years.
“What we laid out at the investor day is that we would generate $1 billion of growth above the macro over the next three years. We said, look, half of that is going to come out of commercial excellence, and half is going to come out of new product introductions. We also said that the front end of it is going to be mostly commercial excellence, and that NPI or the growth from innovation will be the accelerant beyond it in 2026 and 2027,” CEO Brown said.
In the first half of the year, the 3M Company achieved 1.5% organic growth and is on track to achieve 2.5% growth in the second half of the year.
3M Company (NYSE:MMM) is a global science-based technology company that invents and applies its diverse technologies to create innovative products for businesses and consumers. It offers products ranging from Post-it® Notes and Scotch® Tape to advanced materials, medical supplies, and safety equipment across various industries, including healthcare, automotive, consumer goods, and electronics.
10. Bristol-Myers Squibb Company (NYSE:BMY)
Number of Hedge Fund Holders: 67
Bristol-Myers Squibb Company (NYSE:BMY) is one of the best conservative stocks to buy now. On September 23, at the Bernstein Insights: Healthcare Leaders and Disruptors, the company emphasized its leadership in cell therapy.
The remarks come on the company treating 13,000 patients with cell therapy while leveraging extensive clinical data. Likewise, it is currently working on Orva-cel and Breyanzi, which it believes pose significant prospects in targeting autoimmune and neuroinflammatory diseases.
“As we sit four years later, after treating 13,000 patients, we sit in a unique position at Bristol Myers Squibb where we have more manufactured clinical and translational data than almost anyone else in this space. It has afforded us the opportunity not only to grow our inline assets, but it’s helped us accelerate our pipeline,” said Lynelle, Head of the Cell Therapy business, Bristol Myers Squibb.
Approved to treat certain adult lymphomas, Breyanzi is the company’s lead cell-based gene therapy. With only 20% of eligible patents currently receiving CAR T therapy, the company is staring at tremendous opportunities.
Bristol-Myers Squibb Company (NYSE:BMY) is a global biopharmaceutical company that discovers, develops, manufactures, and sells innovative medicines to treat serious diseases, with a focus on areas like oncology, immunology, hematology, and cardiovascular disease.
9. PepsiCo, Inc. (NASDAQ:PEP)
Number of Hedge Fund Holders: 68
PepsiCo, Inc. (NASDAQ:PEP) is one of the best conservative stocks to buy now. On September 18, the company confirmed its participation in Supporting Trusted Engagement and Partnership (STEP) up for Agriculture (STEP up for Ag).
The initiative, which brings together leading retail and global food and beverage companies, seeks to scale regenerative agriculture through locally tailored support systems. The initiative aims to equip farmer-facing organizations with the tools, training, and funding needed to accelerate the adoption of sustainable practices.
The initiative aligns with PepsiCo’s goal to transition 10 million acres by 2030 by strengthening farmer support. The expansion has already begun in Europe, marking a global push towards regenerative agriculture.
PepsiCo, Inc. (NASDAQ:PEP) engages in the manufacture, marketing, distribution, and sale of various beverages and convenient foods worldwide. It provides dips, cheese-flavored snacks, and spreads, as well as corn, potato, and tortilla chips, among others.
8. Cisco Systems Inc. (NASDAQ:CSCO)
Number of Hedge Fund Holders: 81
Cisco Systems Inc. (NASDAQ:CSCO) is one of the best conservative stocks to buy now. On September 22, the networking giant confirmed the opening of a new downtown office in Austin, Texas.
The new office is to serve as a showcase for the company’s workplace technologies and will be the third in the city. The showcased devices on display include an AI assistant, video conferencing equipment, and large-screen conferencing technologies.
The devices that Cisco is displaying at the new office space are installed throughout boardrooms, training spaces, and lounges. They also feature facial tracking solutions that provide remote participants with an impressive in-room experience.
“Austin’s spirit of innovation, its deep talent pool, and its relentless optimism have continually inspired us, and today, we’re doubling down on our commitment to Austin,” the company wrote in a blog post. “Our new downtown office isn’t just another building: it’s a testament to Cisco’s belief in Austin’s potential and in the people who make this community so special.”
Cisco Systems Inc. (NASDAQ:CSCO) is a technology company that designs, manufactures, and sells networking hardware, software, and telecommunications equipment to connect the world. Its products and services span networking, security, collaboration, and cloud management, providing the critical infrastructure for businesses and communities to operate and thrive in the digital age.
7. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 84
Coca-Cola (NYSE:KO) is one of the best conservative stocks to buy now. On September 22, JPMorgan reiterated an ‘Overweight’ rating on the stock and a $79 price target. The investment bank has echoed the company’s ability to maintain a best-in-class long-term growth algorithm.
The beverage giant is targeting an organic sales growth of 4%-6%. The push for robust growth is being driven by the company’s efforts to address changing consumer preferences. It is increasingly focusing on hydration and ready-to-drink protein products as it seeks to expand its market reach.
Coca-Cola’s Vice President of Investor Relations, Robin Halpern, and Senior Director of Investor Relations, Taylor Polivka, have also echoed the company’s digital transformation efforts across consumer segments.
The Coca-Cola Company (NYSE:KO) manufactures, sells, and markets a wide variety of non-alcoholic beverages, including soft drinks, water, juices, dairy products, coffee, and tea, under more than 200 brands. Beyond its products, the company also focuses on marketing, technology, and sustainability initiatives, including water resource management and recycling.
6. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 88
Exxon Mobil Corporation (NYSE:XOM) is one of the best conservative stocks to buy now. On September 23, the company entered into a cooperation agreement with the Russian state energy giant Rosneft as it seeks to recoup $4.6 billion in write-downs it incurred in 2022.
The US oil giant incurred a $4.6 billion impairment charge in 2022 on its 30% operator stake in an oil and gas project off the Russian coast following the Russian invasion of Ukraine. Exit from Russia also resulted in the loss of access to approximately 150 million barrels of proven oil reserves.
The agreement opens the door for the repair of commercial relations between the US and Russia following Moscow’s invasion of Ukraine. Exxon has already received permission to engage in talks with Rosneft.
Exxon Mobil Corporation (NYSE:XOM) is a multinational oil and gas corporation that explores for, produces, transports, and sells crude oil and natural gas. It also manufactures, transports, and sells petroleum products, including fuels and lubricants, and is involved in the chemicals industry, producing materials used in various consumer products.
5. AbbVie Inc. (NYSE:ABBV)
Number of Hedge Fund Holders: 89
AbbVie Inc. (NYSE:ABBV) is one of the best conservative stocks to buy now. On September 23, the company’s subsidiary, Allergan Aesthetics, announced the rollout of SKINVIVE by JUVÉDERM in 35 additional markets.
With the expansion, the skin care solution is now available in 57 global markets. The expansion comes amid growing market demand for solutions that can enhance facial skin quality. It also positions AbbVie to pursue opportunities in the skin quality market, valued at $5.2 billion.
Additionally, the expansion aligns with AbbVie’s push to diversify its revenue streams beyond Humira, which is facing significant pressure from biosimilar competition.
“As we observe a shift in consumer behavior towards skin health-focused solutions, we’re committed to evolving our injectable portfolio. Through introducing innovative injection techniques, new treatment approaches with AA Signature™, and strategic product launches worldwide, our mission is to help empower practitioners deliver the best possible results for their patients,” said Mark Wilson, SVP, International Allergan Aesthetics.
AbbVie Inc. (NYSE:ABBV) is a global biopharmaceutical company that discovers, develops, and delivers innovative medicines and solutions for complex health issues, with a focus on therapeutic areas such as immunology, oncology, and virology.
4. Merck & Co., Inc. (NYSE:MRK)
Number of Hedge Fund Holders: 92
Merck & Co. Inc., (NYSE:MRK) is one of the best conservative stocks to buy now. On September 23, the company confirmed a strategic collaboration with Variational AI to leverage its Enki Platform in designing small-molecule drug candidates.
Variational AI is to use a customized version of the Enki Platform, trained on Merck’s proprietary data, to come up with optimized small molecule candidates. The collaboration aligns with Merck’s ongoing investment in and utilization of artificial intelligence solutions to enhance drug discovery and development.
Merck is to retain rights to develop and commercialize compounds resulting from the partnership. Similarly, Variational AI is eligible to receive an upfront payment and is entitled to up to $349 million in milestone payments.
“We look forward to working with Variational AI to apply their Enki platform to challenging therapeutic targets,” said Robert M. Garbaccio, Vice President and Head of Discovery Chemistry at Merck Research Laboratories.
Merck & Co., Inc. (NYSE:MRK) is a science and technology company with three main businesses: Healthcare, providing innovative therapies for challenging diseases; Life Science, supplying tools and services for research and biomanufacturing; and Electronics, offering high-tech materials for displays and electronics.
3. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 95
Johnson & Johnson (NYSE:JNJ) is one of the best conservative stocks to buy now. On September 23, the company announced plans to withdraw the LINX Reflux Management System in certain countries.
The company has cited commercial reasons for withdrawing the device used to treat acid reflux disease. The withdrawal follows a thorough evaluation of market conditions and the ability to serve each market effectively. Likewise, the withdrawal is not related to any changes in the safety or efficacy of the device.
The LINX Reflux Management System was approved for patients struggling with chronic gastroesophageal reflux disease. The condition is associated with stomach content leaking backward into the esophagus.
Johnson & Johnson (NYSE:JNJ) engages in the research and development, manufacture, and sale of various products in the healthcare field worldwide. It offers products for various therapeutic areas, including immunology, such as rheumatoid arthritis, psoriatic arthritis, inflammatory bowel disease, and psoriasis.
2. Walmart Inc. (NYSE:WMT)
Number of Hedge Fund Holders: 105
Walmart Inc. (NYSE:WMT) is one of the best conservative stocks to buy now. On September 24, analysts at Piper Sandler reiterated an ‘Overweight’ rating on the stock and a $111 price target.
Piper Sandler remains bullish about the company’s growth metrics following the reinvigoration of the private label apparel assortment segment. The company has made impressive strides in attracting younger and higher-income shoppers into its stores. Likewise, customer reception to the updated product line remains strong, supported by the establishment of a new apparel design team at the company.
The research firm expects the revitalization of the apparel segment to help Walmart accelerate market share gains. It also expects the company to start disrupting apparel sales at competing mass retailers. The brick-and-mortar stores have delivered 4.2% revenue growth over the past year, backed by a 24% return on equity.
Walmart Inc. (NYSE:WMT) is an omnichannel retailer that operates retail stores, including department stores and membership-based clubs like Sam’s Club, across the US and in several countries, offering a wide variety of products from groceries and apparel to electronics and home goods.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 294
Microsoft Corporation (NASDAQ:MSFT) is one of the best conservative stocks to buy now. On September 23, the company unveiled a new cooling system designed to enhance cooling in devices that experience excessive overheating.
The new cooling system is capable of removing heat up to three times better than cold plates that are commonly used. The latest technology leverages microfluidics, an approach that brings liquid coolant directly inside the silicon where the heat is generated. In this case, tiny channels are created at the back of the silicon chip to remove heat efficiently.
According to researchers, microfluidics may increase the sustainability and efficiency of next-generation AI devices. Cold plates, which are isolated from the heat source by multiple layers that restrict the amount of heat they can remove, are currently used to cool the majority of GPUs running in data centers today.
“Microfluidics would allow for more power-dense designs that will enable more features that customers care about and give better performance in a smaller amount of space,” said Judy Priest, corporate vice president and chief technical officer of Cloud Operations and Innovation at Microsoft.
Microsoft Corporation (NASDAQ:MSFT) develops and sells computer software, including its Windows operating system, Microsoft 365 productivity suite, and Xbox gaming products. It also offers cloud computing services through Microsoft Azure, develops hardware such as Surface tablets and Xbox consoles, and provides a range of online services and solutions.
While we acknowledge the potential of Microsoft Corporation (NASDAQ:MSFT) as an investment, 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 MSFT and that has 100x upside potential, check out our report about this cheapest AI stock.
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