10 Stocks the Best Fund Managers Have Been Buying in 2025

It’s been a trying year for stock investors: Worries about DeepSeek’s artificial intelligence disruption and policy uncertainty around tariffs have sent the US stock market on a roller-coaster ride in 2025.

Where has the “smart money” been finding investment opportunities in this year’s volatile market?

To find out, we looked at the latest portfolios of some of the best fund managers. To isolate the top stock-pickers among current active fund managers, we screened on the following:

• Actively managed funds that land in US large-value, US large-blend, or US large-growth Morningstar Categories.
• Funds with at least one share class earning Morningstar Medalist Ratings of Gold, Silver, or Bronze with 100% analyst coverage.
• Funds that hold 50 stocks or fewer as of their most recently reported portfolios.

Twenty-nine separate fund portfolios passed our screen. We then compared the latest portfolios of these funds with their portfolios three months before to determine what stocks these managers have been buying. Most of the portfolios we examined were as of March 31, 2025, which means the purchases featured here don’t include any buying activity during the tariff-induced market selloff in April and the subsequent rebound.

Some of the stocks that top managers have been buying look fairly valued today, according to Morningstar, but there are some undervalued stocks in the mix, too.

10 Stocks That the Best Fund Managers Are Buying in 2025

Here are the stocks that top managers have been investing in this year.

1. Alphabet GOOGL
2. Microsoft MSFT
3. Amazon.com AMZN
4. Nvidia NVDA
5. Goldman Sachs GS
6. Sherwin-Williams SHW
7. UnitedHealth Group UNH
8. Caterpillar CAT
9. Home Depot HD
10. Salesforce CRM

Several large-growth technology and tech-related stocks pepper the list, which isn’t surprising, given that their underperformance for much of the year made their valuations more attractive.

Here’s a little bit about each stock pick, along with some commentary from the Morningstar analysts who follow the companies. All data is as of May 16, 2025.

Alphabet

• Number of Best Managers Buying the Stock: 7
• Morningstar Price/Fair Value: 0.70
• Morningstar Economic Moat Rating: Wide
• Morningstar Uncertainty Rating: Medium
• Morningstar Style Box: Large Value
• Sector: Communication Services

The best fund managers’ top stock pick during the latest quarter was Alphabet, one of five technology-related names on our list. Morningstar thinks this wide-moat stock is undervalued today.

Here’s what Morningstar analyst Malik Ahmed Khan had to say after Alphabet reported earnings:

Alphabet kicked off 2025 with a set of solid results, with the firm’s sales and operating margins growing 12% and 230 basis points year over year, respectively. Google Cloud continues to be the firm’s growth engine, growing 28% year over year.

Why it matters: Despite the turbulent macroenvironment as well as ongoing antitrust cases and tough competition in generative AI, we were impressed by Alphabet’s continued strong execution, with the firm showing clear progress on the generative AI monetization front.

• In particular, we were impressed with the wide range of monetization angles the firm is creating by leveraging AI, including Google Cloud, Gemini, AI Overviews, and improved ad targeting tools provided to advertisers.
• Beyond advertising, the firm’s public cloud business remains supply-constrained, leading to the deceleration in growth to 28% from 30% in the previous quarter. We expect Google Cloud growth to reaccelerate as additional capacity comes online in the second half of 2025.

The bottom line: We maintain our $237 per share fair value estimate for wide-moat Alphabet and continue to view the stock as materially undervalued.

• While we believe investor concerns around a tariff-induced digital ad spending slowdown and antitrust-related impact on Alphabet’s business are valid, we think the selloff in the firm’s shares has been overly punitive, creating an attractive buying opportunity.
• We reiterate our view that Alphabet will be able to navigate the antitrust cases against it without material value destruction in its businesses. Also, we expect the firm’s diversified end-market and geographic exposure to insulate its ad business from a sharp decline in ad spending.

Coming up: Despite the ongoing macroeconomic uncertainty, Alphabet restated its intention to spend $75 billion in capital expenditure in 2025. We believe the firm has a lucrative long-term opportunity in generative AI and view these investments as sound.

Read Morningstar’s full report on Alphabet.

Microsoft

• Number of Best Managers Buying the Stock: 8
• Morningstar Price/Fair Value: 0.90
• Morningstar Economic Moat Rating: Wide
• Morningstar Uncertainty Rating: Medium
• Morningstar Style Box: Large Core
• Sector: Technology

In addition to being among the top buys of the best fund managers this year, Microsoft is also the most widely held stock pick among the group. Microsoft stock looks 10% undervalued relative to Morningstar’s fair value estimate of $505.

Here’s what Morningstar senior analyst Dan Romanoff had to say after Microsoft reported earnings:

Microsoft’s third-quarter results topped the high end of the firm’s guidance. Revenue increased 13% year over year to $70.1 billion, compared with the high end of guidance of $68.7 billion, while operating margin was 45.7%, compared with the high end of guidance at 44.6%.

Why it matters: Results are good across the board, with upside to our estimates on the top and bottom lines. Revenue for all segments was above the high end of guidance. Critically, we see very impressive performance within Azure, in traditional and artificial intelligence workloads.

• In our view, near-term demand indicators are robust. Commercial bookings grew a solid 17% year over year in constant currency based on surging Azure commitments from OpenAI and other large deals. Remaining performance obligations increased 34% year over year to $315 billion.
• Demand for Azure AI services is surging, which is a long-term positive. While Azure remains capacity-constrained, AI performed better than internal expectations, while traditional workloads rebounded. Azure growth was 35% in constant currency for the quarter and topped guidance.

The bottom line: We raise our fair value estimate for wide-moat Microsoft to $505 per share, from $490 previously, based on good results and guidance, while our long-term estimates remain unchanged. We view shares as attractive, and the stock remains one of our top picks.

Coming up: Overall guidance is impressive in this environment. Microsoft provided better-than-expected guidance on the top and bottom lines, including $73.7 billion in revenue, 43.4% operating margin, and $3.34 in earnings per share at the midpoints.

• The firm notes no change in customer behavior based on tariffs or the Department of Government Efficiency.

Big picture: We see results reinforcing our long-term thesis, which centers on the expansion of hybrid cloud environments, the proliferation of artificial intelligence, and Azure. We center our growth estimates around Azure, Microsoft 365 E5 migration, and traction with the Power Platform.

Read Morningstar’s full report on Microsoft.

Amazon.com

• Number of Best Managers Buying the Stock: 6
• Morningstar Price/Fair Value: 0.86
• Morningstar Economic Moat Rating: Wide
• Morningstar Uncertainty Rating: Medium
• Morningstar Style Box: Large Core
• Sector: Consumer Cyclical

Wide-moat Amazon is another popular tech-related stock pick with our managers. Amazon stock looks undervalued, trading 14% below our $240 fair value estimate.

Here’s what Morningstar’s Romanoff had to say about Amazon’s recent results:

Amazon reported first-quarter results that beat the high end of guidance on both the top and bottom lines. Revenue grew by 10% year over year in constant currency to $155.7 billion, while operating margin was 11.8% versus 10.7% a year ago. Currency hurt sales growth by $1.4 billion.

Why it matters: Results were generally good, with upside broadly on the top and bottom lines, which we think is positive in the face of looming tariffs. We see some prebuying behavior ahead of tariffs, which is worth monitoring if the tariff situation persists beyond the second quarter.

• Amazon produced upside to revenue in each of the segments relative to our model, except for third-party sellers, which was slightly light. Consumer buying behavior has not really changed in the face of tariffs, even through April. Advertising was impressive and helped buoy overall results.
• While there could be some mild disappointment around solid AWS results given Azure’s very strong results on April 30, we note AWS faces the same capacity constraints and still produced upside to our estimate in the first quarter. Artificial intelligence workloads are growing in excess of 100% year over year on AWS.

The bottom line: We maintain our fair value estimate of $240 per share as we see good results in conjunction with mixed guidance, and we see shares as attractive.

Coming up: Overall guidance is mixed, with revenue solid and profitability light relative to our model. Satellite launch costs for Project Kuiper will likely pressure margins for a couple of quarters, while new AWS capacity coming online later this year will have a similar impact.

• We do not think these will have a major impact on Amazon’s long-term profitability, but we have already been modelling relatively flat margins for 2025, so we have not made meaningful changes.
• Considering the tariff situation, we see guidance as solid. Second-quarter guidance includes revenue of $159 billion to $164 billion, with operating income of $13.0 billion to $17.5 billion.

Read Morningstar’s full report on Amazon.com.

Nvidia

• Number of Best Managers Buying the Stock: 7
• Morningstar Price/Fair Value: 1.08
• Morningstar Economic Moat Rating: Wide
• Morningstar Uncertainty Rating: Very High
• Morningstar Style Box: Large Growth
• Sector: Technology

The first overvalued stock on our list of top buys from the best managers, Nvidia stock trades 8% above our $125 fair value estimate, though the stock is trading below its 2024 highs.

Morningstar strategist Brian Colello had this to say after Nvidia announced in April that it was taking a sizable write-off because of heightened China restrictions.

Nvidia expects to incur $5.5 billion of write-offs associated with its H20 artificial intelligence GPU, as the US has restricted its export to China. The H20 was crafted specifically for the Chinese market to allow Nvidia to circumvent prior US restrictions.

Why it matters: The US government has placed another round of restrictions on Nvidia as the country strives to lead the AI race. China has shrunk to about 10% of Nvidia’s revenue from 20%, and we now expect it to go to close to zero, and we don’t foresee a turnaround anytime soon.

• The $5.5 billion of write-offs will relate to inventory and purchase commitments for the H20, as we assume that these less capable chips might not find a home with customers in developed markets.

The bottom line: We lowered our fair value estimate for wide-moat Nvidia to $125 from $130 as we cut our revenue estimates to exclude China now and in the future. We retain our Very High Uncertainty Rating.

• We lower our revenue estimates for the July quarter by 10% and carry forward our preexisting growth rates across a smaller revenue base. Partially offsetting these cuts is an increase in our long-term revenue estimates as we remain optimistic about AI buildouts in developed markets.
• Tariffs and geopolitical tensions remain a near-term and long-term concern for Nvidia and other chipmakers, while the future of AI expansion isn’t crystal clear, either. These factors, among others, underpin our Very High Uncertainty Rating. China is just one of many moving pieces.

Coming up: We expect to gain more insight into these restrictions, along with tariffs and the overall state of AI spending, during Nvidia’s earnings call in late May. In the meantime, we doubt that businesses are slowing their AI investments, which might support ongoing AI GPU sales through 2025.

Read Morningstar’s full report on Nvidia.

Goldman Sachs

• Number of Best Managers Buying the Stock: 3
• Morningstar Price/Fair Value: 1.26
• Morningstar Economic Moat Rating: Narrow
• Morningstar Uncertainty Rating: Medium
• Morningstar Style Box: Large Value
• Sector: Financial Services

Goldman Sachs is the only financial-services name on our list of stocks that top investors have been investing in. Shares of the narrow-moat company trade at a 26% premium to our $490 fair value estimate.

Here’s Morningstar senior equity analyst Brett Horn‘s take on Goldman’s recent earnings report:

Narrow-moat-rated Goldman Sachs reported a strong start to the year as near-constant shifts in market sentiment bred heightened volatility that produced exceptional trading revenue, effectively masking the tepid deal-making environment that is posing headwinds for investment banking. Despite strong quarterly results and a recent selloff alongside broader equity markets, we continue to see shares being modestly overvalued as we maintain our $490 fair value estimate.

The company reported net income to common shareholders of $4.6 billion, or $14.12 per diluted share, on $15.1 billion of net revenue. Investment banking revenue declined 7% sequentially and 8% year over year, as heightened macroeconomic uncertainty stalled the cyclical recovery in deal-making activity that has been underway. Despite these muted results, the global banking and markets segment holistically booked net revenue gains of 26% sequentially and 10% year over year, as continued developments in tariff policies spiked market volatility, enabling the fixed-income, currency, and commodities and equities businesses to generate historic revenues as clients repositioned their portfolios. While we forecast some normalization over the long run for both the trading and investment banking businesses, which we believe are currently overearning and underearning, respectively, we note that both trends may persist in the short term until markets attain more clarity surrounding shifts in global trade policy and their second-order geopolitical impacts.

The asset and wealth management segment has become increasingly material for the consolidated entity, which we view favorably, as management fees exhibit less cyclicality than investment banking fees. Segment results this quarter were mixed, as net revenue contraction of 22% sequentially and 3% year over year was worse than expected, considering assets are about 65% fixed income, but continued net inflows brought assets under supervision up to $3.17 trillion, increasing its long-run earnings potential.

Read Morningstar’s full report on Goldman Sachs.

Sherwin-Williams

• Number of Best Managers Buying the Stock: 3
• Morningstar Price/Fair Value: 1.41
• Morningstar Economic Moat Rating: Wide
• Morningstar Uncertainty Rating: Medium
• Morningstar Style Box: Large Core
• Sector: Basic Materials

The most overvalued company on our list of stocks top managers have been buying, Sherwin-Williams is trading 41% above our $258 fair value estimate.

Morningstar equity analyst Spencer Liberman has this to say about the company’s first-quarter results:

Wide-moat Sherwin-Williams reported first-quarter results that were largely in line with our expectations. Net sales declined 1% year over year, as growth in the paint stores group was offset by weakness in the consumer brands and performance coatings groups. The paint stores group continues to impress as demand for Sherwin’s paint products in residential and commercial end markets drives growth. While the threat of tariffs and a slowdown in gross domestic product growth remain a concern for Sherwin, the company’s direct exposure to tariffs is limited as it produces most paints and coatings in the regions where they are sold. As such, we’ve increased our fair value estimate to $258 from $247 per share.

The paint stores group started the year strong, reporting a 2.5% increase in sales while the segment’s operating margin expanded 120 basis points to 18.4%. Residential repaint and marine end markets continue to perform well, with marine showing consistent strength that has persisted for some time now. Management noted that the pipeline for marine remains robust as well, which we think will help offset weakness in do-it-yourself markets. DIY remained muted, and higher interest rates continue to limit large-scale projects that tend to require some form of financing to complete. Looking ahead, we expect resilient demand in repaint and marine will buoy volumes as weakness in DIY likely persists.

Sherwin’s performance-coatings group reported underwhelming results in the first quarter as industrial end markets remain constrained. Net sales declined almost 5% year over year while the segment reported a 13.3% operating margin, an 80-basis-point decline from a year ago. This was mainly driven by weakness in general industrial and automotive refinish end markets, but was partially offset by strength in packaging. We expect pricing to remain pressured during the year because of softness in industrial and automotive refinish, but packaging demand should offer some relief.

Read Morningstar’s full report about Sherwin-Williams.

UnitedHealth Group

• Number of Best Managers Buying the Stock: 7
• Morningstar Price/Fair Value: 0.55
• Morningstar Economic Moat Rating: Narrow
• Morningstar Uncertainty Rating: High
• Morningstar Style Box: Large Value
• Sector: Healthcare

The most undervalued stock pick among our top managers last quarter, UnitedHealth looks 45% undervalued relative to Morningstar’s $530 fair value estimate. The company has been plagued with negative news this year, including the removal of its CEO and weak results.

Here’s what Morningstar senior equity analyst Julie Utterback had to say in mid-May after media reports surfaced that a criminal probe had been launched into the company’s Medicare Advantage plan:

The Wall Street Journal reported on May 14 that a criminal component had been added to an already-reported civil investigation of UnitedHealth’s risk-rating practices in Medicare Advantage. UnitedHealth later responded that it had not been notified of the criminal probe.

Why it matters: After the media report but before UnitedHealth’s rebuttal, shares were down another 8% in after-hours trading, crashing further in a dismal week for investors that already saw its CEO leave and 2025 guidance suspended.

• The potential for Medicare fraud at the largest Medicare Advantage insurer is spooking investors, and if wrongdoing is eventually found, the monetary damages could be stiff. Assertions under the previous CEO Andrew Witty that risk assessments would solve its current profit challenges look dubious.
• The diversity of UnitedHealth’s operations should shield it somewhat. About half of its profits come from medical insurance, and only about 15% of its global medical membership comes from Medicare Advantage, which looks disproportionately low relative to recent share movement.

The bottom line: After raising our Uncertainty Rating to High following the management and guidance announcement, we are making no further changes to our views of narrow-moat UnitedHealth.

• Positively, UnitedHealth maintains a conservative balance sheet, including gross debt/EBITDA of roughly 2 times and credit ratings in the single-A category. Financially, we suspect the company should be able to ride out gathering storms.
• Shares appear significantly undervalued to us at these levels, but investors should be aware of the elevated uncertainty and potential for share volatility, especially given ongoing regulatory challenges broadly for the industry and specifically for UnitedHealth.

Bears say: UnitedHealth shares have fallen by half in just a month, and current prices imply a further deterioration of profits, representing nearly half of its medical insurance operations in the near term.

Read Morningstar’s full report on UnitedHealth Group.

Caterpillar

• Number of Best Managers Buying the Stock: 3
• Morningstar price/fair value: 0.84
• Morningstar Economic Moat Rating: Wide
• Morningstar Uncertainty Rating: Medium
• Morningstar Style Box: Large Value
• Sector: Industrials

The fourth large-value name on our list of stocks that top managers were buying last quarter, Caterpillar looks undervalued: The stock trades 16% below our $422 fair value estimate.

Here’s what Morningstar equity analyst George Maglares thought of Caterpillar’s recent earnings release:

Caterpillar’s first-quarter 2025 results showed some green shoots across its portfolio with a $5 billion backlog increase and a slightly better full-year outlook compared with last quarter, excluding a potential tariff impact. The earnings call was CEO Jim Umpleby’s farewell performance as the company announced on April 15 that he is handing the reins to COO Joe Creed and transitioning to executive chairman. Creed has been a key player in Caterpillar’s efforts to diversify end markets and capture more of its profit pool via services, which we expect to continue.

The highlight was the potential impact of tariffs on 2025 and beyond. Management presented a range of scenarios, with an unmitigated tariff impact/economic downturn causing a modest revenue decline in 2025 and operating margins of approximately 18% (closer to the midrange of guidance for sales at these levels). Specifically, it estimated an impact of $250 million to $350 million per quarter (of which China accounts for approximately 50%) in the absence of mitigating actions, explaining most of the margin erosion. Management seemed reluctant to detail “mitigating actions” because Caterpillar began implementing “merchandising” programs (effectively price discounting) to bolster sales amid weaker demand in the back half of last year. As such, price increases don’t appear to be a viable near-term option owing to the customer dynamics. While Umpleby expressed cautious optimism for a better deal on tariffs, Creed acknowledged that Caterpillar would have to make substantial investments that are “very difficult to change or pivot,” if the status quo doesn’t improve.

Other highlights include robust and visible tailwinds for power generation solutions to data centers, signals of confidence through capital allocation via $3.7 billion of share repurchases, and ongoing commitment to its “dividend aristocrat” status. We leave our fair value estimate of $422 per share unchanged but will monitor the tariff situation closely.

Read Morningstar’s full report on Caterpillar.

Home Depot

• Number of Best Managers Buying the Stock: 4
• Morningstar Price/Fair Value: 1.25
• Morningstar Economic Moat Rating: Wide
• Morningstar Uncertainty Rating: Low
• Morningstar Style Box: Large Value
• Sector: Consumer Cyclical

Another overvalued stock on our list of stocks that top managers have been buying, Home Depot stock is trading 25% above our fair value estimate of $305.

Morningstar senior equity analyst Jaime Katz has this to say about Home Depot’s business before earnings:

Home Depot is the world’s largest home improvement retailer, delivering more than $159 billion in revenue in 2024. The firm’s wide economic moat rating is based on its economies of scale and brand equity. Home Depot has realized strong historical returns as a result of its scale, operational excellence, and concise merchandising, all of which remain key tenets underlying our modest margin expansion forecast. Its flexible distribution network should help elevate the firm’s brand intangible asset, with faster time to delivery improving the do-it-yourself experience and market delivery centers catering to the pro business. We believe the success of ongoing initiatives should allow for operating margin expansion back to prepandemic levels in the longer term, despite intermittent inflationary pressures and macroeconomic turbulence.

Over time, Home Depot should continue to capture sales growth, bolstered by an aging housing stock, rising home prices, and a shortage in home inventory (consumers updating the homes they remain in). Other internal catalysts for top-line growth could stem from the firm’s efficient supply chain, improved merchandising technology, and penetration of adjacent customer product segments (such as the maintenance, repair, and operations, or MRO, market through the acquisition of HD Supply, or the roofer market via its tie-up with SRS Distribution). Expansion of close categories (like textiles) as well as existing ones (for example, electric tools) could also drive demand.

In our opinion, perpetual improvements in the omnichannel experience should support the firm’s competitive position, even if existing-home sales and turnover remain depressed in the near term. The commitment to better merchandising and an efficient supply chain has led the firm to achieve an adjusted operating margin and returns on invested capital, including goodwill, of 13.8% and 21%, respectively, in 2024. Additionally, Home Depot’s focus on cross-selling products in both its DIY and its pro channel should support stable pricing and volatility in the sales base, helping achieve a modest operating margin lift, with our forecast averaging 14.2% over the next decade.

Read Morningstar’s full report on Home Depot.

Salesforce

• Number of Best Managers Buying the Stock: 5
• Morningstar Price/Fair Value: 0.92
• Morningstar Economic Moat Rating: Wide
• Morningstar Uncertainty Rating: High
• Morningstar Style Box: Large Core
• Sector: Technology

Salesforce rounds out our list of stocks that the best managers have been investing in. This slightly undervalued tech stock is trading 8% below our $315 fair value estimate.

Here’s what Morningstar’s Romanoff had to say about Salesforce’s business ahead of earnings:

Salesforce has established itself as the clear leader in software for all aspects of the customer relationship journey. As the company has matured and growth has slowed, profitability has improved, and the capital allocation strategy has evolved. We think the combination of these factors should continue to compound good earnings growth for years to come.

After introducing the software-as-a-service model to the world, Salesforce has assembled a front-office empire that it can build on for years to come, in our view. Sales Cloud represents the original Salesforce automation product, which streamlined process management for sales leads and opportunities, contact and account data, process tracking, approvals, and territory tracking. Salesforce’s critical differentiator was that the software was accessed through a web browser and delivered over the internet, thus inventing the SaaS software delivery model. Service Cloud brings in customer service applications, and Marketing Cloud delivers marketing automation solutions. Finally, we think Data Cloud helps tie the offerings together. These solutions encompass nearly all aspects of customer acquisition and retention and, in our view, are mission-critical. Salesforce Platform also offers customers a platform-as-a-service solution, complete with the AppExchange, as a way to rapidly create and distribute apps. We believe this further strengthens the substantial community of Salesforce users.

In our view, Salesforce will benefit further from natural cross-selling among its clouds, upselling more robust features within product lines, vertical solutions, pricing actions, and international growth. Salesforce is widely considered a leader in each of its served markets, which is attractive on its own, but the tight integration among the solutions and the natural fit they have with one another make for a powerful value proposition. To that end, more than half of enterprise customers use multiple clouds. Further, customer retention has gradually improved over time and is better than 92%, which we expect to grind higher still in the coming years.

Read Morningstar’s full report on Salesforce.

How Do We Determine Which Stocks the Best Managers Are Buying?

To determine which stocks top managers are investing in, we compared the latest portfolios of these funds with their portfolios three months before. We then calculated a “buy score” for each stock, which is a weighted average that allows us to make apples-to-apples comparisons of the most-purchased stocks. One or two managers making large purchases of a stock could lead to the same buy score as many managers purchasing small amounts of a stock.

Morningstar senior editor Margaret Giles and lead developer Lauren Solberg developed the methodologies and tools required to create this content.