Shopping for stocks when markets are at record levels and valuations are stretched might not feel like the best idea. The goal, after all, is to buy low.
However, the outlook for equities has brightened considerably in light of upbeat corporate profit outlooks and lower interest rates. Besides, there are always select names set to outperform.
Although the Magnificent 7 stocks have done much of the bull market's heavy lifting, that hardly means these names are doomed to underperform from here.
As we'll see below, four of Wall Street's top-rated S&P 500 stocks to buy hail from the Magnificent 7. Companies from the financial, energy and industrials sectors are ably represented, too.
How we found analysts' top-rated S&P 500 stocks
It's well known that industry analysts are reluctant to slap Sell ratings on the names they cover. There are several reasons for this, some more defensible than others.
What's less commonly understood is that Strong Buy recommendations, while not nearly as rare as Sell calls, are in somewhat short supply, too.
If you run a screen of the S&P 500 using data from S&P Global Market Intelligence, you'll see that analysts assign a consensus Sell recommendation to only one stock.
At the other end of the ratings spectrum stands the Street's highest recommendation of Strong Buy. A total of 35 stocks made the cut there as bullish sentiment soars.
First, a note on our methodology: S&P Global Market Intelligence surveys analysts' stock recommendations and scores them on a five-point scale, where 1.0 equals Strong Buy and 5.0 means Strong Sell.
Any score of 2.5 or lower means that analysts, on average, rate the stock a Buy. The closer the score gets to 1.0, the stronger the Buy call.
In other words, lower scores are better than higher scores.
Have a look at the chart below to see the 35 stocks in the S&P 500 that score an elite Strong Buy recommendation from industry analysts. Investors who fear it's too late to buy Amazon.com (AMZN), Microsoft (MSFT) or Nvidia (NVDA) will be happy to see they easily made the list.
Company (Ticker) |
Analysts' consensus recommendation score |
Analysts' consensus recommendation |
|---|---|---|
Erie Indemnity (ERIE) |
1.00 |
Strong Buy |
Texas Pacific Land (TPL) |
1.00 |
Strong Buy |
Microsoft (MSFT) |
1.26 |
Strong Buy |
Broadcom (AVGO) |
1.28 |
Strong Buy |
Amazon.com (AMZN) |
1.30 |
Strong Buy |
Danaher (DHR) |
1.30 |
Strong Buy |
Targa Resources (TRGP) |
1.32 |
Strong Buy |
S&P Global (SPGI) |
1.32 |
Strong Buy |
Boston Scientific (BSX) |
1.32 |
Strong Buy |
Walmart (WMT) |
1.36 |
Strong Buy |
Delta Air Lines (DAL) |
1.36 |
Strong Buy |
Nvidia (NVDA) |
1.37 |
Strong Buy |
Take-Two Interactive Software (TTWO) |
1.38 |
Strong Buy |
Teledyne Technologies (TDY) |
1.40 |
Strong Buy |
Meta Platforms (META) |
1.41 |
Strong Buy |
Howmet Aerospace (HWM) |
1.43 |
Strong Buy |
West Pharmaceutical Services (WST) |
1.43 |
Strong Buy |
VICI Properties (VICI) |
1.43 |
Strong Buy |
GE Aerospace (GE) |
1.44 |
Strong Buy |
DexCom (DXCM) |
1.44 |
Strong Buy |
Wynn Resorts (WYNN) |
1.44 |
Strong Buy |
ServiceNow (NOW) |
1.44 |
Strong Buy |
Diamondback Energy (FANG) |
1.45 |
Strong Buy |
Fiserv (FI) |
1.45 |
Strong Buy |
United Airlines Holdings (UAL) |
1.45 |
Strong Buy |
Trimble (TRMB) |
1.45 |
Strong Buy |
Insulet (PODD) |
1.46 |
Strong Buy |
Hasbro (HAS) |
1.46 |
Strong Buy |
Expand Energy (EXE) |
1.46 |
Strong Buy |
Bio-Techne (TECH) |
1.47 |
Strong Buy |
DuPont (DD) |
1.47 |
Strong Buy |
TJX (TJX) |
1.48 |
Strong Buy |
SLB (SLB) |
1.48 |
Strong Buy |
Nucor (NUE) |
1.50 |
Strong Buy |
Steel Dynamics (STLD) |
1.50 |
Strong Buy |
As much as AI is driving sentiment, analysts see plenty of reasons to be bullish on names across multiple sectors. Here we highlight what Wall Street has to say about three lesser-known stocks on the list this month.
DexCom
DexCom (DXCM) stock is a long-term market beater that's on sale right now, bulls say.
Shares in the maker of continuous glucose monitoring devices for diabetes patients are trailing the broader market by a painful 30 percentage points so far this year — but that just has them priced for outsize returns going forward.
A regulatory warning and concerns about reimbursement rates have pressured DXCM stock, but analysts say those overhangs are overdone.
"We are encouraged by accelerating trends and coverage expansion with meaningful top-line and margin drivers coming into view," writes Matthew Taylor, senior equity research analyst at Jefferies, who rates the health care stock at Buy. "We continue to be bullish on DXCM, seeing beat and raise quarters ahead."
GE Aerospace
GE Aerospace (GE), which retained the classic GE ticker following the spinoff of GE Vernova (GEV) in 2024, has seen its shares soar as it returns gobs of cash to shareholders.
Bulls credit canny management and cost-savings initiatives, among other efforts, to boost results.
"We continue to see GE as a best-in-class operator and innovator," writes BofA Securities analyst Ronald Epstein, who rates shares at Buy "GE's operational excellence and leading product base continue to pay dividends, with the company's updated outlook reflecting continued positive momentum."
GE stock is up about 80% so far this year and Wall Street sees more outperformance ahead. Of the 16 analysts covering the stock surveyed by S&P Global Market Intelligence, 12 call it a Strong Buy, two have it at Buy and one calls it a Sell.
SLB
Bulls say SLB (SLB), the oilfield services giant formerly known as Schlumberger, is trading at a discount given concerns over a "wobbly pricing environment." That makes SLB — a company with "industry-leading margins" — a bargain at current levels.
True, North American revenue dipped sequentially last quarter, but the international segment showed growth. Additionally, the company's acquisition of ChampionX, which closed in July, should be strategically helpful in the short term, notes Stewart Glickman, energy equity analyst at CFRA Research, who rates the energy stock at Buy.
Then there's all the cash SLB is returning to shareholders. The company recently reaffirmed its plan to spend $4 billion on share repurchases and dividends in 2025, up from $3.27 billion in 2024.
