Shopping for stocks when valuations are historically high 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, five 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 two stocks.
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 |
Microsoft (MSFT) |
1.21 |
Strong Buy |
Broadcom (AVGO) |
1.28 |
Strong Buy |
Amazon.com (AMZN) |
1.30 |
Strong Buy |
Smurfit WestRock (SW) |
1.31 |
Strong Buy |
Targa Resources (TRGP) |
1.32 |
Strong Buy |
Boston Scientific (BSX) |
1.32 |
Strong Buy |
S&P Global (SPGI) |
1.33 |
Strong Buy |
Nvidia (NVDA) |
1.34 |
Strong Buy |
Walmart (WMT) |
1.35 |
Strong Buy |
Delta Air Lines (DAL) |
1.36 |
Strong Buy |
GE Aerospace (GE) |
1.38 |
Strong Buy |
Diamondback Energy (FANG) |
1.39 |
Strong Buy |
Wynn Resorts (WYNN) |
1.39 |
Strong Buy |
Danaher (DHR) |
1.39 |
Strong Buy |
Take-Two Interactive Software (TTWO) |
1.39 |
Strong Buy |
United Airlines (UAL) |
1.41 |
Strong Buy |
ServiceNow (NOW) |
1.42 |
Strong Buy |
DexCom (DXCM) |
1.43 |
Strong Buy |
Howmet Aerospace (HWM) |
1.43 |
Strong Buy |
TKO Group (TKO) |
1.43 |
Strong Buy |
SLB (SLB) |
1.43 |
Strong Buy |
Datadog (DDOG) |
1.43 |
Strong Buy |
Insulet (PODD) |
1.44 |
Strong Buy |
Meta Platforms (META) |
1.44 |
Strong Buy |
Expand Energy (EXE) |
1.44 |
Strong Buy |
TJX (TJX) |
1.45 |
Strong Buy |
Hasbro (HAS) |
1.46 |
Strong Buy |
Bio-Techne (TECH) |
1.47 |
Strong Buy |
West Pharmaceutical Services (WST) |
1.47 |
Strong Buy |
DuPont (DD) |
1.47 |
Strong Buy |
Alphabet (GOOGL) |
1.48 |
Strong Buy |
Citizens Financial Group (CFG) |
1.50 |
Strong Buy |
Nucor (NUE) |
1.50 |
Strong Buy |
Trimble (TRMB) |
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.
Boston Scientific
If you've ever undergone a minimally invasive medical procedure, chances are you've used something made by Boston Scientific (BSX). From stents and catheters to pacemakers and implantable defibrillators, BSX is critical to modern medicine.
Analysts say the company's strong pipeline, new product launches and additional acquisitions should continue to support revenue growth and margin expansion.
"BSX has a steady cadence of new product flow across its portfolio and is delivering above-industry growth, with particular outperformance over the past year-plus," notes Oppenheimer analyst Suraj Kalia, who rates shares at Outperform (the equivalent of Buy). "BSX is adding to the portfolio through tuck-in M&A and has several product tailwinds."
Take-Two Interactive Software
Video-game publisher Take-Two Interactive Software (TTWO) owns some of the strongest franchises in the massive industry. From Rockstar Games' Grand Theft Auto (GTA) series to NBA 2K from 2K Games, the company doesn't lack for lucrative hits.
The release of Grand Theft Auto VI should be a major catalyst, but investors and gamers are going to have to be patient. Originally slated for May, TTWO pushed GTA VI's launch date back to November 2026.
As important as GTA is to the company's fortunes, it's hardly a one-trick pony. TTWO releases a new edition of its NBA 2K game annually, while major franchises such as Red Dead Redemption, Borderlands and Civilization have historically helped it report beat-and-raise quarters.
That said, investors need to have confidence in the enduring popularity of GTA before they take the plunge into TTWO stock.
Targa Resources
Targa Resources (TRGP) is a top way to play a rebound in the midstream sector of the oil and gas industry. Analysts like the way it operates in nearly every segment of its industry and adore its geographic diversity.
When it comes to gathering, processing, transporting and storing natural gas and natural gas liquids (NGLs) in places such as the Anadarko and Permian Basins, analysts say Targa "overshadows" other energy companies.
"Expected completion of projects in the Permian and Delaware position Targa for further growth," writes Argus Research analyst John Staszak, who rates shares at Buy.
