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. At the same time, a rotation out these names has capital flowing to other, sometimes sleepier, sectors.
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, health care 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 36 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, in which 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 36 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 |
Broadcom (AVGO) |
1.22 |
Strong Buy |
Microsoft (MSFT) |
1.23 |
Strong Buy |
Boston Scientific (BSX) |
1.24 |
Strong Buy |
Wynn Resorts (WYNN) |
1.26 |
Strong Buy |
Take-Two Interactive Software (TTWO) |
1.28 |
Strong Buy |
Delta Air Lines (DAL) |
1.31 |
Strong Buy |
Trimble (TRMB) |
1.31 |
Strong Buy |
Meta Platforms (META) |
1.31 |
Strong Buy |
Smurfit WestRock (SW) |
1.33 |
Strong Buy |
Targa Resources (TRGP) |
1.33 |
Strong Buy |
Amazon.com (AMZN) |
1.34 |
Strong Buy |
United Airlines Holdings (UAL) |
1.35 |
Strong Buy |
S&P Global (SPGI) |
1.35 |
Strong Buy |
Nvidia (NVDA) |
1.35 |
Strong Buy |
TKO Group Holdings (TKO) |
1.35 |
Strong Buy |
Howmet Aerospace (HWM) |
1.36 |
Strong Buy |
ServiceNow (NOW) |
1.36 |
Strong Buy |
Autodesk (ADSK) |
1.38 |
Strong Buy |
Monolithic Power Systems (MPWR) |
1.38 |
Strong Buy |
Visa (V) |
1.38 |
Strong Buy |
Diamondback Energy (FANG) |
1.39 |
Strong Buy |
GE Aerospace (GE) |
1.39 |
Strong Buy |
Walmart (WMT) |
1.40 |
Strong Buy |
Danaher (DHR) |
1.40 |
Strong Buy |
Alphabet (GOOGL) |
1.40 |
Strong Buy |
Insulet (PODD) |
1.42 |
Strong Buy |
Vistra (VST) |
1.43 |
Strong Buy |
Hasbro (HAS) |
1.43 |
Strong Buy |
TJX (TJX) |
1.43 |
Strong Buy |
Datadog (DDOG) |
1.43 |
Strong Buy |
Steel Dynamics (STLD) |
1.45 |
Strong Buy |
Mastercard (MA) |
1.46 |
Strong Buy |
Expand Energy (EXE) |
1.46 |
Strong Buy |
DuPont (DD) |
1.47 |
Strong Buy |
DexCom (DXCM) |
1.48 |
Strong Buy |
As much as artificial intelligence (AI) is driving capital spending and market 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 less sexy stocks on the list this month.
Autodesk
Autodesk (ADSK), like most software stocks, is taking a beating on fears that AI could disrupt its business. But bulls say the industry leader in 3D computer-assisted design is positioned to reap its own rewards from AI.
The company best known for AutoCAD and Revit is transitioning into a higher margin AI platform. Rather than just license its software, Autodesk is leveraging AI to supercharge its offerings. Autodesk Construction Cloud and other products are increasingly driving revenue growth.
"Autodesk is moving to create generative AI models that can be deployed for a variety of use cases," writes Argus Research analyst Joseph Bonner, who rates the tech stock at Buy. "New AI features are also driving the company’s transition toward more consumption and outcome based monetization models."
With shares down about 20% over the past 52 weeks, ADSK is priced for market-beating upside, bulls say.
DexCom
DexCom (DXCM) stock is off about 20% over the past year, but bulls say that makes it a bargain buy.
A regulatory warning and concerns about reimbursement rates have pressured DXCM stock, but analysts say those overhangs are overdone.
"We see shares as disconnected from fair value given 2025 challenges that we expect to subside in 2026," writes Jefferies analyst Matthew Taylor, who rates DXCM stock at Buy.
The analyst says insurance coverage for non-insulin T2 is likely in the near term, and is "a major catalyst" for the industry. Additionally, DXCM's margins should benefit from the launch of its 15-day wearable sensor, a better sales mix and leveraging its new plant in Malaysia.
Jefferies, which calls DexCom a Franchise Pick (one of its best ideas), has plenty of company on the Street. Shares have carried a consensus Strong Buy recommendation for more than a year.
Visa
Shares in Visa (V) are off about 5% over the past year, but that just has them priced for outperformance amid the relentless war on cash, bulls say.
"Visa continues to be well positioned to gain share in the long-term shift from paper to card-based payments," writes Oppenheimer analyst Rayna Kumar, who rates shares at Outperform (Buy). "Visa remains one of our top ideas."
The nation's largest payments processor is enjoying massive growth in value-added services, such as fraud protection, consulting and data analytics. Not only are these high-margin services; they create higher switching costs for banks and merchants. This stickiness helps Visa hold a dominant position in the business-to-business space.
And while this member of the Dow Jones Industrial Average is a long-time favorite of Warren Buffett – he first added Visa to the Berkshire Hathaway stock portfolio in 2011 – the Street hasn't been this collectively bullish on the name in 16 years.
