Shopping for stocks when markets are trading at record levels — with stretched valuations and heightened volatility to boot — might sound counterintuitive. After all, the idea is to buy low. But there are always select names set to outperform — and that's especially true when market leadership is comparatively narrow.
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. Indeed, as we'll see below, three of Wall Street's top-rated stocks to buy hail from the Magnificent 7. Companies from the healthcare, energy and industrials sectors are ably represented too.
Here's how we found the top S&P 500 stocks to buy now. It's well known that industry analysts are reluctant to slap Sell ratings on the names they cover. There are a bunch of 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.
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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 recommendation of Sell to a total of one stock. (That's not abnormal during raging bull markets, but a couple months ago twice as many S&P 500 stocks carried Sell ratings.)
At the other end of the ratings spectrum stands the Street's highest recommendation of Strong Buy. A total of 14 stocks made the cut there, down from 15 a month ago.
But 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 14 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.
Please note that News Corp. (NWSA), Boston Scientific (BSX) and S&P Global (SPGI) made the Street's list of top-rated S&P 500 stocks this month.
Meanwhile, Meta Platforms (META), NiSource (NI), Danaher (DHR) and Mondelez (MDLZ) fell off.
| Company (ticker) | Analysts' consensus recommendation score | Analysts' consensus recommendation |
|---|---|---|
| Erie Indemnity (ERIE) | 1.00 | Strong Buy |
| UnitedHealth Group (UNH) | 1.30 | Strong Buy |
| Nvidia (NVDA) | 1.32 | Strong Buy |
| Delta Air Lines (DAL) | 1.39 | Strong Buy |
| Amazon.com (AMZN) | 1.41 | Strong Buy |
| Microsoft (MSFT) | 1.41 | Strong Buy |
| Broadcom (AVGO) | 1.42 | Strong Buy |
| Synopsys (SNPS) | 1.44 | Strong Buy |
| GE Aerospace (GE) | 1.47 | Strong Buy |
| S&P Global (SPGI) | 1.48 | Strong Buy |
| Axon Enterprise (AXON) | 1.50 | Strong Buy |
| Boston Scientific (BSX) | 1.50 | Strong Buy |
| News Corp. (NWSA) | 1.50 | Strong Buy |
| United Airlines (UAL) | 1.50 | Strong Buy |
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