10 Stocks the Best Fund Managers Have Been Buying in 2025

In the third quarter of 2025, plenty of unanswered questions remain about tariffs, economic growth, inflation, and interest rates. And those uncertainties have led to an edgy US stock market, where investors are risk-on one week and risk-off the next.

Where has the “smart money” been finding investment opportunities in this year’s 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-eight 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.

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. American International Group AIG
2. Interactive Brokers Group IBKR
3. Taiwan Semiconductor Manufacturing TSM
4. GE Aerospace GE
5. Altria Group MO
6. ExxonMobil XOM
7. The Trade Desk TTD
8. CME Group CME
9. Becton Dickinson BDX
10. O’Reilly Automotive ORLY

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 Aug. 22.

American International Group

• Number of Best Managers Buying the Stock: 4
• Morningstar Price/Fair Value: 1.06
• Morningstar Style Box: Mid Value
• Sector: Financial Services

The best fund managers’ top stock pick during the latest quarter was American International Group, one of three financial-services names on our list. Morningstar thinks this no-moat stock is fairly valued today.

Here’s what Morningstar senior analyst Brett Horn had to say after AIG’s recent earnings report:

AIG bounced back in the second quarter to deliver a relatively strong return.

Why it matters: AIG achieved an 11% annualized return on equity for the quarter, marking a significant improvement compared with recent performances.

• Underwriting performance is holding firm, with the underlying combined ratio coming in at 88.4%, compared with 87.6% last year. We think underwriting margins for AIG and its commercial lines peers have likely peaked, and that holding near recent levels is a positive. Compared with peers, AIG might have some additional upside as management works to take out costs. The company saw a 50-basis-point year-over-year improvement in its expense ratio.
• Net written premiums were up 1% year over year on an adjusted basis, as 4% growth in commercial lines offset a 3% decline in personal lines. However, the decline in personal lines was driven by a more aggressive use of reinsurance, and we are generally positive on efforts to derisk the book.

The bottom line: We will maintain our $77 fair value estimate for the no-moat company and see shares as fairly valued.

• Like its peers, AIG has been benefiting from higher interest rates. In the quarter, net investment income excluding equity investments was up 7% year over year, with a decline in income from short-term securities partially offsetting improving yields for longer-term securities. While this is providing a boost for now, history suggests that underwriting results react to interest rate changes over time.
• At this point in its turnaround efforts, we think the company has proved its ability to generate acceptable returns. Still, we would like to see the company move toward excess returns, given favorable market conditions. In our view, this quarter is a positive sign on this front, but the company still has a way to go.

Read Morningstar’s full report on American International Group.

Interactive Brokers Group

• Number of Best Managers Buying the Stock: 1
• Morningstar Price/Fair Value: 1.36
• Morningstar Style Box: Mid Growth
• Sector: Financial Services

In addition to being among the top buys of the best fund managers this year, Interactive Brokers is also one of the more expensive names among the group: It looks 36% overvalued relative to Morningstar’s fair value estimate of $46.

Here’s what Morningstar director Sean Dulop had to say after Interactive Brokers reported earnings:

Interactive Brokers released its second-quarter earnings for 2025, with strong trading volumes aligning with reports from its large banking competitors.

Why it matters: While trading volumes were strong, we’re most impressed with Interactive Brokers’ continued ability to attract new customers (32% annual growth) and customer equity (up 34%) to its platform. We view this as a testament to superior order execution and product access that underpin our wide moat rating for the firm.

• The firm’s heavily automated platform has allowed it to onboard new clients with very little incremental cost, seeing operating margins expand 290 basis points annually, as reported, to a striking 74.6%. The only significant area of increasing costs was marketing and development, which makes sense for a firm growing as quickly as Interactive Brokers is, particularly as it expands its reach with retail clientele.
• Trading volumes swelled by 31% in equities, 24% in options, and 18% in futures, mirroring strong results reported at trading banks like wide-moat Goldman Sachs and Morgan Stanley.

The bottom line: After digesting results, we’re raising our fair value estimate for Interactive Brokers to $46 from $42 previously, largely attributable to a 10-basis-point increase in our midcycle net interest margin forecast, bringing our estimates in line with 2018-19 levels. About $1.0 per share can be attributed to quarterly outperformance, with the firm’s $1.48 billion in quarterly revenue and $0.51 in diluted earnings per share comfortably edging our $1.34 billion and $0.45 EPS estimates.

• While we agree with management that the current environment is an excellent one for brokerage firms, we don’t believe that downside risks, namely trade policy uncertainty, a slowing US economy, and higher near-term inflation, are adequately priced in.
• Still, shares continue to look expensive and rose 5% in after-hours trading.

Read Morningstar’s full report on Interactive Brokers Group.

Taiwan Semiconductor Manufacturing

• Number of Best Managers Buying the Stock: 5
• Morningstar Price/Fair Value: 0.76
• Morningstar Style Box: Large Growth
• Sector: Technology

The first undervalued stock on our list of the names top fund managers are buying, shares of wide-moat Taiwan Semiconductor, are trading 24% below our $306 fair value estimate.

Here’s what Morningstar analyst Phelix Lee had to say about Taiwan Semiconductor’s recent results:

TSMC raised its full-year revenue growth guidance by 30% in USD terms from the mid-20s. Its June-quarter revenue was TWD 934 billion ($30.1 billion), up 11% sequentially. Gross margin fell 17 basis points from the prior quarter to 58.6%.

Why it matters: Strong demand from AI and higher utilization in mature process nodes support TSMC’s higher full-year guidance. Data center customers are investing regardless of tariffs and have already shown excitement to move to upcoming nodes.

• Management’s comments back our view that 2026 capital expenditure would be modestly higher than 2025’s $38 billion-$42 billion. They have said the full-year outlook and capital spending budgets factor in conservatism from tariffs and other geopolitical risks, but demand remains robust.
• We’re more confident in TSMC reaching gross margins in the high 50s long-term as we see the 2 nm node is priced with larger markups than 3 nm, and TSMC is broadening the appeal of 3 nm-7 nm nodes to cost-conscious customers as equipment finishes depreciation.

The bottom line: We hike our fair value estimates for TSMC to TWD 1,800 from TWD 1,700 ($306 from $262) on better guidance and our long-term outlook. TSMC is undervalued as the market is overestimating tariff effects and underestimating the longevity of AI investments.

• We boost our revenue and EPS estimates for 2025-29 by 5% and 9%, respectively, on a higher AI contribution and better outlook in industrial and smart-home markets.

Coming up: The US may announce a trade deal with Taiwan by the Aug. 1 deadline, but it may have a limited effect on TSMC. It has ample 4 nm capacity that can be used by US clients, should tariffs spiral from expectations of about 20%, judging by trade deals already made.

Between the lines: TSMC’s capital spending in 2026 should focus on meeting AI demand. The cautious 2026 outlook of its supplier ASML could mean TSMC is outspending Intel and Samsung even more, reducing the latter’s chances of catching up.

Read Morningstar’s full report on Taiwan Semiconductor Manufacturing.

GE Aerospace

• Number of Best Managers Buying the Stock: 3
• Morningstar Price/Fair Value: 1.00
• Morningstar Style Box: Large Growth
• Sector: Industrials

The third wide-moat stock on our list of top buys from the best managers, GE Aerospace stock trades right around our $266 fair value estimate.

Morningstar analyst Nicolas Owens had this to say after GE Aerospace reported earnings in July:

GE Aerospace’s second-quarter commercial engines segment revenue grew 30% to $8 billion and earned a 28% operating margin. Defense revenue and margin were flatter, and management raised its full-year and 2028 revenue and profit expectations considerably.

Why it matters: GE’s commercial engine business delivered revenue and profit in the second quarter, exceeding even what we had expected for the third quarter. The company appears to have accelerated its recovery from supply chain disruptions, which had slowed its progress in meeting engine demand in 2024.

• We admire GE’s evident commitment to ongoing process improvements, which allow it to increase throughput in its service business and overall productivity while managing a volatile supply chain. These efforts and their result lend credibility to management’s claims that it can maintain and increase operating margins despite inflationary cost pressure.
• Management upped its near and long-term business expectations, including raising its 2028 operating profit forecast from $10 billion to $11.5 billion. We see the target as eminently achievable, based on our detailed forecast of upcoming demand for engine overhauls and continued aircraft utilization.

The bottom line: We have raised our fair value estimate for wide-moat GE Aerospace’s shares to $266 from $238, reflecting increased confidence in our forecast for continued service margin expansion. The shares trade within 2% of our fair value estimate; however, we anticipate that the firm will continue to enhance its dividend and share repurchase programs over time.

Read Morningstar’s full report on GE Aerospace.

Altria Group

• Number of Best Managers Buying the Stock: 1
• Morningstar Price/Fair Value: 1.06
• Morningstar Style Box: Large Value
• Sector: Consumer Defensive

Altria Group is the only consumer defensive name on our list of stocks that top investors have been investing in. Shares of the wide-moat company trade 6% above our $64 fair value estimate.

Here’s Morningstar senior analyst Kristoffer Inton’s take on Altria’s earnings report in late July:

Altria reported second-quarter adjusted EPS growth of 8.3% to $1.44, as smokeable adjusted operating margin expanded 2.9 percentage points to 64.1% despite a 9.9% volume decline. Oral tobacco net revenue grew 6.0% and adjusted operating margin expanded 3.1 percentage points to 68.7%.

Why it matters: Altria’s main advantage is the dominance of its Marlboro brand in the US cigarette market. Its ability to leverage it into massive free cash flow to fund investment in reduced-risk products and sizable returns to shareholders remains intact despite a challenging consumer environment.

• Marlboro continues to take share in the challenged but very profitable premium cigarette segment, expanding another 20 basis points to 59.5%. Meanwhile, Altria’s expansion of the Basic brand to capitalize on the growing discount segment continues to win share with minimal cannibalization.
• Altria lost the patent appeal for NJOY, so its vape device remains off market. Management sounded optimistic for a redesign or other alternative to get it back on shelves, so we aren’t concerned about the long-term impact. Illicit flavored vapes continue to dominate the market for now anyway.

The bottom line: We expect to raise our $60 fair value estimate for wide-moat Altria by a mid-single-digit percentage. The increase stems from greater margin expansion than we previously expected, with year-to-date adjusted operating margin of 64.5% exceeding our preprint forecast of 62.8%.

• Management raised the lower end of its full-year adjusted EPS guidance to $5.35-$5.45 (from $5.30). We expect to raise our preprint forecast of $5.32 on higher margins.
• Despite our expected increase, shares look fairly valued but offer an attractive 6.9% dividend yield.

Big picture: The US vape market continues to be plagued by illicit flavored disposal products being imported mostly from China. We think lost tax revenue and the flouting of US Food and Drug Administration bans will eventually lead to increased enforcement.

Read Morningstar’s full report on Altria.

ExxonMobil

• Number of Best Managers Buying the Stock: 2
• Morningstar Price/Fair Value: 0.82
• Morningstar Style Box: Large Value
• Sector: Energy

Another undervalued company on our list of stocks top managers have been buying, ExxonMobil is trading 18% below our $135 fair value estimate.

Morningstar director Allen Good has this to say about the company’s second-quarter results:

Exxon’s second-quarter earnings surpassed market expectations, falling to $7.1 billion from $9.2 billion a year ago, mainly on lower oil prices and refining margins. But strong volume growth, further structural cost reduction, and contributions from new projects mitigated the impact of lower prices.

Why it matters: ExxonMobil aims to differentiate itself from its peers via greater earnings and cash flow growth potential. The quarter provides evidence that the key tenets of its plan are progressing and ultimately increasing its earnings capacity.

• Production of 4.6 million barrels of oil equivalent per day was higher by 1.7% from the first quarter. Management noted this was the highest second-quarter mark since the Exxon-Mobil merger 25 years ago. Exxon plans to produce 5.4 mmboe/d in 2030.
• Structural cost reductions totaled $1.4 billion year to date, reaching $13.5 billion cumulatively since 2019, and on track to reach the goal of $18.0 billion by 2030.

The bottom line: Our narrow moat rating and $135 fair value estimate are unchanged, leaving the shares trading at nearly a 20% discount. We think the market is not fully crediting Exxon with its 2030 targets, including return levels, given concerns about delivery, capital discipline, and future commodity demand.

• We see the path as highly achievable and expect management to deliver. We rate the probability of repeating past missteps in the chase for growth as low. Meanwhile, Exxon’s portfolio and growth opportunities are of higher quality than in the recent past.
• Although Chevron now has a Guyana stake as well, one key difference is Exxon’s Permian strategy. While Chevron is moving toward flat production and harvesting cash flow, Exxon is planning for growth to and beyond its 2030 target of 2.3 mmboe/d.

Read Morningstar’s full report about Exxon Mobil.

The Trade Desk

• Number of Best Managers Buying the Stock: 2
• Morningstar Price/Fair Value: 0.65
• Morningstar Style Box: Mid Growth
• Sector: Communication Services

The most undervalued stock pick among our top managers last quarter, The Trade Desk looks 35% undervalued relative to Morningstar’s $82 fair value estimate.

Here’s what Morningstar analyst Mark Giarelli had to say in August when The Trade Desk tanked after earnings:

The Trade Desk sold off more than 30% in after-hours trading after reporting second-quarter earnings that exceeded management guidance by 2%. However, this was paired with third-quarter guidance that appears weak relative to historical precedent. Customer retention remains strong at 95%.

Why it matters: TTD is back near April lows in what seems to be a classic ad tech dynamic where decent quarters can still be punished if there is any sniff of growth durability fears. Management said connected TV, TTD’s largest segment, continues to grow rapidly.

• Nothing appears structurally wrong with the business. We believe that CTV has a considerable runway for growth. Client adoption is ramping nicely for TTD’s new programmatic operating system, Kokai. Artificial intelligence ad-generation tools already exist on the platform, too.
• According to eMarketer, the spread between CTV viewership time (high) and CTV’s share of US total ad spending (low) is widening, which informs our belief that it is underutilized. We believe this spread will narrow, and this trend should disproportionately benefit TTD.

The bottom line: We maintain our narrow moat rating, and we view the shares as undervalued at more than a 30% discount to our $82 fair value estimate. We view the current risk/reward profile as attractive.

• Making it easier for small to midsize businesses to adopt Kokai seems like an appealing upside optionality, as it would expand beyond the current customer mix that is primarily large, multinational companies. TTD appears willing to explore this opportunity, and we encourage it.
• Should TTD expand its customer mix beyond the largest companies, we expect operating margins to benefit, thanks to the low marginal cost of adding more customers relative to the marginal revenue derived. This expansion would culminate in direct competition with AppLovin.

Read Morningstar’s full report on The Trade Desk.

CME Group

• Number of Best Managers Buying the Stock: 2
• Morningstar Price/Fair Value: 1.04
• Morningstar Style Box: Large Value
• Sector: Financial Services

The third financial-services name on our list of stocks that top managers were buying last quarter, CME Group looks fairly valued: The stock trades 4% above our $260 fair value estimate.

Here’s what Morningstar analyst Michael Miller thought of CME’s recent earnings release:

CME reported another strong quarter, thanks to high trading volume and good expense management. Revenue increased 10.4% from last year to $1.9 billion, and diluted earnings per share increased 16.1% to $2.81.

Why it matters: The shares remain relatively unchanged following the earnings announcement, likely due to the market already being aware of CME’s strong trading volume through its monthly volume releases.

• CME receives more than 80% of its revenue from transaction fees. As a result, the firm is typically a beneficiary of increased volatility and uncertainty, as it drives higher trading volume for the company’s futures, often allowing for countercyclical behavior from the firm.
• Current market conditions are ideal for CME. Average daily volume for the firm’s futures contracts rose 16% from last year to 30.2 million per day, a record for the firm. Every asset class saw growth, but CME’s interest rate futures were the star performers, with a 20% increase in average daily volume.

The bottom line: We will maintain our fair value estimate of $245 for wide-moat CME. We see the shares as modestly overvalued at the current price.

• While the first quarter was another strong quarter for CME, we recommend against extrapolating too much long-term growth from these results, as trading volume can be volatile from quarter to quarter.
• That said, if economic uncertainty persists, we expect the firm to be a beneficiary through higher trading volume. Moreover, the firm also benefits from stubbornly high interest rates through increased interest income on client collateral.

Key stats: As usual, CME did an excellent job of managing its costs during the quarter. Operating expenses increased by 5.8% from the previous year to $562.7 million. CME benefits from a mostly fixed cost structure, allowing the benefit of higher trading revenue to be passed directly to the bottom line.

Read Morningstar’s full report on CME Group.

Becton Dickinson

• Number of Best Managers Buying the Stock: 3
• Morningstar Price/Fair Value: 0.74
• Morningstar Style Box: Mid Value
• Sector: Healthcare

Another attractively undervalued stock on our list of stocks that top managers have been buying, Becton Dickinson stock is trading 26% below our fair value estimate of $270.

Morningstar director Alex Morozov had this to say about Becton Dickinson after earnings:

Becton Dickinson reported its third-quarter earnings with revenue increasing organically by 3%, beating FactSet consensus. The company has raised its full-year earnings per share guidance to a range of $14.30-$14.45. Shares are up 9% on the news.

Why it matters: The company began its recovery, supported by slight year-over-year increases in both gross margin and operating margin. Yet, stronger and continuous growth in both sales and profitability is required to restore investor confidence fully.

• The urology and critical care segment recorded double-digit growth in its PureWick product, while biosciences remained in a decline lasting over a year. Diagnostics sales fell further due to decreased demand for point-of-care testing and BD BACTEC (blood culture analysis) products.
• China continued to be a headwind for the medication delivery solutions and specimen management segments.

The bottom line: We are maintaining our $270 fair value estimate and narrow moat rating. We view shares as currently undervalued, trading in 5-star territory.

• In contrast to our expectations, the market remains skeptical that mid-single-digit growth will resume once the economic environment stabilizes.

Coming up: Becton Dickinson has announced the early completion of its $1 billion share buyback program, now set to conclude in the fourth quarter. We view this positively, as the company’s shares continue to trade at a significant discount to their fair value.

• Becton Dickinson remains committed to finalizing the spin-off of its biosciences and diagnostic solutions businesses to Waters.

Read Morningstar’s full report on Becton Dickinson.

O’Reilly Automotive

• Number of Best Managers Buying the Stock: 2
• Morningstar Price/Fair Value: 1.65
• Morningstar Style Box: Large Core
• Sector: Consumer Cyclical

O’Reilly Automotive rounds out our list of stocks that the best managers have been investing in. It’s also the most overvalued stock on the list, trading 65% above our $62 fair value estimate.

Here’s what Morningstar’s Inton had to say about O’Reilly Automotive after earnings:

Top-line growth accelerated in O’Reilly’s second quarter to 6.0%, underpinned by 4.1% comparable store sales growth and 67 new stores, more than double the 27 opened in the year-ago quarter. Operating margin was flat at 20.2%.

Why it matters: O’Reilly continued to leverage its expansive hub-and-spoke distribution network to drive growth in both the professional and do-it-yourself channels, which grew 9.1% and 3.5%, respectively. We expect it to continue to take share against smaller peers in the fragmented industry.

• As evidence of its advantage and continued share gains, particularly in the pro channel, O’Reilly’s comparable sales growth far exceeded no-moat Genuine Parts’ 0.4% growth in automotive comparable sales.
• Given the strong performance in the first half of 2025, management raised its full-year comparable store sales growth guidance to 3.0%-4.5%, up from 2.0%-4.0%. It maintained its target of 200-210 net new store openings, in line with our pre-earnings forecast of 202.

The bottom line: We don’t expect a material change to our $62 per share fair value estimate for wide-moat O’Reilly. The continued strong performance supports our long-term outlook for 6% annual topline growth, with the bulk of the growth coming from the professional channel.

• Shares continue to look overvalued, trading at nearly 33 times our preannouncement 2025 earnings. We think the market overestimates industry growth in the longer term, focused on recent years’ low-double-digit percentage growth and overlooking the long-term trend in the low-single digits.

Key stats: O’Reilly repurchased another $617.0 million of its shares during the second quarter, bringing year-to-date purchases to $1.18 billion. We’d much rather see buybacks when shares are undervalued or perhaps a dividend instead. Still, debt remains well in control at just over 2 times EBITDAR.

Read Morningstar’s full report on O’Reilly Automotive.

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.