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14 Best US Stocks For Foreign Investors
Sheryar Siddiq
11 min read

In This Article:

In this article, we discuss the 14 best US stocks for foreign investors. If you want to read about some more US stocks that foreigners should consider for their portfolios, go directly to the 5 Best US Stocks For Foreign Investors.

Late last year, investors flocked to Treasuries amid expectations of rate cuts by the Fed as early as the first quarter of this year. This surge in demand caused government bond prices to rebound sharply from 16-year lows. However, many investors are now reassessing their positions following robust U.S. jobs data and a cautious tone from the Fed, with the central bank recently warning that a strong economy could lead to inflationary pressures if rates are reduced prematurely. While investors still anticipate multiple rate cuts this year, there is now greater uncertainty regarding the timing and extent of the Fed's monetary easing measures.

That said, investors would do well to recall that the NASDAQ Composite experienced a sharp decline of over 33% in 2022 amid concerns of a recession. Even during the pandemic-induced volatility of 2020, characterized by surges in tech-heavy growth stocks, the index closed the year with an impressive gain of nearly 44%. It appears that this positive momentum is carrying into 2024, with many investors maintaining confidence in their tech holdings and anticipating further profitability as the year unfolds. The latest growth indicators suggest that the index is poised for another record-setting year in the market.

On February 1, Farzin Azarm from Mizuho Americas discussed current trends in the US tech sector and investors' continued focus on tech stocks during an appearance on CNBC. Azarm suggests that the persistent favoritism towards US tech stocks is leading to a disregard for stocks from other regions, particularly those from China. He posits that a significant shift in the US tech and AI sectors is necessary to redirect investment interest towards Chinese stocks. Azarm notes that investors, having already allocated substantial funds to pricey American stocks, are hesitant to further invest in similarly expensive companies.

Given the circumstances outlined above, it's no wonder that renowned companies like Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN) remain top contenders as some of the best American stocks to invest in, both in the eyes of analysts and investors.

14 Best US Stocks For Foreign Investors
14 Best US Stocks For Foreign Investors

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Our Methodology

For this list, we utilized a stock screener to identify stable companies exhibiting revenue growth exceeding 10%. Subsequently, we ranked them by market capitalization to highlight the largest companies. Our selection process focused on identifying the top US stocks for foreign investors, considering both revenue growth and hedge fund sentiment as of the third quarter of 2023. The list is organized in ascending order based on the number of hedge fund holders. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.

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