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Is JPMorgan Chase & Co. (JPM) The Cheap NYSE Stock to Invest in According to Hedge Funds?
On March 26, Jack Caffrey of JPMorgan Asset Management provided an analysis of market trends in a discussion on CNBC’s ‘Squawk Box’. He emphasized diversified portfolios built around different exposures during periods of volatility. Caffrey believes in the importance of ‘time in the market’ over ‘timing the market’. He highlighted the difficulty in predicting when fear or euphoria will dominate, as some of the best market days follow extreme pessimism. Caffrey also discussed the October sell-offs in 2022 and 2023, where many strategists expected further market tests at levels like 3200 or 3300 on the S&P 500. However, instead of panic selling, the market experienced rebounds in 2023 and 2024. He observed that implied volatility reached the high 20s during recent corrections, but did not indicate widespread panic.
Caffrey also discussed how the MAG7 drives market trends. While these stocks led growth in early 2020, their momentum eventually faded. This led to corrections instead of broadening. Investors began exploring second and third derivative trades stemming from AI developments, such as increased electricity demand and improvements in natural gas markets. He noted that mean reversion often occurs when primary trades become well-understood and widely owned. He suggested that markets would likely be led by earnings rather than valuation. Caffrey acknowledged that while some stocks within the MAG7 have posted earnings growth that makes their valuations more reasonable, traders are increasingly seeking opportunities in overlooked sectors like energy and businesses benefiting from a weaker dollar. For instance, oil prices have remained down despite energy leading the market performance this year.
Stimulus measures in Europe are also shifting from monetary to fiscal policies, which creates additional opportunities for investors.
Our Methodology
We sifted through the Finviz stock screener to compile a list of the top NYSE-listed stocks. We then selected the 11 stocks with a forward P/E ratio under 15, as of April 8, that were also the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Is JPMorgan Chase & Co. (NYSE:JPM) a Cheap NYSE Stock to Invest in According to Hedge Funds?
A group of business people discussing plans around a boardroom table adorned with a financial services company logo.
JPMorgan Chase & Co. (NYSE:JPM) is a financial services company that operates through the Consumer & Community Banking, Commercial & Investment Bank, and Asset & Wealth Management segments. Among other traditional services, it offers multi-asset investment management solutions in equities, fixed income, alternatives, and money market funds to institutional clients and retail investors.
The company’s software engineers have seen a 10% to 20% increase in productivity due to an in-house coding assistant recently. This enabled the company’s 63,000-strong tech workforce to focus on higher-value AI and data projects. Driven by this, Mike Mayo of Wells Fargo reiterated a Buy equivalent Overweight rating on the company with a $300 price target. There are 450 current AI use cases and the CEO projects 1,000 by next year. Additionally, President Daniel Pinto estimates that AI could add $1 billion to $1.5 billion in value.
As for Q4 2024, the company’s Consumer & Community Banking (CCB) segment’s revenue rose by a modest 1% and generated $18.4 billion due to an 11% rise in card outstanding and higher Net Interest Income (NII) in its Card Services business. Around 10 million new card accounts were acquired in 2024 but projections for 2025 are slightly moderate as compared to 2024.
Carillon Eagle Growth & Income Fund stated the following regarding JPMorgan Chase & Co. (NYSE:JPM) in its Q4 2024 investor letter:
“JPMorgan Chase & Co. (NYSE:JPM) also contributed to performance due to optimism regarding the election outcome. Investors expect a wave of deregulation, and a more permissive stance on M&A could bode well for JPMorgan’s capital markets businesses.”
Overall, JPM ranks 1st on our list of cheap NYSE stocks to invest in according to hedge funds. While we acknowledge the growth potential of JPM, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than JPM but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
