Is PepsiCo, Inc. (PEP) the Best Buy-the-Dip Stock to Buy Now?

We recently published a list of 11 Best Buy-the-Dip Stocks to Buy Now. In this article, we are going to take a look at where PepsiCo, Inc. (NASDAQ:PEP) stands against other best buy-the-dip stocks to buy now.

As volatility rises, AllianceBernstein believes that staying invested remains a strategic priority to capture the long-term return potential in a broadening market. Global equities saw fresh difficulties in Q1 2025 amidst increased trade-war worries and developments in AI. As per the firm, bouts of volatility and a cloudy outlook highlighted the increased importance of diversification, valuations, and company fundamentals.

Realignment of Earnings

As per AllianceBernstein, recent shifts in equity return patterns highlight a deeper look at longer-term earnings trends. Over the previous 15 years, the US corporate earnings growth managed to outpace that of the non-US companies, reflected by the MSCI EAFE Index. The firm believes that, before 2010, this wasn’t always the scenario. Its research demonstrated that in 3 of the 4 decades since 1970, non-US earnings surpassed US earnings. This year, US corporate earnings growth is projected to come closer in line with that of earnings growth of the rest of the world, says AllianceBernstein. At the same time, the equity valuations outside the US remain at a significant discount, considering the 2025 forecast earnings.

Despite a difficult quarter, the firm opines that the US stocks are critical to any diversified allocation. Over the last 60 years, US earnings growth has continued to rise consistently, tackling significant economic and geopolitical shocks. Unshakeable US advantages— which span from innovation to education to corporate culture— form a critical factor for the equity returns. Overall, the firm believes that a US allocation with disciplined active portfolios throughout the style spectrum is the correct way to tap into the dynamic market.

READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.

Measures Likely to Help US Stocks

According to BlackRock, the US is home to some renowned and innovative companies. The country remains at the forefront of the AI infrastructure buildout and a frontrunner on the global stage when it comes to both R&D spending and patent applications. IP laws continue to stimulate such an innovative impulse. As per the firm, the US possesses over half the world’s “unicorn” companies. According to them, any moves toward policy targeting deregulation can further accelerate the innovative edge.

These measures contribute to the firm’s positive long-run outlook for US stocks. Over the near term, it anticipates that the market will broaden out. This broadening will take place from “Magnificent 7” leadership to the rest of the US and also to other parts of the world. As per the asset manager, Q1 results can be a teaser. The developed markets, ex-U.S., are expected to lead returns, followed by emerging markets and then value stocks in the U.S.

Our Methodology

To list the 11 Best Buy-the-Dip Stocks to Buy Now, we used a screener to shortlist stocks that trade close to their respective 52-week lows. After getting an extended list of 25-30 stocks, we chose the ones popular among hedge funds. Finally, the stocks are ranked in ascending order of their hedge fund sentiments, as of Q4 2024.

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).

PepsiCo, Inc. (NASDAQ:PEP)

Closing Price as on April 28: $133.76

52-week Low: $131.8

Number of Hedge Fund Holders: 69

PepsiCo, Inc. (NASDAQ:PEP) is engaged in the manufacture, marketing, distribution, and sale of various beverages and convenient foods. Analyst Filippo Falorni of Citi maintained a “Buy” rating on the company’s stock, demonstrating a combination of factors that dictate its potential despite the current challenges. The analyst has provided the price target of $160.00. One of the critical reasons is PepsiCo, Inc. (NASDAQ:PEP)’s international business, which has been exhibiting healthy performance with strong growth in markets such as Europe, India, and Brazil. As per the analyst, the international strength can contribute positively to PepsiCo, Inc. (NASDAQ:PEP)’s overall topline growth despite the macroeconomic pressures affecting some regions such as China and Mexico.

Furthermore, the rating is also supported by the company’s valuation, says Falorni. Despite the challenges, PepsiCo, Inc. (NASDAQ:PEP)’s efforts to mitigate difficulties with the help of cost savings and adjustments in sourcing have been regarded as positive steps. Also, the analyst opines that the performance of critical brands in North America demonstrates recovery potential and improvement, aiding an optimistic outlook. The company remains focused on building upon the successful long-term expansion of its international business, while initiating actions focused on improving performance in North America. PepsiCo, Inc. (NASDAQ:PEP)’s multi-year productivity initiatives are expected to fund disciplined commercial investments and support profitability.

Overall, PEP ranks 1st on our list of best buy-the-dip stocks to buy now. While we acknowledge the potential of PEP as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher 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 a deeply undervalued AI stock that is more promising than PEP but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.