Is Apple Inc. (AAPL) the Best Monopoly Stock to Buy Now?

We recently compiled a list of the 10 Best Monopoly Stocks to Buy. In this article, we are going to take a look at where Apple Inc. (NASDAQ:AAPL) stands against the other monopoly stocks.

Morgan Stanley believes the bull market might not be finished, and the S&P 500 might close the year with single-digit gains. There can be further declines in the S&P 500, which can result in attractive entry points. Historically, when stocks decline 15%, the average returns after a year tend to be attractive, says Morgan Stanley. Furthermore, the returns are even more attractive when a 20% drop becomes an entry point. That being said, a major risk to the broader equity market can be a resurgence of inflation and the US Fed increasing rates, along with tariff impacts.

S&P 500 Can Deliver Single-Digit Returns

Morgan Stanley Investment Management’s Applied Equity Team believes that 2025 can be a “pause” year for the broader S&P 500, posting single-digit gains. This remains consistent with the firm’s outlook, which was shared at the beginning of the year, suggesting that 3^rd year of a bull market tends to deliver mediocre—but positive returns, together with increased volatility. Analyzing 12 times since 1950 that the broader S&P 500 declined a minimum of 20% from its peak, there was a recession in 9 of such instances, says the investment firm. In the current instance, the combination of the market decline or the recession talk appeared to be sufficient to spur a policy response.

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

Pockets of Opportunities

Morgan Stanley believes that stocks can retest lows seen in early April. The base case outlook is for gains in 2025, and the market is open 251 days a year. If stocks decline 20% or more, the investment firm opines that investors will do well to consider increasing the equity allocations more aggressively. In the 12 times since 1950 in which the S&P 500 fell 20%, the average subsequent 1-year return with that fall as an entry point is 19%. Fidelity International believes that, in this market, which is characterised by increased uncertainty, a focus on dividends as a component of total return can offer support.

Furthermore, the firm believes that it is critical to combine an emphasis on high-quality businesses with valuation discipline in a bid to avoid overpaying for companies and have a better chance of generating strong long-term returns. In difficult market environments, earnings resilience remains critical. This doesn’t mean a top-down allocation to defensive industries, but selecting companies possessing resilient business models throughout a broad range of sectors with the help of detailed bottom-up analysis. Owning resilient businesses, diversified across industries, leads to increased earnings persistence as compared to the broader market indices, says Fidelity International.

Our Methodology

To list the 10 Best Monopoly Stocks to Buy, we scanned through monopoly ETFs and several online rankings. After getting an extensive list, we chose the ones that were the most popular among hedge funds. Finally, the stocks were arranged in ascending order of their hedge fund sentiment, 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).

Apple Inc. (NASDAQ:AAPL)

Number of Hedge Fund Holders: 166

Apple Inc. (NASDAQ:AAPL)’s dominant market position in the smartphone market arises from its control over the ecosystem, restrictions on competition, and higher switching costs. Its market standing is expected to continue to be aided by several factors, including innovative products, seamless ecosystem, brand loyalty, and strong distribution network. Analyst Brian White from Monness maintained a “Buy” rating on the company’s stock, providing a price objective of $245.00. This rating is backed by a combination of factors such as Apple Inc. (NASDAQ:AAPL)’s recent financial performance and strategic initiatives. The company’s March quarter business performance fueled EPS growth of 8% and $24 billion in operating cash flow.

The analyst highlighted that Apple Inc. (NASDAQ:AAPL) has been actively working to optimize its supply chain by shifting production outside of China. This is a strategic move amidst the trade tensions. Despite uncertainties associated with geopolitical risks and regulatory headwinds, Apple Inc. (NASDAQ:AAPL)’s innovation in products and services, together with its healthy financial position, supports the analyst’s rating. As of March 29, 2025, the company’s cash and cash equivalents came in at $28.1 billion, and the company has also authorized an additional program to repurchase up to $100 billion of its common stock.

Columbia Threadneedle Investments, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:

“The fund maintained a position in Apple Inc. (NASDAQ:AAPL) throughout the quarter through the release of the company’s new iPhone 16 in September. Company leaders were excited about the release of the new model, as this is the first model that will feature enhanced AI capabilities through the Apple Intelligence features. Sales for the first few weeks in October and November trailed behind year over year sales from the iPhone 15, as availability of Apple Intelligence was not compatible with all iPhone models. Apple announced a partnership with OpenAI that has allowed the integration of ChatGPT into the Apple ecosystem, separate from the core Apple Intelligence features. This partnership highlights continued progress from Apple to introduce AI capabilities into its products and we expect the iPhone 17 to have even more expansive AI capabilities, increasing potential demand for the new model that is on track to be released in 2025.”

Overall AAPL ranks 3rd on our list of the monopoly stocks to buy. While we acknowledge the potential of AAPL 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 AAPL 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.