Is FedEx Corporation (FDX) the Worst Blue Chip Stock to Buy?

We recently published a list of 10 Worst Blue Chip Stocks to Buy. In this article, we are going to take a look at where FedEx Corporation (NYSE:FDX) stands against other worst blue chip stocks to buy.

As per Niamh Brodie-Machura, Co-Chief Investment Officer at Fidelity International, the effect of tariffs is expected to shift lower as and when the deals are made, supply chains adapt, and there is some adjustment in consumption patterns with lower tariffed goods witnessing relatively increased demand. However, there continues to be a period of increased volatility, and investors who plan to add risk should be careful. The environment is more of an opportunity to better position portfolios for resilience amidst uncertainty.

Market Rotation and Opportunity Areas

Contrary to expectations, BlackRock, in its release dated April 23, highlighted that international equities outperformed the US equities by 11% in 2025. The US growth stocks fell by 10%, and US value stocks increased by 2%. This transition demonstrates a significant market rotation throughout geography and style as value stocks continue to gain favor over growth stocks. Within the US market, value equities, mainly in defensive sectors such as healthcare, have been performing well, says the asset manager.

BlackRock also added that the narrowing of the earnings gap and the industry’s attractive characteristics, like innovation and the growth of aging populations, have been fueling the performance. Notably, active management strategies are advantageous when it comes to navigating the fluctuating markets.

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

What Should Investors Do?

BlackRock believes that the US large-cap value equities are the only major US index having positive returns YTD through March 31. Among the value equities, its investors are spotting opportunities in defensive sectors. In the current fast-moving political environment, primarily new trade policies, value equities can possess an additional tailwind. This stems from their ability to fetch a greater share of revenue from the US.

Elsewhere, if tariff discussions continue longer than expected or the average tariff rates differ from the current expectations, it is important to make portfolio changes accordingly, says Fiduciary Trust (a privately held wealth management firm). Notably, the capex spending on AI is expected to remain strong, and AI will likely fuel long-term productivity. The firm also opines that changes will be made to bank capital ratio rules, enabling them to enhance lending and/or increase stock buybacks. Both of these measures can improve earnings.

Our Methodology

To list the 10 Worst Blue Chip Stocks to Buy, we scanned through the holdings of SPDR® S&P 500® ETF Trust and chose the ones that declined between 15%-30% on a YTD basis. After getting an extended list of stocks, we selected the ones popular among hedge funds. Finally, the stocks were ranked in ascending order of their hedge fund holdings, 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).

FedEx Corporation (NYSE:FDX)

Number of Hedge Fund Holders: 66

% Decline on a YTD Basis: ~20.5%

FedEx Corporation (NYSE:FDX) offers transportation, e-commerce, and business services in the US and internationally. Analyst Ken Hoexter of Bank of America Securities reiterated a “Buy” rating on the company’s stock with a price objective of $272.00. The analyst’s rating is backed by a combination of factors demonstrating FedEx Corporation (NYSE:FDX)’s efforts in cost savings and operational efficiencies. The analyst highlighted that despite worries related to the macroeconomic uncertainties and inflationary pressures, it made strong progress in its DRIVE cost savings initiatives, achieving $600 million in savings in Q3 2025.

Furthermore, FedEx Corporation (NYSE:FDX) continues to advance its Network 2.0 transformation and Tricolor initiatives, which can further improve operational efficiencies. Despite the weak industrial economy impacting the company’s business-to-business volumes, its strategic initiatives are regarded as a favourable catalyst for future growth, added Hoexter. FedEx Corporation (NYSE:FDX) continues to make healthy progress on decreasing its cost to serve and improving operational performance, mainly at Federal Express, aiding operating income and earnings growth.

Longleaf Partners, managed by Southeastern Asset Management, released its Q1 2025 investor letter. Here is what the fund said:

“FedEx Corporation (NYSE:FDX) – Global logistics company FedEx was a detractor for the quarter. The company faced macro headwinds, including tariff threats and ongoing demand weakness in the US. The company is growing market share and margins in its formerly challenged European business, and this was a driver for the Express business to report low-single-digit topline growth that turned into double-digit cash flow growth. The Freight business saw a decline like its peers who are also wrestling with weak industrial conditions. FedEx remains on track to separate into two entities: Express and Freight. This split should provide both companies with greater financial flexibility and accountability, allowing them to be run more efficiently. The market has consistently undervalued FedEx’s Freight operations, and a large discount to UPS is no longer warranted for the Express business. Tariff headwinds will be challenging to navigate, but we are glad the company is more on offense now than it has been in previous downturns.”

Overall, FDX ranks 7th on our list of worst blue chip stocks to buy. While we acknowledge the potential of FDX 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 FDX 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.