Thinking independently in the stock market is the premise for a successful career. Still, oftentimes ideas come to a dry up, and no opportunities seem to be lying around for the taking, and this is when investors can take advantage of someone else’s homework in the financial markets.
Not to outright copy someone else’s homework, but to attempt to reverse engineer the thought process and the views behind certain picks for a potentially profitable run in portfolios.
Today’s homework comes from those at Morningstar, a team of analysts and investors who have landed on some value picks for the year 2025, rooted in fundamentals that account for today’s volatile and uncertain environment in the S&P 500 brought on by the recent rollout of trade tariffs from President Trump.
Despite all of this uncertainty, these picks have enough reason to make them winners for investors who can successfully break apart the reasoning behind these names for themselves.
The top picks laid out by Morningstar when it comes to value stocks are stocks like Adobe Inc. (NASDAQ: ADBE), Alphabet Inc. (NASDAQ: GOOGL), and even Advanced Micro Devices Inc. (NASDAQ: AMD). All of these are focused on the technology sector of the United States. Still, there are other commonalities that they share in the sense that they offer fantastic risk-to-reward ratios for investors to consider moving forward, as well as strong fundamentals in the global economy.
Adobe’s Business Model Makes It a Safe Pick
[content-module:CompanyOverview|NASDAQ: ADBE]Not all software companies are equal. Some are cyclical and see their financials hover between upper and lower ranges, along with the business and spending cycle in the economy. Others don’t really care what most consumers are thinking since they rely on recurring sources of revenue like subscriptions.
Adobe fits in the latter category, as almost all (90% or so) of its revenue comes from subscription services in its software offerings. Apart from this fundamental business model setup, Adobe’s products are also at the heart of the digitalization of the global economy today.
From Photoshop to Premiere Pro, the online economy and businesses looking to build their social media and online presence will continue to look to Adobe for the solutions they need.
Adobe stock has traded down to only 71% of its 52-week high, officially in a bear market by Wall Street's definition. These Morningstar analysts aren’t alone in their views for Adobe though, as allocators from Amundi decided to boost their holdings in Adobe stock by as much as 24.7% as of mid May 2025, netting their position at a high of $1.8 billion today.
Google’s Shift In Artificial Intelligence Is Undervalued
[content-module:CompanyOverview|NASDAQ: GOOGL]As shares of Alphabet, Google’s parent company, have fallen to 81% of their 52-week highs, the worst might have already been priced into this tech giant. Despite the tariff volatility that has hit the technology sector, Alphabet has the ingredients to bring investors out of this storm with some green in their portfolios.
By pivoting from its main business as a search engine and online advertising, Alphabet's new pursuit of quantum computing and autonomous driving through Waymo has given investors something new to think about.
In states like California, Waymo is already making major breakthroughs in transportation, essentially giving the company a head start and an advantage over other competitors in the space. More than that, large language models (LLMs) and the artificial intelligence platforms that everyone knows about indirectly rely on Alphabet as a major source of information.
This is why Morningstar sees it as a value play and why Ivan Feinseth, an analyst at Tigress Financial, considers the stock a Strong Buy with a valuation target of up to $240. This view would dare Alphabet to make a run higher of as much as 42% from today’s prices, and it makes all the sense today.
The Quiet Upside In Semiconductors
[content-module:CompanyOverview|NASDAQ: AMD]Advanced Micro Devices has fallen behind other big names in terms of popularity in the semiconductor and chipmaking industry. However, its current risk-to-reward setup is one of the best in the space today. At only 63% of its 52-week high, this stock does not have much downside to price, and all of the upside is still intact for investors to consider.
This might be one of the reasons short sellers decided to start scaling out of the stock, as seen in the 7.9% decline in short interest over the past month alone, a clear sign of bearish capitulation as the traders realize the juice isn’t worth the squeeze today.
It seems that Amundi isn’t just bullish on Adobe. They also boosted their stakes in Advanced Micro Devices by as much as 8% as of mid-May 2025, bringing their exposure to a high of $1.7 billion in another wave of discounted technology buying to show confidence in where these stocks could go from here.
Where Should You Invest $1,000 Right Now?
Before you make your next trade, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis.
Our team has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and none of the big name stocks were on the list.
They believe these five stocks are the five best companies for investors to buy now...
