10 Stocks the Best Fund Managers Have Been Buying in This Volatile Market

Five months into 2026, plenty of unanswered questions exist about economic growth, inflation, and interest rates—and it’s been a volatile year for US stocks, with the artificial intelligence and large-growth stocks driving the market one day and energy and value stocks the next. Yet despite all the uncertainty and rotation, the Morningstar US Market Index was up more than 9% for the year through May 22.

Where has the “smart money” been finding investment opportunities in this volatile market?

To find out, we looked at the latest portfolios of some of the best fund managers. To isolate the top stock-pickers among current active fund managers, we screened on the following:

• Actively managed funds that land in the large-blend, large-growth, or large-value
  Morningstar Categories
  .
• Funds with at least one share class earning a
  Morningstar Medalist Rating
  of Gold, Silver, or Bronze with 100% analyst coverage.
• Funds that hold 50 stocks or fewer as of their most recently reported portfolios.

In total, 39 separate fund portfolios passed our screen. We then compared the latest portfolios of these funds with their portfolios three months before to determine which stocks these managers have been buying.

10 Stocks That the Best Fund Managers Have Been Buying in This Volatile Market

Here are some of the stocks that top managers have been investing in during the past few months:

1. Western Digital WDC
2. Taiwan Semiconductor Manufacturing TSM
3. GE Aerospace GE
4. Netflix NFLX
5. AppLovin APP
6. Micron Technology MU
7. AstraZeneca AZN
8. Marsh McLennan MRSH
9. KLA KLAC
10. Nebius Group NV NBIS

Here’s a little bit about each of the stocks the best fund managers have been buying, along with some commentary from the Morningstar analysts who follow the companies. All data is as of May 22, 2026.

Western Digital

• Number of Best Managers Buying the Stock: 2
• Morningstar Rating
  : 3 stars
• Morningstar Economic Moat Rating
  : None
• Sector
  : Technology

The best fund managers’ top stock pick during the last quarter was Western Digital. Western Digital is the top-performing name on the list so far this year, with a stunning 180% return. Morningstar thinks this technology stock is 17% overvalued.

Western Digital is a leader in hard disk drives. This market is concentrated, with only three players remaining: Western Digital, Seagate, and Toshiba. Seagate and Western Digital have jostled back and forth for top share over the last decade, while Toshiba remains a distant third. Hard disk drives are being phased out in key end markets in favor of solid-state drives, but we still see a future for HDDs in data centers. Total cost of ownership still favors HDDs over solid-state drives for large workloads where controlling costs is paramount, but immediate read access is less important. This is commonly referred to as nearline storage, which we expect will make up almost all of Western’s business over time.

We expect overall HDD industry revenue will grow at a 30%-plus average rate over the next several years, as prices rise and the amount of storage shipped increases. This is in stark contrast to the history of the industry, where pricing per exabyte typically fell. HDDs are in many ways a commodity-like product, and pricing power has historically been difficult, which has led to dramatic business cycles. However, we believe the current shift to data center-led demand and further concentration with the top two players could help structurally stabilize the industry. We believe this could lead to more predictable demand and more discipline from the HDD makers, granting Western Digital real pricing power and significant improvements in margins.

We think Western and Seagate will generally maintain technological parity over the long term. For now, though, Seagate has a slight edge, as it was more focused on heat-assisted magnetic recording technology, which is becoming the industry standard. Western’s strategy of making incremental improvements via ePMR and OptiNAND technology has generally allowed it to keep up, but Seagate is already shipping 40-terabyte hard drives based on its Mozaic 4+ platform, while Western is shipping 32 TB drives based on its ePMR technology. We expect both companies will transition to HAMR, with drives in the 36 to 44 TB range, by 2027.

Read more about Western Digital here.

Taiwan Semiconductor Manufacturing

• Number of Best Managers Buying the Stock: 3
• Morningstar Rating: 3 Stars
• Morningstar Economic Moat Rating: Wide
• Sector: Technology

Semiconductor company Taiwan Semiconductor is the second tech stock on the list. Morningstar thinks shares of this wide-moat company are 5% undervalued.

Taiwan Semiconductor Manufacturing is the world’s largest dedicated contract chip manufacturer, or foundry, with about 70% market share in 2025. It makes integrated circuits for customers based on their proprietary IC designs. TSMC has long benefited from semiconductor firms around the globe transitioning from integrated device manufacturers to fabless designers. Like all foundries, it assumes the costs and capital expenditures of running factories amid a highly cyclical market for its customers. Foundries tend to add excessive capacity during times of burgeoning demand, which can result in underutilization during downturns, which hampers profitability.

The rise of fabless semiconductor firms has supported the growth of foundries, which in turn has encouraged increased competition. However, most of these newer competitors are confined to low-end manufacturing due to prohibitive costs and engineering know-how associated with leading-edge technology. To prolong the excess returns enabled by leading-edge process technology, or nodes, TSMC initially focuses on logic products, mostly used on central processing units and mobile chips, then focuses on more cost-conscious applications. This strategy has been successful, illustrated by the fact that the firm is one of the two foundries still possessing leading-edge nodes while dozens of peers lag.

We note two long-term growth factors for TSMC. First, the consolidation of semiconductor firms is expected to create demand for integrated systems made with the most advanced nodes. Second, organic growth of AI, Internet of Things, and high-performance computing applications may last for decades. AI and HPC play a central role in quickly processing human and machine inputs to solve complex problems like autonomous driving and language processing, which accentuates the need for more energy-efficient chips. Cheaper semiconductors have made integrating sensors, controllers, and motors to improve home, office, and factory efficiency possible.

Read more about Taiwan Semiconductor here.

GE Aerospace

• Number of Best Managers Buying the Stock: 7
• Morningstar Rating: 3 Stars
• Morningstar Economic Moat Rating: Wide
• Sector: Industrials

One of six 3-star-rated stocks on the list, GE Aerospace is trading near its fair value estimate. This aerospace and defense company lands in the large-core segment of the style box.

In April 2024, GE Aerospace emerged from the former GE conglomerate as a formidable and focused global turbine engine producer, powering about three of every four commercial airline flights on Earth.

The jet engine business is divided between designing and supplying new engines, which involves significant ongoing research and development to ensure that successive generations outperform their predecessors, and servicing existing engines with replacement and refurbished parts throughout their very long service lives. When jet engines are overhauled several times during their operating life, they are almost completely rebuilt. GE Aerospace earns about three-fourths of its commercial engine revenue and nearly all of its operating profits from parts and services provided after the engine is in service, known as the aftermarket.

GE’s engine portfolio includes the workhorse CFM56, which has powered older Airbus A320 and Boeing 737 models since 1982 and is giving way to the CFM Leap on A320neo and 737 MAX planes. The CF6 entered service in 1971, powering wide-bodies from DC-10s to Boeing 747s, 767s, and the Airbus A300 family. Its successor, the GEnx, powers 747-8s and 787s. The GE90 powers most 777s flying today and will give way to the GE9X, destined for the Boeing 777X family.

GE Aerospace’s 50/50 joint venture with Safran, called CFM, makes and services the CFM56 and Leap engines for narrow-body jets and competes with Pratt & Whitney’s GTF engine, the product of a 15% to 18% partnership with MTU. To compete with Rolls-Royce on the ultra-wide-body Airbus A380, GE teamed up with Safran, MTU, and Pratt & Whitney. GE also competes with Rolls-Royce and Pratt in the smaller business jet engine market.

Our outlook for commercial aircraft entails a near doubling of the global fleet by 2042 through secular growth and replacement of older, less efficient aircraft. GE Aerospace stands to participate heavily in this upswing through its high market penetration in both the narrow- and wide-body categories. As newer planes like the 737 MAX and 777X are delayed in entering service, airlines using their older aircraft and engines longer than planned benefit the aftermarket business.

Read more about GE Aerospace here.

Netflix

• Number of Best Managers Buying the Stock: 13
• Morningstar Rating: 3 Stars
• Morningstar Economic Moat Rating: Narrow
• Sector: Communication Services

Next on the list of stocks that the top managers have been buying is Netflix, one of three narrow-moat stocks on the list. Morningstar thinks Netflix stock is 11% overvalued.

Netflix is the leading subscription streaming television platform globally and enjoys the economic benefits of this scale. We expect this position to persist. Netflix did not need Warner Bros., and at the price to which it agreed, we thought it would be value-destructive.

Netflix’s superiority relative to peers is due to several factors, in our view. It has avoided the temptation to bid for a regular slate of major live sports programming, which has been wise considering our view that it hasn’t needed help attracting audiences and would’ve had to overpay to attract major sports. It has also chosen to grow organically from the ground up, building its business with no head start in content ownership or a foothold in the traditional media business. These decisions now give Netflix the advantage of not having to manage a declining legacy business, and it isn’t burdened by expensive sports contracts or a subscriber base dependent on retaining sports rights.

Netflix’s streaming dominance is under greater threat than when it was establishing its position and charging relatively low prices. With many subscription streaming platforms offering popular content, we don’t believe consumers will have the financial willingness or ability to subscribe to all of them, meaning Netflix will need to continue offering a robust lineup of attractive programming to maintain its position. This will require significant investment and careful consideration of pricing changes. Despite our view that Netflix will remain at the top, it will have to compete more than it has historically.

We still expect an impressive growth trajectory. Assuming no major misfires that lead to a lack of attractive programming over an extended period, we expect Netflix’s subscriber base to be sticky, and we think the cash it generates will allow it to produce many new series and movies each year, giving ample opportunities for customers to find something they like. We also see further opportunities for penetration in international markets.

Read more about Netflix here.

AppLovin

• Number of Best Managers Buying the Stock: 5
• Morningstar Rating: 3 Stars
• Morningstar Economic Moat Rating: Narrow
• Sector: Communication Services

Advertising agency AppLovin is one of a trio of communication services stocks on the list. Morningstar thinks shares of this narrow-moat company are fairly valued.

AppLovin is a vertically integrated advertising tech company that acts as a demand-side platform for advertisers, a supply-side platform for publishers, and an exchange that facilitates transactions between the two. The firm initially focused on mobile game advertising and monetization, but soon identified a broader need for enhanced user acquisition and optimization tools across content types. AppLovin provides advertisers access to 1.6 billion daily active users. Following the divestment of its gaming studios in early 2025, it is now a pure-play ad tech platform. The company is growing rapidly and has a strong margin profile, earning it the highest Rule-of-40 score in our software universe.

AppLovin’s DSP, AppDiscovery, generates approximately 80% of the company’s revenue and earns a performance fee when ads drive ‘conversion’ events, such as in-app purchases or downloads, unlike The Trade Desk. TTD charges a 20% take rate on all ad spending placed on its platform. AppLovin’s revenue ties directly to measurable outcomes, with attribution validated by independent third parties like Triple Whale. Remaining revenue comes from its SSP, Max, which charges a 5% tax to publishers for monetizing ad inventory and mobile gaming studios.

In 2023, AppLovin rolled out Axon 2, which facilitates access to ad inventory beyond gaming. Axon 2, which has driven a sharp acceleration in revenue growth, operates as a black-box optimizer, like Google Performance Max and Meta Advantage+, but unlike TTD’s Koa, which allows advertisers to have the final say in decision-making. Axon 2 is the engine for future growth, channel expansion, and a more diverse set of advertiser profiles beyond gaming. We are intrigued by AppLovin’s intention to automate ad production with new artificial intelligence tools that can increase conversions and drive revenue growth. Early pilot programs targeting e-commerce advertisers and non-gaming inventory have been well received, but scaling beyond initial pilots remains the company’s largest unknown.

AppLovin’s long-term success, for better or for worse, is married to Axon 2’s performance.

Read more about AppLovin here.

Micron Technology

• Number of Best Managers Buying the Stock: 2
• Morningstar Rating: 1 Star
• Morningstar Economic Moat Rating: None
• Sector: Technology

One of two 1-star names on the list, Micron Technology is trading 65% above its $455 fair value estimate. This large growth stock is up a remarkable 163% this year.

We see Micron Technology as a strong supplier of memory chips, but we don’t believe the firm holds an economic moat. Micron benefits from large scale, being the fifth-largest chipmaker in the world, but we don’t see enough scale to generate consistent economic profits. Micron holds a third-place market share in dynamic random access memory, or DRAM, chips and a fifth-place market share in not-and, or NAND, flash chips. We view both the DRAM and NAND markets as highly cyclical, and we expect Micron to thrive in periods of strong demand and pricing but to be vulnerable to downcycles that compress shipments, prices, and profits.

DRAM and NAND chips are vital components to data centers, consumer devices, cars, and industrial equipment. Nevertheless, we see these chips as commoditylike and suppliers like Micron producing mostly fungible chips. Thus, Micron and its peers are prone to market supply-and-demand dynamics. Periods of strong industry demand can be followed by periods of oversupply that crater pricing and firm profitability, as seen in Micron’s fiscal 2023. As a vertically integrated chipmaker, Micron has a significant fixed-cost base, so periods of lower volume have a major impact on profitability.

In the medium term, we see AI driving a strong and enduring upcycle for Micron. Micron’s high-bandwidth memory, or HBM, chips supply into AI processors from the likes of Nvidia. We credit AI investments for Micron’s strong growth in fiscal 2025, and they are a significant driver of our five-year forecast. We believe HBM will continue to rise as a share of Micron’s total shipments and revenue, supporting growth and margins. We also like Micron’s shareholder distributions and view its balance sheet as good for a cyclical memory chipmaker.

Finally, we caution investors about the risk from China. The Chinese government effectively cut off Micron’s sales into Chinese data centers in 2023, which will have a material impact on sales and growth. Micron earns non-data-center revenue out of China, but we expect this to remain unrestricted, as these chips are for consumer and lagging-edge markets that are less critical to national security.

Read more about Micron Technology here.

AstraZeneca

• Number of Best Managers Buying the Stock: 3
• Morningstar Rating: 3 Stars
• Morningstar Economic Moat Rating: Wide
• Sector: Healthcare

Drug manufacturer AstraZeneca is the only healthcare stock on our list of stocks that the best managers have been buying. Morningstar thinks shares of this wide-moat stock are fairly valued.

AstraZeneca has built its leading presence in the pharma and biotech industry on patent-protected drugs and a developing pipeline that support a wide moat. The strong replenishment of new drugs sets up solid long-term growth.

Astra’s pipeline is emerging as one of the strongest in the drug group, and we think the company is developing several key products that hold blockbuster potential. In particular, the company’s launched cancer drugs Tagrisso, Imfinzi, Lynparza, and Calquence are well-positioned based on leading efficacy in hard-to-treat cancers. These drugs also carry strong pricing power to support higher margin sales. Astra is well-positioned in the respiratory and diabetes spaces, too, although these areas tend to have poor pricing power relative to cancer drugs.

In addition to internal development, Astra has aggressively pursued acquisitions, with largely positive recent results. The stake in Acerta looks to be developing well, with blood cancer drug Calquence taking share from older drugs. The joint development with Daiichi Sankyo on cancer drug Enhertu looks well-positioned for growth. Also, the 2021 acquisition of Alexion looks like a solid strategic move done at a reasonable price, as it brought in an excellent rare-drug portfolio with strong pricing power.

As Astra’s next generation of drugs launches, we expect operating margins to improve based on the strong pricing power of the new drugs and the operating leverage the firm should attain as the new drugs reach critical mass. Also, as the new drugs launch, Astra is reducing the asset divestiture strategy it employed to help bridge the massive patent losses facing the firm over the past few years until the newer drugs were ready. While the asset sales helped prop up earnings and support the dividend during a challenging time, the strategy is not maintainable. As new drugs gain traction, Astra will likely continue to reduce asset sales.

Read more about AstraZeneca here.

Marsh McLennan

• Number of Best Managers Buying the Stock: 3
• Morningstar Rating: 4 Stars
• Morningstar Economic Moat Rating: Narrow
• Sector: Financial Services

Marsh McLennan is the only 4-star stock on the list, trading 17% below its fair value estimate. This narrow-moat insurance broker’s stock lands in the mid-core segment of the style box.

We view Marsh McLennan as something of a tollbooth business. Its leading position in the brokerage industry would be difficult to displace, and its sticky customer relationships allow it to benefit from a relatively stable level of insurance transactions, although it does have exposure to the insurance pricing cycle. We think Marsh McLennan’s long-term future will largely resemble its past, with moderate growth and attractive profitability, although the coronavirus and a hard insurance market have created some recent ups and downs.

Because Marsh McLennan generally takes a percentage of premiums as commission, it is exposed to the direction of the insurance pricing cycle. In 2019, pricing momentum picked up, and this positive trend accelerated in 2020 as the coronavirus appeared to have acted as an additional spur to pricing. Over the past several years, the industry saw its strongest price increases in almost 20 years. This has boosted growth recently and helped offset the negative impacts the coronavirus had on the more discretionary areas of the business. Discretionary services bounced back as the pandemic receded, and Marsh McLennan has also benefited from higher interest rates, which increase its fiduciary income. As a result, the company has seen unusually strong growth over the past couple of years. However, results now appear to be normalizing as these tailwinds fade. Going forward, we expect insurance pricing to face headwinds.

Over the long run, Marsh McLennan remains tied to a mature insurance industry, and some of its consulting operations are centered on low-growth areas. As such, we think it is inevitable for growth to moderate over time. In the 10 years prior to the pandemic, organic growth was in the 3% to 5% range annually, and we think this figure is more indicative of potential long-term growth. If insurance pricing becomes a material headwind, the company will likely be toward the bottom of this range.

Read more about Marsh McLennan Companies here.

KLA

• Number of Best Managers Buying the Stock: 6
• Morningstar Rating: 2 Stars
• Morningstar Economic Moat Rating: Wide
• Sector: Technology

Semiconductor equipment and materials firm KLA is one of eight large-growth stocks on the list. Morningstar thinks shares are 26% overvalued.

KLA is one of the largest providers in the world of wafer fabrication equipment for semiconductors, specializing in process control, where we expect its unmatched breadth and depth to defend and increase its market share. We believe trends toward higher complexity in chips will drive increasing demand and strong pricing for KLA’s equipment, including artificial intelligence and new technologies like high-bandwidth memory. We particularly like that KLA boasts the highest profit margins out of any WFE firm under our coverage.

We assign a wide economic moat rating to KLA, resulting from strong design expertise and steep customer switching costs. KLA holds a majority share of the process control segment of the WFE market, wherein machines inspect semiconductor wafers during research and development and manufacturing for defects and verify precise measurements. KLA more than quadruples the sales of its nearest competitor, Applied Materials, in this segment. We believe this share is built on KLA’s research and development budget of well over $1 billion annually, which has helped it develop a comprehensive process control portfolio that spans the cost, performance, and product spectrum for its customers. Once in a customer, the complexity of KLA’s equipment and its embedded services makes it sticky. In our view, this proficiency also gives it unmatched pricing power, with industry-leading gross margins in the low 60% range and strong cash flow.

We expect cyclicality in the semiconductor industry long-term, but see durable growth in the medium term. The firm’s sales are a function of global chip volumes and overall chip complexity, and while we see cyclicality in the former, we see durable growth for the latter. More-complex chips that use gate-all-around transistors, 3D structures, and require advanced packaging should fuel growth for KLA, in our view. We monitor for geopolitical risk affecting KLA via export restrictions applied between the US and China, but see much of this risk already realized, with KLA’s remaining China sales at low risk. Finally, we like KLA’s significant shareholder returns funded with its heady cash flow.

Read more about KLA here.

Nebius Group NV

• Number of Best Managers Buying the Stock: 2
• Morningstar Rating: 1 Star
• Morningstar Economic Moat Rating: None
• Sector: Communication Services

Nebius Group rounds out the list of stocks that the best fund managers have been buying. Morningstar thinks shares of this stock are 79% overvalued.

Once the supply/demand situation of AI normalizes in the coming years, neocloud companies that simply purchase and rent GPUs without any real differentiation will have important struggles, as their current business model looks commoditized, and only viable due to the current scarcity of AI resources. Necloud firms are a new generation of AI-focused cloud infrastructure providers.

Rather than remaining a “bare-metal” provider that just rents computing capacity and leaves most technical issues to the client, Nebius Group is trying to migrate beyond basic hardware provision by building additional layers of software and managed services on top of the hardware. Long-term, Nebius will try to move up the chain, closer to where hyperscalers operate. This is a herculean task, but we believe it’s the only strategy with chances of long-term success. Over time, we expect Nebius to start monetizing additional software and services that reduce friction for enterprise clients. However, customer acquisition will be challenging given that Nebius lacks the extensive distribution channels some of its peers have with products like Windows, Office, or search engines.

Nebius is opting for a full-stack approach, involved in every stage from data center design to software orchestration. For instance, Nebius has shown a preference for designing its own servers rather than purchasing from off-the-shelf suppliers to optimize cooling efficiency, density, and power utilization—delivering better performance per watt and lowering the total cost of ownership for customers. Given how fast the AI supply chain is advancing on all fronts, having greater control seems the right strategic decision.

Access to cutting-edge hardware is key for Nebius. Each year, Nebius will purchase billions of dollars of the latest Nvidia GPUs, add them to its fleet to power its clusters, and rent them out to customers. The newest systems will be used for the most demanding workloads, such as large-scale training, while older GPUs will be reallocated to inference or less demanding training tasks.

Read more about Nebius Group here.

How Do We Determine Which Stocks the Best Managers Are Buying?

To determine which stocks top managers are investing in, we compared the latest portfolios of these funds with their portfolios three months before. We then calculated a “buy score” for each stock, which is a weighted average that allows us to make apples-to-apples comparisons of the most purchased stocks. One or two managers making large purchases of a stock could lead to the same buy score as many managers purchasing small amounts of a stock.