In the third quarter of 2025, uncertainties about tariffs, economic growth, inflation, and interest rates have caused volatility in the US stock market. Top fund managers have been seeking investment opportunities, with 28 fund portfolios passing screens for top stock-pickers. Some undervalued stocks have been identified by Morningstar among those being purchased.

Stocks that top managers have been investing in this year include American International Group, Interactive Brokers Group, Taiwan Semiconductor Manufacturing, GE Aerospace, Altria Group, ExxonMobil, The Trade Desk, CME Group, Becton Dickinson, and O’Reilly Automotive. Each stock pick has been analyzed by Morningstar analysts for valuation and performance.

American International Group, chosen by 4 top managers, has shown strong performance in the second quarter, with a significant improvement in underwriting performance and net written premiums. Morningstar maintains a $77 fair value estimate for AIG, considering it to be fairly valued.

Interactive Brokers Group, picked by 1 top manager, reported strong trading volumes in the second quarter, with a 74.6% operating margin. Morningstar raised its fair value estimate for IBKR to $46 from $42, reflecting increased confidence in its forecast.

Taiwan Semiconductor Manufacturing, chosen by 5 top managers, raised its full-year revenue growth guidance and reported strong demand from AI and higher utilization in mature process nodes. Morningstar raised its fair value estimate for TSMC to $306 from $262, considering it to be undervalued.

GE Aerospace, selected by 3 top managers, reported revenue growth and margin improvements in its commercial engines segment. Management raised revenue and profit expectations considerably, with a target operating profit of $11.5 billion in 2028. Morningstar raised its fair value estimate for GE to $266 from $238.

Altria Group, picked by 1 top manager, reported strong earnings growth in the second quarter, driven by its Marlboro brand dominance in the US market. Morningstar expects to raise its fair value estimate for Altria due to higher margins and increased EPS guidance.

ExxonMobil, selected by 2 top managers, reported earnings that exceeded expectations, with volume growth and cost reduction mitigating lower oil prices. Morningstar maintains a fair value estimate of $135 for Exxon, considering it to be undervalued.

The Trade Desk, chosen by 2 top managers, reported strong growth in connected TV and new programmatic operating systems. Morningstar views TTD as undervalued at a 30% discount to its $82 fair value estimate.

CME Group, picked by 2 top managers, reported strong revenue growth driven by high trading volume. Morningstar maintains a fair value estimate of $245 for CME, viewing the shares as modestly overvalued.

Becton Dickinson, selected by 3 top managers, reported revenue growth and margin improvements, with growth in some segments and headwinds in others. Morningstar maintains a $270 fair value estimate for BDX, considering it to be undervalued.

O’Reilly Automotive, chosen by 2 top managers, reported accelerated top-line growth and store openings. Morningstar maintains a fair value estimate of $62 for ORLY, viewing the shares as overvalued.

The methodology for determining which stocks the best managers are buying involves comparing fund portfolios, calculating a “buy score” for each stock, and analyzing the most-purchased stocks. The content was developed by Morningstar’s senior editor and lead developer. The authors do not own shares in any securities mentioned in the article.

Read more at Morningstar: 10 Stocks the Best US Fund Managers Have Been Buying in 2025