Hargreaves Lansdown’s three stocks for the long term

U.S. stocks (SP500), (COMP:IND), (DJI) have rebounded strongly after a challenging start, as investors have now shifted their focus from tariff concerns to potential earlier-than-expected rate cuts and easing tensions in the Middle East, said Derren Nathan, head of equity research at Hargreaves Lansdown.

While the “Magnificent Seven” tech giants (GOOGL), (AMZN), (AAPL), (META), (MSFT), (NVDA), (TSLA) continue to dominate headlines, “there’s plenty of quality on the U.S. exchanges,” he said, and pointed out three stocks for the long-term:

Intuitive Surgical (NASDAQ:ISRG) stands out as a promising long-term investment with its revolutionary robot-assisted surgical platform delivering “huge benefits to patients, surgeons and healthcare providers,” Nathan said.

The company has achieved an average revenue growth of 14.6% over the past decade, with only a single down year in 2020 due to Covid-19’s impact on health systems. Also, while the company trades on a premium multiple, successful product rollouts could potentially drive “significant upside to market forecasts,” he said.

Oracle (NYSE:ORCL) has emerged as “a formidable force in cloud computing” alongside its established leadership in data storage and business software, Nathan added. Its rising prominence was recently underscored by a substantial $30B deal with OpenAI, further enhancing its already substantial revenue backlog of $138B.

Oracle’s (NYSE:ORCL) competitive advantage lies in how “smoothly it connects its powerful data storage with flexible cloud services,” allowing it to compete effectively against tech giants like Amazon (AMZN), Google (GOOGL), and Microsoft (MSFT).

Finally, Caterpillar (NYSE:CAT), with its nearly century-long history of manufacturing “mission-critical heavy machinery,” presents another compelling investment opportunity despite recent challenges from “weak construction activity,” Nathan said.

The company is well-positioned to benefit from “ambitious infrastructure plans in the U.S.” and increasing “demand for minerals critical to the energy transition,” which should boost its mining equipment sales. Furthermore, “the AI boom not only presents an opportunity to benefit from data center construction,” but also drives demand for Caterpillar’s power generation products, Nathan said.

Lastly, while Caterpillar’s (NYSE:CAT) share price “has recovered strongly of late,” potential investors might consider it “one to buy on the dips” given possible “short-term challenges ahead.” This tactical approach reflects the broader market sentiment that despite current volatility, companies with strong fundamentals and alignment with major technological and infrastructure trends remain attractive for long-term investment strategies.