With all eyes on the United States in the early part of 2025, Wall Street has taken center stage. Throughout last year, the market had thrived, with the tech sector surging amid increased AI demand. Yet, as so much is still at stake, here are 3 stocks to buy if the US economy stalls and 3 to buy if it doesn’t.
There has been no shortage of volatility present in the stock market in the first month of the year. Companies like Nvidia (NVDA) have shockingly turned downward, along with late 2024 winner Tesla (TSLA). As these trends play themselves out, here is a look at what you have to watch out for.
Also Read: Amazon, Apple, & Nvidia Lead Dow Jones Stocks to Watch in 2025
3 Stocks to Buy If the US Economy Falters
There is no shortage of interesting sectors for modern stock investors. With the Magnificent 7 continuing to thrive, their success has set the tone for where your dollar should go on Wall Street. But should that remain the case if the economy falters?
Verizon (VZ)
If the US economy can continue its bounce back this year, Verizon (VZ) has emerged as one of the highest potential stocks due to its strength in the event of a disappointing year economically.
There is the expectation that consumers will pay their cell phone bills before many others. That reality has strengthened Verizon’s attractiveness if the US economy doesn’t go as planned in the next 12 months.
Kraft Heinz (KHC)
In the event of a stalling US economy, there is an emphasis on companies that can be defensive in an economic sense. Kraft Heinz (KHC) certainly falls into that category. Morningstar has recently upgraded the stock’s rating last year and is at a 45% discount currently.
The company is operating within the consumer packaged food goods industry and has entered 2025 with a revamped strategy. Although it did drop in 2024, there are high hopes for the coming year. Even if things do stall out economically, Morningstar calls Kraft Heinz a “normalization play” for investors.
FMC (FMC)
Finally, a smaller stock that looks like a good buy in the event of a US economy that falters is FMC. The company is in the material sector, which is why an investment in it has been called a “cyclical play.” However, it operates as a defensive investment considering the fact that it has very little risk tied to economic performance.
The stock is 5-star rated by Morningstar and trades at a 50% discount to fair value. The company has fallen 65% from 2022 highs for a myriad of factors but maintains strong long-term forecasts. Indeed, many experts view its current price as a key entry point.
3 Stocks to Buy if it Falters
Advanced Micro Devices (AMD)
The first stock that you should consider is Advanced Micro Devices (AMD). Indeed, the company is widely known for the sale of semiconductors used in the computing sector. Therefore, they have become incredibly economically sensitive.
There are many who expect AMD to eventually be the second-largest semiconductor stock to Nvidia. However, it is still the lesser of the two and could be subject to a stark downturn if the US economy faces a regression next year.
Devon Energy (DNV)
Another stock that could prove to be economically sensitive is Devon Energy. With a 29% discount currently, the stock has a medium uncertainty value according to Morningstar analysts, but still looks like a decent investment to many analysts.
However, experts note that it is a steady low-cost provider with lower assets relative to the US shale cost curve. With the entire sector potentially in jeopardy in the event of an economic downturn, it would be worth avoiding Devon Energy.
Sealed Air Corporation (SEE)
The final stock to avoid if the US economy stalls in its recovery is Sealed Air (SEE). The 4-star-rated stock is selling at a 38% discount to its current fair value. Moreover, it has a high uncertainty rating that definitely comes into play for this coming year.
Over the past year and a half, the stock has been unmoving. Many Wall Street experts believe the stock has struggled to properly recover from the pandemic. However, unlike other companies, the resin packaging manufacture is only projecting a 2.4% compound growth rate. That fact makes it a key stock to avoid if things go bad in 2024.
