12 Best Debt-Free Stocks to Buy Now

Group 1: Debt Financing Trends - The increasing reliance on debt for financing multi-billion-dollar artificial intelligence and AI-infrastructure investments has raised concerns, with Oracle being a notable example, potentially raising $20-$30 billion in debt annually over the next three years for its AI initiatives [1][2] - Many large companies are accumulating debt to enhance their AI capabilities, with $37 billion in U.S. investment-grade bonds issued on the first Monday of 2026, and an estimated $215 billion of high-grade debt expected to be sold in January alone [3] Group 2: Corporate Debt Risks - Rising leverage poses risks, as increased debt levels may lead to higher corporate defaults, while companies with minimal or no debt generally have better financial flexibility and less operational volatility during downturns [4] - An optimal balance between leveraging debt for growth and maintaining financial stability is essential for companies to capitalize on investment opportunities [4] Group 3: Debt-Free Stock Selection - The article defines "debt-free" as companies with net cash positions where enterprise value is lower than market capitalization, indicating that cash and liquid investments exceed total debt [5] - A methodology was established to identify the best debt-free stocks, focusing on U.S. stocks with a market capitalization of at least $2 billion and an enterprise value-to-market cap ratio below 1.0, leading to a shortlist of stocks with a potential upside of at least 15% and high hedge fund ownership [7][8] Group 4: Company-Specific Insights - Coinbase Global Inc. (NASDAQ:COIN) is highlighted as a top debt-free stock with a potential upside of 48.4%, receiving an upgrade from BofA, which noted that the recent stock decline was unrelated to fundamentals [10][11] - Insmed Inc. (NASDAQ:INSM) reported strong preliminary 2025 results with total revenue of approximately $606 million, a 67% year-over-year increase, driven by its leading therapies [15][16] - Palo Alto Networks Inc. (NASDAQ:PANW) is recognized as a debt-free stock with a potential upside of 22.5%, although UBS has maintained a cautious stance due to softness in platformization deals and potential deceleration in service revenue growth [20][22]