In this article, we will take a look at the 10 Best Breakout Stocks to Invest In.
The US stock market is running high, hitting record highs, bolstered in part by continued optimism around artificial intelligence. The S&P 500 has soared 15% year-to-date and has found support above the 200-day moving average over the past two years. Likewise, the technology-heavy NASDAQ 100 is up 20% heading into year-end, arousing valuation concerns in some quarters.
Amid the blockbuster gains, professional investors are increasingly locking in profits, resulting in significant pullbacks close to key technical levels. Bank of America touts retail investors as the backbone behind the recent dip buying. The strategy has paid off handsomely as the S&P 500 has rallied to record highs.
The rally in the equity markets is set to persist despite concerns about valuation. This sentiment is echoed by Morgan Stanley’s Michael Wilson, who expects solid earnings to propel US stocks to new heights in 2026.
“While overhangs from Federal Reserve guidance and the shutdown have weighed on recent price action, these are temporary headwinds on the way to a solid 2026 driven by earnings growth,” Wilson wrote in a note.
The US equity markets have surged to record highs, shrugging off worries about President Donald Trump’s trade war, tariffs, and signs of a cooling economy. Similarly, strategists at Goldman Sachs, Deutsche Bank, and other firms have struggled to improve their outlooks as equities have reached record highs.
“Analysts have a tendency to be conservative going into earning season, but they were particularly conservative this time, and I think the same goes for strategists,” said Wall Street veteran Ed Yardeni of eponymous firm Yardeni Research. “I’ve been a cheerleader for the resilience of the economy and even I’ve been surprised that earnings — profit margins — haven’t really flinched in the face of Trump’s tariffs.”
With the overall market remaining bullish, let’s take a look at some of the best breakout stocks to invest in.
Our Methodology
To identify the top breakout stocks to invest in, we used the Finviz screener to screen for stocks that have breached the 200-day moving average. We settled on stocks breaking out above the 200-day moving average on high trading volume, which is more than twice the three-month average. We further refined the list by selecting stocks with a relative volume greater than 2, meaning their current trading volume is at least twice the three-month average, indicating heightened market activity and potential investor interest. To assess institutional backing, we ranked the selected stocks in ascending order according to the scale of hedge fund ownership reported in the second quarter of 2025.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research shows we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
Best Breakout Stocks to Invest In
10. Benitec Biopharma Inc. (NASDAQ:BNTC)
Share Price as of November 14: $13.29
200-Day Simple Moving Average: $13.45
Relative Volume: 2.13
Number of Hedge Fund Holders: 9
Benitec Biopharma Inc. (NASDAQ:BNTC) is one of the best breakout stocks to invest in. On November 4, an analyst at Citizens JMP raised the stock’s price target to $22 from $20 while reiterating an Outperform rating. The price target hike follows topline clinical data results that showed a 100% response rate for BB-301 in Phase 1b/2a of the treatment for Oculopharyngeal Muscular Dystrophy (OPMD), a rare genetic muscle-wasting disease.
The US Food and Drug Administration has already granted the company Fast Track designation for the gene therapy following the positive interim results. In the trials, the treatment successfully reduced swallowing difficulties in patients and shortened the time required to consume liquids.
“We are excited by the profound effect that BB-301 can potentially have on this progressive disease as demonstrated by the interim clinical trial results for Cohort 1, where 100% of patients were responders” said Jerel A. Banks, M.D., Ph.D., Executive Chairman and Chief Executive Officer of Benitec Biopharma Inc. “Securing Fast Track designation for BB-301 reflects the strength of our clinical data and the urgency of the unmet need in OPMD. “
Meanwhile, on November 11, Suvretta Capital Management and related entities announced a $20 million investment in Benitec Biopharma.
Benitec Biopharma Inc. (NASDAQ:BNTC) is a clinical-stage biotechnology company that develops novel genetic medicines using its proprietary DNA-directed RNA interference (ddRNAi) platform. Its platform combines gene therapy and RNA interference to create treatments that silence disease-causing genes and simultaneously replace them with functional, wild-type genes after a single administration.
9. Arcos Dorados Holdings Inc. (NYSE:ARCO)
Share Price as of November 14: $7.59
200-Day Simple Moving Average: $7.44
Relative Volume: 2.37
Number of Hedge Fund Holders: 15
Arcos Dorados Holdings Inc. (NYSE:ARCO) is one of the best breakout stocks to invest in. On November 11, JPMorgan lowered its price target for the stock to $8.70 from $8.80, despite the company delivering strong third-quarter results while navigating challenging consumer dynamics.
Total revenue in the quarter rose 12.7% to $1.2 billion, in line with blended inflation. The revenue increase was driven by strong growth in Argentina and Mexico. Additionally, Arcos Dorados Holdings Inc. (NYSE:ARCO) benefited from an aggressive marketing strategy and a digital approach that supported sales growth. Digital channels were up 11.2% in the quarter.
It also generated $201.1 million in adjusted EBITDA, an improvement from $125 million in the same quarter last year. Arcos Dorados Holdings’ third-quarter earnings per share more than quadrupled to $0.71 compared to $0.17 delivered in the same quarter the previous year.
“During the third quarter of 2025, we successfully navigated challenging consumer dynamics to generate balanced US dollar revenue growth and solid profitability. We are focused on exceeding guests’ expectations in today’s business while modernizing and improving our growth processes to support higher returns on investment and to ensure Arcos Dorados maintains its leadership position for many years to come,” said CEO Luis Raganato.
Arcos Dorados Holdings Inc. (NYSE:ARCO) is the world’s largest independent McDonald’s franchisee, operating the brand’s restaurants in 21 countries and territories across Latin America and the Caribbean. The company owns, operates, and sub-franchises McDonald’s locations and is responsible for managing their operations, marketing, and expansion.
8. CAE Inc. (NYSE:CAE)
Share Price as of November 14: $26.67
200-Day Simple Moving Average: $26.44
Relative Volume: 2.21
Number of Hedge Fund Holders: 22
Cae Inc. (NYSE:CAE) is one of the best breakout stocks to invest in. On November 14, TD Cowen’s Tim James reaffirmed a Buy rating on Cae Inc. (NYSE:CAE) with a price target of C$46.00, citing strong long-term potential driven by solid performance in the Defense segment and a conservative FY2026 outlook. He highlighted CAE’s robust business model, expected ROIC growth, and management’s focus on operational efficiency and portfolio optimization. Despite headwinds in the Civil segment, including OEM production challenges and soft travel demand, the company’s transformation strategy and disciplined capital allocation continue to support a favorable investment case.
On November 11, Cae Inc.’s Chief Executive Officer Mathew Bromberg reiterated that it is well-positioned to capitalize on generational investments in the defense sector in the US, Canada, and Europe. Likewise, the executive expects the company to deliver higher returns, more substantial cash flow, and sustainable shareholder value.
The remarks follow the company’s strong second-quarter fiscal 2026 results, with revenues of $1.24 billion, compared to $1.14 billion in the same quarter of the prior year. The company also reported earnings per share of $0.23, a significant improvement from $0.16 delivered in the same quarter last year.
The better-than-expected results came from Cae signing a training solutions contract valued at $592.8 million for a range of long-term commercial and business aviation training. Its defense unit also booked orders worth $555.8 million. Cae is also capitalizing on strong and durable fundamentals in a secular growth market for aviation training solutions. In October, it signed a deal to deliver a Boeing 737 Max full-flight simulator to the training group of Malaysia Airlines Group.
CAE Inc. (NYSE:CAE) is a technology company that provides simulation, training, and critical operations solutions for the aviation and defense industries. It manufactures advanced flight simulators and provides training services for the civil aviation industry.
7. KalVista Pharmaceuticals, Inc. (NASDAQ:KALV)
Share Price as of November 14: $13.62
200-Day Simple Moving Average: $12.36
Relative Volume: 2.89
Number of Hedge Fund Holders: 28
Kalvista Pharmaceuticals Inc. (NASDAQ:KALV) is one of the best breakout stocks to invest in. On November 11, analysts at Citizens lowered their price target of the stock to $28 from $29 while reiterating a Market Perform rating. Despite the cut, the price target remains well above the current trading range, indicating significant upside potential.
The research firm remains confident about Kalvista Pharmaceuticals’ prospects, given the successful launch of EKTERLY, the only oral on-demand therapy to treat hereditary angioedema (HAE) attacks. Oral treatment is attracting strong demand and rapid adoption among physicians and individuals with HAE. The therapy has already attracted 937 start forms covering about 8% of the people diagnosed with HAE in the US. The start form translates to about $31 million in potential revenue.
The company has already launched EKTERLY in Germany, with approval in Australia, bringing the total number of regulatory approvals to five.
“We continue to see encouraging trends, with both new patient starts and repeat prescriptions increasing consistently, reflecting sustained uptake and confidence in the clinical value of EKTERLY as the first and only oral on-demand treatment for hereditary angioedema,” said Ben Palleiko, CEO of KalVista
During the third quarter, Kalvista achieved $13.7 million in net product revenue. It exited the quarter with $309.2 million in cash and cash equivalents and expects projected EKTERLY revenue to propel it to profitability.
KalVista Pharmaceuticals, Inc. (NASDAQ:KALV) is a biopharmaceutical company focused on developing and commercializing oral therapies for rare diseases, primarily hereditary angioedema (HAE). They develop small-molecule inhibitors that target the plasma kallikrein enzyme in the kallikrein-kinin system, which is a key driver of HAE attacks.
6. CorMedix Inc. (NASDAQ:CRMD)
Share Price as of November 14: $11.62
200-Day Simple Moving Average: $11.17
Relative Volume: 2.91
Number of Hedge Fund Holders: 29
CorMedix Inc. (NASDAQ:CRMD) is one of the best breakout stocks to invest in. On November 13, H.C. Wainwright’s Brandon Folkes reaffirmed a Buy on CorMedix Inc. (NASDAQ:CRMD), citing strong DefenCath-driven revenue, Melinta acquisition synergies, and multiple growth catalysts including Rezzayo and TPN Phase 3 data in 2026. Despite TDAPA pricing risks, robust financials and pipeline potential support a favorable long-term outlook.
On November 12, CorMedix Inc. delivered strong third-quarter results, underscoring demand for specialty injectable therapies. It posted $104.3 million in net revenue and $130.8 million in pro forma net revenue, driven by higher utilization of DefenCath by outpatient dialysis customers.
Likewise, the company bounced back to profitability, generating $108.6 million in net income, or $1.26 per share. It was an improvement from a net loss of $2.8 million, or $0.05 per share, delivered in the same quarter last year. Growth in net income was driven by net product sales and a one-time tax benefit of $59.7 million.
CorMedix is betting on DefenCath, an FDA-approved catheter lock solution that offers significant risk reduction in catheter-related bloodstream infections (CRBSI). Consequently, it has raised its full-year 2025 pro forma net revenue to between $390 million and $410 million. It also expects net revenue to range between $115 million and $135 million. Following the acquisition of Melinta Therapeutics, the company expects to capture $30 million in synergy.
CorMedix Inc. (NASDAQ:CRMD) is a biopharmaceutical company focused on developing and commercializing therapeutic products for infectious and inflammatory diseases. Its lead product is DefenCath, an antimicrobial catheter lock solution used to prevent catheter-related bloodstream infections in hemodialysis patients.
5. Tencent Music Entertainment Group (NYSE:TME)
Share Price as of November 14: $19.07
200-Day Simple Moving Average: $18.66
Relative Volume: 4.29
Number of Hedge Fund Holders: 31
Tencent Music Entertainment Group (NYSE:TME) is one of the best breakout stocks to invest in. On November 12, analysts at Barclays raised Tencent Music Entertainment Group (NYSE:TME)’s price target to $28 from $27, impressed by the company’s strong third-quarter results. The firm also reiterated an Overweight rating buoyed by the company’s growth trajectory.
The Chinese music streaming company reported a 20.6% increase in revenue, totaling $1.19 billion, driven by a 27.2% rise in online music service revenues to $979 million. The growth is attributed to increases across multiple revenue streams, including music subscriptions, offline performances, and advertising services.
For starters, subscription revenues were up 17.2% year-over-year to $632 million, driven by growth in the SVIP membership program. Tencent Music Entertainment Group also benefited from the monthly average revenue per user increasing to $1.60 from $1.50, attributed to the success of its premium tier offerings.
Consequently, operating profit surged 26.4% to $381 million. Net profit attributed to shareholders increased 36% to $302 million, with diluted earnings per share coming in at $0.19. The company is banking on its expanded music catalog owing to strategic partnerships with labels in South Korea and Japan. The company also strengthened its offering with the unveiling of an ad-supported membership tier that attracts listeners from the free tier.
Tencent Music Entertainment Group (NYSE:TME) provides online music, audio, and karaoke services in China. The company aims to create a social and interactive experience for users, providing services for musicians and labels to distribute and monetize their content.
4. Gates Industrial Corporation plc (NYSE:GTES)
Share Price as of November 14: $22.71
200-Day Simple Moving Average: $22.44
Relative Volume: 2.11
Number of Hedge Fund Holders: 35
Gates Industrial Corporation PLC (NYSE:GTES) is one of the best breakout stocks to invest in. On November 14, Wells Fargo initiated coverage on Gates Industrial Corporation PLC (NYSE:GTES) with a Hold rating and a price target of $23.00. Meanwhile, on November 13, JPMorgan touted Gates Industrial as one of the companies poised to benefit from the growing demand for AI and data center infrastructure.
Earlier, on November 11, Gates Industrial Corporation PLC announced the launch of Data Master Eco, designed to enhance its data center portfolio. The halogen-free liquid cooling solution is specifically designed for hyperscale data centers and high-performance computing environments. Its edge stems from its ability to reduce manufacturing energy use by 75% by eliminating the need for natural gas, water, and steam in the curing process. It also reduces embodied emissions while simplifying recycling at the source, enhancing production efficiency.
The next-generation liquid cooling solution is poised to strengthen the company’s ability to supply direct-to-chip cooling hardware within its data center solution ecosystem. Data Master Eco also affirms that Gates Industrial’s edge and expertise are addressing challenges in modern computing.
“The Data Master Eco and our broader Data Center Solutions portfolio underscore our strategy to lead in high-value, high-growth markets,” said Ivo Jurek, chief executive officer of Gates. “As AI-enabled data centers scale to meet the market demand, and the need for advanced thermal-management solutions becomes essential, we’re focused of delivering application specific, high-performing liquid-cooling technologies that will define the next generation of global infrastructure.”
Gates Industrial Corporation plc (NYSE:GTES) manufactures and sells highly engineered power transmission and fluid power solutions for a wide range of industrial and consumer markets. These products include belts, hoses, and other components that perform critical functions in applications from automotive and energy to home appliances and heavy machinery.
3. Tripadvisor, Inc. (NASDAQ:TRIP)
Share Price as of November 14: $15.82
200-Day Simple Moving Average: $15.50
Relative Volume: 2.18
Number of Hedge Fund Holders: 40
Tripadvisor, Inc. (NASDAQ:TRIP) is one of the best breakout stocks to invest in. On November 11, Bernstein reiterated an Outperform rating on the stock, impressed by Tripadvisor, Inc. (NASDAQ:TRIP) ‘s integration plan. Likewise, the research firm reiterated a $20 price target, representing a 30% upside potential.
The company has been under pressure from an activist investor to spin off Viator, an online marketplace for booking tours, activities, and excursions worldwide. The company has shrugged off the push and reiterated plans to integrate it into the core brand TripAdvsior business. It expects the integration to help streamline operations and create significant synergies.
Bernstein has echoed the integration push, insisting it could result in cost savings of $85 million, which could boost the company’s FY 27 EBITDA by approximately 20%. The company’s EBITDA stands at $171 million. Additionally, the research firm has touted the online restaurant booking platform TheFork. The platform has delivered 28% revenue growth and 22% margins in the third quarter, making it an attractive asset under the core brand.
TripAdvisor delivered mixed third-quarter results with earnings per share of $0.65 that beat analyst estimates by $0.09. Revenue in the quarter totaled $553 million, below estimates of $562.92 million.
Tripadvisor, Inc. (NASDAQ:TRIP) is an online travel company that connects travelers with a vast database of user-generated reviews, guidance, and booking options for hotels, restaurants, tours, and attractions. The company serves as a platform for both planning and booking travel, utilizing a portfolio of brands, including Viator and TheFork, to offer booking services alongside its core review and guidance features.
2. Regal Rexnord Corporation (NYSE:RRX)
Share Price as of November 14: $137.55
200-Day Simple Moving Average: $136.07
Relative Volume: 1.75
Number of Hedge Fund Holders: 43
Regal Rexnord Corporation (NYSE:RRX) is one of the best breakout stocks to invest in. On November 3, Barclays analyst Julian Mitchell increased Regal Rexnord Corporation’s (NYSE:RRX) price target to $165 from $161 while reiterating an Overweight rating. The positive stance is in response to what the research firm touts as data center exposure becoming increasingly material than expected.
That was evident as the company confirmed a 10% order growth at the Baird 55th Annual Global Industrial Conference on November 12. An increased focus on data centers, the medical sector, and automation is driving growth. Likewise, it expects the data center business to double in the next two years, backed by a billion-dollar pipeline. Regal Rexnord is also experiencing tremendous growth in the provision of surgical robots and humanoids, amid impressive strides in the aerospace segment.
“This year, we have booked about $30 million of humanoid-related orders with multiple OEM customers and are working on a $100 million bid pipeline. Some forecasts for the humanoid market call for tremendous growth. The bottom line here is we are well positioned for growing demand technologically and in our ability to produce at scale on a global basis. Aerospace is another strategic focus. Our aerospace business is roughly $350 million, includes products such as servo motors, actuators, bearings, couplings, and seals,” said CEO Louis Pinkham
Regal Rexnord Corporation (NYSE:RRX) is a company that manufactures and provides engineered solutions for powering, transmitting, and controlling motion across various industries. It produces products such as electric motors, power transmission components, and automation controls, serving markets including industrial, commercial, aerospace, and energy.
1. Alkermes plc (NASDAQ:ALKS)
Share Price as of November 14: $31.40
200-Day Simple Moving Average: $30.34
Relative Volume: 4.01
Number of Hedge Fund Holders: 44
Alkermes Plc (NASDAQ:ALKS) is one of the best breakout stocks to invest in. On November 12, Alkermes Plc (NASDAQ:ALKS) delivered positive topline clinical trial data for its narcolepsy treatment, Alixorexton. Consequently, analysts at TD Cowen reiterated a Buy rating on the stock with a $40 price target.
Alixorexton, formerly ALKS 2680, is the company’s candidate treatment in phase 2 development for the treatment of narcolepsy type 1 (NT1), NT2, and idiopathic hypersomnia (IH). The trial results show that 95% of patients completed the 8-week double-masked period, affirming a tolerable safety profile. The drug also met its dual primary endpoints, affirming clinically meaningful improvements from baseline compared to placebo.
“Alixorexton is the first and only oral orexin 2 receptor agonist to demonstrate efficacy in large randomized, double-blind, multi-week phase 2 studies across a range of once-daily doses in patients with narcolepsy type 1 and type 2. We are proud to lead the way in translating innovative science into a potential new treatment option for patients and look forward to moving alixorexton into phase 3 development as quickly as possible,” said Craig Hopkinson, M.D., Chief Medical Officer and Executive Vice President of Research & Development at Alkermes.
Following the topline results, Alkermes plans to conduct a phase 3 program in the first quarter of next year.
Alkermes plc (NASDAQ:ALKS) is a global biopharmaceutical company that develops and commercializes medicines for central nervous system (CNS) disorders, such as schizophrenia, bipolar I disorder, alcohol dependence, and opioid dependence. It applies its scientific and proprietary technologies to create a portfolio of commercial products and has a pipeline of investigational drugs for neurological and psychiatric conditions.
While we acknowledge the potential of Alkermes plc (NASDAQ:ALKS) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than ALKS and that has 100x upside potential, check out our report about this cheapest AI stock.
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