In this article, we’ll look at the 10 Best Debt-Free Mid-Cap Stocks to Buy According to Hedge Funds.
Mid-cap stocks are poised for an impressive run heading into the US midterm election. According to Bank of America strategists led by Michael Hartnett, aggressive intervention by the US President Donald Trump’s administration to reduce the prices of energy, healthcare, credit, housing, and electricity is poised to be the catalyst that pushes mid-cap stocks higher.
“We are long Main Street, short Wall Street until Trump approval rating up on policy pivot to address affordability,”Bank of America Strategists wrote in a note.
In addition, the strategists expect mid-cap stocks to rally amid the ongoing rotation out of tech amid concerns about disruption from artificial intelligence.
According to TCW Group global head of distribution Jennifer Grancio, opportunities are increasingly emerging around small and mid-cap companies that sat outside the market’s focus in the past few years. The sentiment comes on the Nasdaq 100 dropping 4.6% and posting its biggest three-day drop since April 2024. The drop underlined investors’ concerns about premium valuations around large caps.
On the other hand, hopes of stronger US economic data and a more dovish US Federal Reserve continue to improve sentiments around mid-cap companies. In addition, mid-cap companies continue to attract interest as they possess established business models and expansive market opportunities to capitalize on the rotation from large-cap companies. Positive earnings revisions and strong liquidity will also continue to boost demand for equities beyond large-cap blue-chip names.
Our Methodology
To identify the best debt-free Mid Cap stocks, we first compiled a list of U.S. stocks with a market capitalization of at least $2 billion. For the resulting list of stocks, we compared their enterprise value (EV) to their market capitalization (EV-to-market cap ratio) and shortlisted those with a ratio below 1.0. A ratio of 1.0 or below indicates that the company has no debt or minimal debt. From this refined list, we identified the top 12 stocks with a potential upside of at least 15% as of February 16, and the highest hedge fund ownership by leveraging data from Insider Monkey’s Q3 2025 hedge fund database. Finally, we ranked these stocks in ascending order by the number of hedge funds holding positions.
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 Debt-Free Mid-Cap Stocks to Buy According to Hedge Funds
10. Bitmine Immersion Technologies, Inc. (NYSE:BMNR)
Stock Upside Potential: 105.15%
Number of Hedge Fund Holders: 20
Bitmine Immersion Technologies, Inc. (NYSE:BMNR) is one of the best debt-free mid-cap stocks to buy according to hedge funds. On February 9, Bitmine Immersion Technologies, Inc. (NYSE:BMNR) confirmed that it has accumulated $10 billion in combined cryptocurrency, cash, and investment holdings.
The company’s portfolio included 4,325,738 Ethereum tokens valued at about $9.2 billion. It also maintains 193 Bitcoin and a $200 million investment in Beast Industries, $595 million in cash, and a $19 million stake in Eightco Holdings. Bitmine Immersion is increasingly taking advantage of a slump in the ETH network, citing strong on-chain activity and record-high daily transactions of 2.5 million.
The company is also in the process of launching the Made in America Validator Network, which could take its ETH staking rewards to $374 million.
“Bitmine has staked more ETH than other entities in the world,” said Thomas Lee, Executive Chairman of Bitmine, in the press release.
Meanwhile, BlackRock has increased its stake in Bitmine Immersion Technologies to 9.05 million shares, valued at $246 million. The investment follows ARK Invest, also boosting its stake, affirming growing interest from institutional investors.
On January 16, B.Riley kept its Buy rating on Bitmine Immersion Technologies and repeated its $47 price target after the company invested $200 million in Beast Industries, linked to content creator MrBeast. The move expands BMNR beyond its Ethereum strategy and could give it access to MrBeast’s huge audience of 450 million followers, while opening new opportunities in DeFi services. B.Riley said the deal boosts BMNR’s credibility as a smart capital allocator, though it also noted risks around regulation and distribution of MrBeast’s planned financial platform.
Bitmine Immersion Technologies, Inc. (NYSE:BMNR) is a blockchain technology company that has transformed into a leading Ethereum (ETH) treasury company and provider of immersion-cooled digital asset infrastructure.
9. SailPoint, Inc. (NASDAQ:SAIL)
Stock Upside Potential: 67.01%
Number of Hedge Fund Holders: 25
Sailpoint Inc. (NASDAQ:SAIL) is one of the best debt-free mid-cap stocks to buy according to hedge funds. On February 17, Mizuho analyst Gregg Moskowitz cut the price target on Sailpoint Inc. (NASDAQ:SAIL) from $23 to $20 but kept a Neutral rating. The firm lowered targets across software stocks because of recent sector weakness, though it still sees some good long-term opportunities. Mizuho noted that fears about AI disruption have hurt sentiment badly, but its latest checks showed software demand holding up well overall.
On February 4, Sailpoint Inc. underlined it is focused on capitalizing on increased customer demand for modern adaptive identity security solutions. The company is increasingly delivering the next generation of identity and security solutions built to adapt and scale modern enterprise. The push is part of an effort to capitalize on the rapid integration of AI and automated agents into the enterprise, which has created new security challenges. The company has already unveiled SailPoint Agent Identity Security, which allows organizations to discover, classify, govern, and secure every agent.
Accenture Chief Information Officer Tony Leraris has already confirmed plans to evaluate SailPoint’s Agent Identity Security and determine how it can complement its existing controls and support enterprise-wide AI adoption.
“We saw an opportunity to help organizations navigate this new phase of identity security with innovations that can adapt to modern automated, complex identity environments,” said Chandra Gnanasambandam, CTO and EVP Product, SailPoint. “The strong response we’ve seen from our customers signals that they have been waiting for a vision like this and are now moving to adopt it quickly and with conviction.”
SailPoint, Inc. (NASDAQ:SAIL) is a leading cybersecurity company specializing in identity security and governance. The company provides AI-driven software solutions designed to manage, secure, and govern access to applications and data for enterprises, ensuring that the right users have the right access to the right resources at the right time.
8. SEI Investments Company (NASDAQ:SEIC)
Stock Upside Potential: 41.48%
Number of Hedge Fund Holders: 35
SEI Investments Company (NASDAQ:SEIC) is one of the best debt-free mid-cap stocks to buy according to hedge funds. On February 10 at the UBS Financial Services Conference 2026, SEI Investments Company (NASDAQ:SEIC) reiterated its focus on integrating artificial intelligence and on capital allocation strategies.
The company plans to enhance its margins by 25 to 50 basis points through automation and AI integration. In addition, the company’s IMS segment, a tech-enabled operating platform for alternative and traditional asset managers, is transitioning 70% of its focus to alternative investments. It also plans to pursue aggressive share buy-backs and return up to 100% of its free cash flow to shareholders.
Earlier on February 4, UBS initiated coverage of SEI Investments Company with a Buy rating and a $115 price target. According to the research firm, the company is an investment play on growth in the alternative asset management industry. Consequently, it is well-positioned to benefit from strong secular tailwinds, as the management team has enhanced its go-to-market strategy, driven by higher margins and optimized capital allocation.
SEI Investments Company (NASDAQ:SEIC) is a global provider of financial technology, investment management, and operations platforms, primarily serving financial advisors, institutional investors, and investment managers. They offer outsourced services, including asset management, fund administration, and specialized technology for wealth management, managing or administering over $1 trillion in assets.
7. InterDigital, Inc. (NASDAQ:IDCC)
Stock Upside Potential: 18.18%
Number of Hedge Fund Holders: 35
InterDigital, Inc. (NASDAQ:IDCC) is one of the best debt-free mid-cap stocks to buy according to hedge funds. On February 5, Chief Executive Officer Liren Chen reiterated that InterDigital, Inc. (NASDAQ:IDCC) had accelerated momentum across its licensing programs, including record performance in smartphones.
The company completed a valuable licensing deal with Samsung and other top-ten smartphone vendors, Vivo and Honor, further strengthening its licensing segment. Consequently, the company ended the year with a near-record total revenue of $834 million and record smartphone revenue of $678.9 million. Similarly, it reported a record net income of $406.6 million and adjusted EBITDA of $588.9 million. Fourth-quarter revenue came in at $158.2 million, surpassing the $144 to $148 million outlook range.
“Through the year we accelerated momentum across our licensing programs, including a record performance in smartphones; we significantly deepened our AI expertise and industry leadership in our research teams; and we drove double digit growth in our patent portfolio to help us deliver long-term value for shareholders,” said CEO Chen.
On February 10, InterDigital, Inc. filed a patent infringement lawsuit against Hisense and TCL. The litigation filed in Germany, Brazil, and India focuses on patents related to HEVC VP9, AV1 video compression, and HDR technologies.
InterDigital, Inc. (NASDAQ:IDCC) is a global research and development (R&D) company that designs and develops foundational technologies used in digital cellular, wireless communication, and video processing. Instead of manufacturing finished products, InterDigital patents its innovations and licenses them to major manufacturers of mobile devices, consumer electronics, IoT devices, and automobiles.
6. Joby Aviation, Inc. (NYSE:JOBY)
Stock Upside Potential: 58.32%
Number of Hedge Fund Holders: 36
Joby Aviation Inc. (NYSE:JOBY) is one of the best debt-free mid-cap stocks to buy according to hedge funds. On February 13, Bloomberg reported that Toyota has moved to safeguard its $1 billion investment pledge in Joby Aviation Inc (NYSE:JOBY).
The Japanese automaker is helping the air taxi maker troubleshoot production glitches at its facilities as it also explores a deeper manufacturing role. Toyota already has about 200 employees working to supply critical parts, provide training tips, and operate an assembly line. The automaker will also deploy lean manufacturing precepts known as the Toyota Production System.
The strategic partnership comes as Joby Aviation Inc assembles a prototype aircraft, stress-tests parts, and manufactures components as it awaits a $250 million tranche of Toyota’s promised $894 million funding.
Canaccord Genuity reiterated a Hold rating on Joby Aviation on February 3 but cut the price target to $15.50 from $17.The price target cut comes on the heels of the company completing a $1.29 billion equity and debt offering. The substantial capital raise will strengthen the company’s ability to accelerate certification and manufacturing efforts. However, it has raised concerns among existing shareholders about stock dilution.
Joby Aviation, Inc. (NYSE:JOBY) is a California-based aerospace company developing all-electric vertical take-off and landing (eVTOL) aircraft designed for commercial passenger air taxi services. Their piloted, five-seat aircraft aims to reduce urban congestion with zero-operating emissions.
5. Manhattan Associates, Inc. (NASDAQ:MANH)
Stock Upside Potential: 60.14%
Number of Hedge Fund Holders: 41
Manhattan Associates, Inc. (NASDAQ:MANH) is one of the best debt-free mid-cap stocks to buy according to hedge funds. On January 27, Manhattan Associates, Inc. (NASDAQ:MANH) chief executive officer reiterated that business momentum continues to strengthen. The remarks came as the company delivered a record fourth quarter of cloud bookings and continued to gain market share.
Consolidated revenue in the quarter soared to $270.4 million compared to $255.8 million delivered in the same quarter a year ago. The increase was driven by cloud subscription revenue increasing to $108.6 million from 90.3 million. On the other hand, license revenue fell to $2.6 million from $5.5 million delivered in the same quarter last year, as services revenue came in at $120 million. On the other hand, the company posted adjusted diluted earnings per share of $1.21, compared with $1.17 per share last year.
Full-year revenue increased to $1.08 billion, up from $1.04 billion in 2024, while cloud revenue increased to $408.1 million, up from $337.2 million. Meanwhile, full-year adjusted diluted earnings per share totaled $5.06, compared with $4.72 in 2024.
Consequently, on January 28, Truist Securities initiated coverage of the stock with a Buy rating and a $240 price target, impressed by the company’s fourth-quarter and full-year 2025 results. The research firm remains confident in the company’s ability to achieve sustained strong 20% cloud subscription revenue visibility.
Manhattan Associates, Inc. (NASDAQ:MANH) is a global technology leader that provides software solutions to manage and optimize supply chains, inventory, and omnichannel commerce. The company focuses on connecting front-end sales (customer engagement) with back-end execution (warehousing and logistics) on a single cloud-native platform.
4. Mobileye Global Inc. (NASDAQ:MBLY)
Stock Upside Potential: 64.12%
Number of Hedge Fund Holders: 43
Mobileye Global Inc. (NASDAQ:MBLY) is one of the best debt-free mid-cap stocks to buy according to hedge funds. On February 10, analysts at Oppenheimer reiterated an Outperform rating on Mobileye Global Inc. (NASDAQ:MBLY).
The positive stance comes on Mahindra selecting Mobileye Global as its tier 1 tasked with supplying both Super Vision and Surround ADAS (Advanced Driver Assistance Systems) solutions to the automaker. The system will be powered by Mobileye’s EyeQ6 High system-on-chip technology and will enable hands-off, eyes-on highway driving under specified conditions. The contract validates the company’s technology platform and affirms prospects of future OEM technology roadmaps.
“This nomination demonstrates Mahindra’s commitment to advanced safety technologies and strengthens Mobileye’s long-term investment in India as a strategic hub for ADAS localization and production,” said Amnon Shashua, President and CEO of Mobileye.
The deal positions the company as a partner of choice for vehicle OEMs seeking to deliver autonomous and safety solutions in a timely and affordable manner. While the Mahindra pact is expected to yield limited revenue, it should pave the way for a medium-and long-term growth trajectory.
Mobileye Global Inc. (NASDAQ:MBLY) is a leading technology company specializing in the development and deployment of Advanced Driver-Assistance Systems (ADAS) and autonomous driving technologies. It creates computer vision, software, and hardware solutions that enable vehicles to perceive their surroundings, enhancing road safety and paving the way for self-driving mobility.
3. Bio-Rad Laboratories, Inc. (NYSE:BIO)
Stock Upside Potential: 19.20%
Number of Hedge Fund Holders: 43
Bio-Rad Laboratories, Inc. (NYSE:BIO) is one of the best debt-free mid-cap stocks to buy according to hedge funds. On February 12, Bio-Rad Laboratories, Inc. (NYSE:BIO) delivered solid fourth-quarter and full-year results despite a challenging year marked by geopolitical uncertainty and continued pressure on academic research.
The company delivered modest revenue growth and strong free cash flow as it successfully integrated the recently acquired digital PCR developer, Stilla Technologies. Revenue in the quarter was up 3.9% to $667.5 million, driven by higher sales in the Clinical Diagnostics segment. Net income dropped to $67.7 million or $2.51 per diluted share compared to $81.2 million or $2.90 per diluted share in the same quarter a year earlier.
Full-year revenue was up 0.7% to $2.58 billion, with net income dropping to $270.5 million or $9.92 a share compared to $291.1 million or $10.31 a share. During the year, the company expanded its leadership in Droplet Digital PCR through the acquisition and integration of Stilla Technologies. It also generated $532 million in cash from operations and delivered $375 million of free cash flow. For the current year, Bio-Rad Laboratories management expects revenue to grow between 0.5% and 1.5%, with a non-GAAP operating margin of 12% to 12.5%.
Bio-Rad Laboratories, Inc. (NYSE:BIO) is a global leader in developing, manufacturing, and marketing a broad range of innovative products for the life science research and clinical diagnostics markets. It focuses on advancing scientific discovery and improving healthcare through tools that separate, purify, identify, and analyze biological materials.
2. Instacart (Maplebear Inc.) (NASDAQ:CART)
Stock Upside Potential: 50.05%
Number of Hedge Fund Holders: 60
Instacart (Maplebear Inc.) (NASDAQ:CART) is one of the best debt-free mid-cap stocks to buy according to hedge funds. On February 12, Instacart (Maplebear Inc.) (NASDAQ:CART) delivered impressive fourth-quarter and full-year 2025 results that affirmed accelerating growth and improving profitability.
The company delivered a 12.3% year-over-year increase in revenue in the fourth quarter to $992 million, while adjusted earnings per share came in at $0.97, against the $0.95 expected. Full-year revenue was up 11% year over year to $3.74 billion, driven by an 11% increase in transaction revenue.
The better-than-expected results were driven by strong GTV growth of 14% year over year as the company maintained its position as the leading digital-first grocery delivery platform.
“In Q1, we’re guiding to the strongest year-over-year GTV growth we’ve provided as a public company, and we’re focused on building on this momentum to drive durable, profitable growth over the long term,” said Chris Rogers, Chief Executive Officer
Consequently, adjusted EBITDA rose 23% to $1.09 billion, while GAAP net income came in at $447 million. The company generated $971 million in operating cash flow and also returned $1.4 billion to shareholders through stock buybacks. “This opportunistic approach to share repurchases reflects our confidence in our business today and in our ability to keep investing, scaling, and pressing our advantage,” Rogers said.
Instacart (Maplebear Inc.) (NASDAQ:CART) is a North American retail technology company that operates a massive online marketplace for grocery delivery and pickup, connecting customers with personal shoppers who fulfill orders from local retail stores.
1. Cytokinetics, Incorporated (NASDAQ:CYTK)
Stock Upside Potential: 38.85%
Number of Hedge Fund Holders: 65
Cytokinetics (NASDAQ:CYTK) is one of the best debt-free mid-cap stocks to buy according to hedge funds. On February 4, B. Riley initiated coverage of Cytokinetics (NASDAQ:CYTK) with a Buy rating and a $108 price target. The positive stance underscores the research firm’s confidence about the company’s ability to capture market share in the cardiac myosin inhibitor space.
The company has already started flexing its muscles in the space with Myqorzo, its candidate drug approved by the US Food and Drug Administration for the treatment of symptomatic obstructive hypertrophic cardiomyopathy (oHCM). According to B.Riley, the company’s competitive edge stems from its candidate drug’s “materially streamlined REMS” compared to Bristol Myers Squibb’s CAMZYOS.
Launched at the start of the year, Myqorzo has zero drug-drug interaction pharmacy recalls , more flexible echo windows, and faster dose stabilization. While there are about 11,000 active CAMZYOS patients, higher attrition rates suggest a sizable 5K churned patients that Cytokinetics can target with its drug.
On January 28, Barclays initiated coverage of the stock with an Overweight rating and an $87 price target. The investment bank has touted the company’s prospects following the launch of Myqorzo, a differentiated label that reduces the need for echocardiogram monitoring.
Cytokinetics, Incorporated (NASDAQ:CYTK) is a late-stage biopharmaceutical company focused on discovering, developing, and commercializing muscle-directed medicines to treat serious diseases, particularly those affecting cardiovascular and neuromuscular function. Founded in 1997, the company specializes in muscle biology to develop small-molecule compounds that act as either activators or inhibitors to improve muscle function.
While we acknowledge the potential of CYTK to grow, 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 CYTK and that has 100x upside potential, check out our report about this cheapest AI stock.
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