At the beginning of 2026, Donald Trump announced plans to cap credit card interest rates at 10%. Trump received support from Senator Bernie Sanders, who sided with the president by saying the move ‘makes sense’:
“But, I have to admit, there is one issue that Trump has identified that does make sense. He is right when he says that big banks are ripping off the American people with outrageously high credit card interest rates.”
Bank stocks fell as a result of the announcement, driving Bernie Sanders’ point home that the interests of the elite are not aligned with the average American.
It isn’t surprising that Wall Street has a different opinion from the government. Brian Jacobsen, chief economic strategist at Annex Wealth Management, believes discussions in Congress rather than direct executive decisions would help resolve the problems in a much better way and also remove the uncertainty surrounding banking stocks:
“For now, it’s an overhang, but that overhang could clear quickly if it’s more a call for Congress to do something instead of some specific policy action by the executive office”
Banks are ready to push back against the potential decision, not ruling out legal action against the government. Jamie Dimon, CEO of JPMorgan, said everything was on the table as far as the bank’s reaction was concerned.
Short-term headwinds like these often bring about buying opportunities for long-term investors, which is exactly why we decided to look at the 10 best financial stocks to buy for the long term.
Our Methodology
To come up with our list of the 10 Best Financial Stocks to Buy for the Long Term, we considered stocks from the financials sector with a market cap of at least $2 billion. We then identified companies expected to grow revenue by at least 15% per year over the next 5 years. We also ensured these were profitable companies with positive forward EPS growth. We then assessed their potential upside and ranked them in ascending order. The number of hedge funds that hold the stock as of Q3 2025 is also included in our list.
Why do we care about what hedge funds do? The reason is simple: our research has shown that 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).
All the share price data in the article is as per market close on February 4.
10. Manulife Financial Corporation (NYSE:MFC)
Potential Upside: 5.46%
Number of Hedge Fund Holders: 34
On February 2, Jefferies analyst John Aiken raised the firm’s price target on Manulife Financial Corporation (NYSE:MFC) from $39.64 to $42.58 while keeping a Buy rating. The upward-adjusted price target offers an additional 13.5% upside from the current levels.
In addition to Jefferies, Alex Scott, an analyst at Barclays, also raised the firm’s price target on Manulife Financial Corporation (NYSE:MFC) from C$49 to C$52 on January 8. He also kept a Hold rating on the stock. The firm’s revised price target reflects a slight downside of approximately 1% from the current levels. The price target revision was made as part of Barclays broader 2026 sector outlook.
Looking ahead to 2026, the firm said that it is cautiously optimistic about the life insurance sector. It cited steady cash flow generation, solid capital levels, and ongoing industry consolidation which help balance pressures from spread compression and higher technology investment.
Manulife Financial Corporation (NYSE:MFC) offers financial services and products across the United States, Asia, Canada, and internationally. The company operates in the Insurance and Annuity Products, Wealth & Asset Management Businesses, and Corporate & Other segments. It also provides integrated banking products and services.
9. HA Sustainable Infrastructure Capital, Inc. (NYSE:HASI)
Potential Upside: 11.58%
Number of Hedge Fund Holders: 17
RBC Capital analyst Chris Dendrinos reiterated his Buy rating on HA Sustainable Infrastructure Capital, Inc. (NYSE:HASI) with a price target of $39 on January 20. The firm’s price target suggests a further 13% upside from the current levels.
On January 6, HA Sustainable Infrastructure Capital, Inc. (NYSE:HASI) and Sunrun (RUN) announced the completion of an innovative joint venture aimed at accelerating the deployment of residential solar and battery systems. The collaboration is expected to eventually finance more than 300 megawatts of capacity, supporting over 40,000 home power installations across the United States.
As part of the agreement, HA Sustainable Infrastructure Capital, Inc. (NYSE:HASI) will invest up to $500 million over 18 months into the joint venture. HASI’s structured equity investment is intended to monetize a portion of the long-term cash flows generated by Sunrun’s residential energy assets. This structure not only provides a predictable return for HASI but also allows Sunrun to maintain a long-term ownership stake. According to the companies, this approach is anticipated to deliver a more efficient cost of capital, enhancing overall financial efficiency.
HASI’s Chief Revenue and Strategy Officer, Marc Pangburn, said:
“Together, HASI and Sunrun are accelerating the development of essential infrastructure through home-based energy systems that improve grid reliability and address growing power demand.”
HA Sustainable Infrastructure Capital, Inc. (NYSE:HASI) invests in sustainable infrastructure and energy-efficiency markets across the United States. Its portfolio consists of commercial & government receivables, debt securities, equity investments, and real estate. The company invests in Grid-Connected, climate solutions, and Fuels, Transport, and Nature, a range of infrastructure assets.
8. Inter & Co, Inc. (NASDAQ:INTR)
Potential Upside: 12.63%
Number of Hedge Fund Holders: 20
On January 26, Inter & Co, Inc. (NASDAQ:INTR) announced that its board had approved plans to begin winding down the company’s Sponsored Level II Brazilian Depositary Receipts (BDR) program. It also intends to move toward an Unsponsored Level I BDR structure, pending regulatory approvals from B3 and Brazil’s securities regulator, the CVM.
Once the Sponsored Level II BDR program is discontinued, Inter & Co, Inc. (NASDAQ:INTR) also plans to cancel its registration with the CVM as a category A foreign securities issuer. According to the company, this step is designed to simplify its regulatory setup and remove duplicative requirements associated with being listed in multiple jurisdictions.
The above development is relevant for existing shareholders, as under the proposed plan, after the process is formally launched and approved, holders of the company’s Level II BDRs will be given a 30-day period to decide how they want to proceed. Investors can choose to receive Nasdaq-listed Class A shares, sell the underlying shares through a company-facilitated process, or convert their holdings into Unsponsored Level I BDR on a one-for-one basis.
Prior to this announcement, the stock had seen a positive shift in analyst sentiment. On January 22, UBS raised its price target on Inter & Co, Inc. (NASDAQ:INTR) from $10.5 to $11 while reaffirming a Buy rating. The revised price target offers a further 14.46% upside from the current levels.
Inter & Co, Inc. (NASDAQ:INTR) is involved in the insurance brokerage, banking & spending, investments, and inter shop businesses across the United States and Brazil. It provides banking products and services, such as deposits, cards, checking accounts, loans & advances, and other services. The company was incorporated in 1994 and is based in Belo Horizonte, Brazil.
7. Brookfield Asset Management Ltd. (NYSE:BAM)
Potential Upside: 23.48%
Number of Hedge Fund Holders: 29
Brookfield Asset Management Ltd. (NYSE:BAM) announced on February 2 an agreement to acquire real estate investment trust Peakstone Realty Trust (PKST). This is an all-cash transaction and valued at $1.2 billion, or $21 per share. As per the statement, the deal is anticipated to close by the end of the second quarter of 2026.
The acquisition includes a 30-day go-shop period, allowing Peakstone the opportunity to explore alternative offers. Peakstone also announced that it plans to release its full-year 2025 and fourth-quarter financial results at the end of February. These results are expected to provide additional clarity on the company’s performance and financial position ahead of the acquisition’s completion.
Lowell Baron, CEO of Brookfield’s Real Estate business, expressed his thoughts by saying:
“This acquisition is an exciting opportunity to expand Brookfield’s industrial real estate platform with Peakstone’s high-quality and well-diversified portfolio, which will benefit from strong long-term fundamentals for the warehouse and IOS sectors.”
As part of its fourth-quarter preview, TD Cowen lowered its price target on Brookfield Asset Management Ltd. (NYSE:BAM) from $76 to $75 while keeping a Buy rating on January 27. The firm said that recent macroeconomic developments weakened investors’ confidence in a strong recovery in the capital markets in 2026. However, TD Cowen named Brookfield as a defensive stock, indicating it may be better positioned than its peers to navigate the economic uncertainty in the year ahead.
Brookfield Asset Management Ltd. (NYSE:BAM) operates as a private equity firm. The company specializes in acquisitions and growth capital investments. It invests in infrastructure and renewable power & transition sectors, as well as in industrials, infrastructure services & business services. It operates as a subsidiary of Brookfield Corporation.
6. Capital One Financial Corp (NYSE:COF)
Potential Upside: 29.07%
Number of Hedge Fund Holders: 129
On February 04, Divid George of Robert W. Baird reaffirmed his Buy rating on Capital One Financial Corp (NYSE:COF), setting a target price of $270. A day prior to this, the company issued $1.5 billion worth of senior notes due 2032 and $1.5 billion worth of notes due 2037. The company now has $51 billion in debt on its balance sheet.
Other analysts continue to maintain a higher target price for the company. The optimism comes despite the company failing to beat Wall Street expectations on January 22. On the earnings call, Goldman Sachs’ Ryan Nash inquired about the investments the company was making in its own business. Richard Fairbank, the company’s CEO, pointed out the importance of the premium credit card space. He insisted that, since larger financial firms are investing even more heavily in this space, COF is doing so as well. This should help the company stave off competition in the future:
“We, of course, continue as we have for many years, to lean into the premium credit card space. And there is just so much opportunity in building a franchise of heavy spenders. I do want to comment there that it’s very clear that the biggest players in that space are leaning even harder into that. And they’re investing. And so we are doing so as well. I think the flip side of all that investment is it’s gonna be, you know, a higher hill for maybe other competitors to climb, but we’re climbing that hill and seeing a lot of traction.”
Capital One Financial Corp (NYSE:COF) is a financial services holding company that deals in credit cards, commercial, and consumer banking. It operates in the US, UK, and Canada.
5. SoFi Technologies, Inc. (NASDAQ:SOFI)
Potential Upside: 39.86%
Number of Hedge Fund Holders: 44
Despite beating Wall Street estimates in the fourth quarter, SoFi Technologies, Inc. (NASDAQ:SOFI) has seen several price target cuts from analysts following the earnings report. On February 2, Needham analyst Kyle Peterson reduced the firm’s price target on the stock from $36 to $33 while reaffirming a Buy rating.
The adjustment follows the company’s fourth-quarter results that exceeded Wall Street expectations on both earnings and revenue. The analyst highlighted solid performance and sustained growth in the company’s core on-balance-sheet lending business, alongside faster-than-expected scaling of its capital-light loan platform. According to the firm, the management’s ongoing focus on high-margin growth areas within FinTech and capital-light was also cited as a positive.
Moreover, on February 2, TD Cowen also lowered its price target on SoFi Technologies, Inc. (NASDAQ:SOFI) from $25 to $24 while keeping a Hold rating. The firm’s price target reflects an additional 8.7% upside from the current levels. According to the firm, the company’s fourth-quarter earnings beat was supported by a higher take rate and stronger-than-expected loan platform business originations. Additionally, the analyst said that SoFi’s 2026 guidance came in above consensus expectations.
SoFi Technologies, Inc. (NASDAQ:SOFI) provides financial services across Canada, the United States, Hong Kong, and Latin America. The company operates in the Technology Platform, Lending, and Financial Services segments. It provides the SoFi Credit Card, SoFi Relay, SoFi Protect, SoFi Travel, SoFi At Work, Lantern Credit, and others.
4. Ares Management Corporation (NYSE:ARES)
Potential Upside: 41.38%
Number of Hedge Fund Holders: 50
On January 27, Morgan Stanley increased its price target on Ares Management Corporation (NYSE:ARES) from $175 to $178 while maintaining a Hold rating. The firm’s adjusted price target implies a further 42.4% upside from the current levels. This upside is consistent with the median Wall Street analysts’ upside of 41.38% according to 19 analysts covering the stock.
The firm said that the increased deal activity is anticipated to provide meaningful support for alternative asset managers throughout the fourth quarter and into 2026. As part of its fourth-quarter earnings preview, Morgan Stanley analyst Michael Cyprys adjusted the company’s earnings per share estimates upward, increasing them by 4%, bringing them to 1% above consensus among the group. This revision reflects rising confidence in the company’s short-term performance.
In addition to Morgan Stanley, Oppenheimer raised its price target on Ares Management Corporation (NYSE:ARES) during its fourth-quarter earnings preview on January 20. Analyst Chris Kotowski increased the firm’s price target on the stock from $190 to $224 while keeping a Buy rating. The firm said that the adjustment is a part of a broader review of price targets across the alternative asset management sector.
Ares Management Corporation (NYSE:ARES) is an alternative asset manager operating across the United States, Asia, and Europe. The company operates in the Direct Lending Group, Private Equity Group, and Real Estate Group segments. It was incorporated in 1997 and is based in Los Angeles, California.
3. Affirm Holdings, Inc. (NASDAQ:AFRM)
Potential Upside: 55.38%
Number of Hedge Fund Holders: 60
On February 2, Intuit announced that it was adding buy now, pay later (BNPL) options to QuickBooks through a new multi-year partnership with Affirm Holdings, Inc. (NASDAQ:AFRM). The collaboration is designed to provide small businesses with a built-in solution that allows their customers to spread out payments over time. The added functionality is intended to help businesses increase conversions, improve cash flows, and provide customers with more flexible ways to pay at checkout.
In another development, Kyle Peterson of Needham upgraded Affirm Holdings, Inc. (NASDAQ: AFRM) from Hold to Buy after the company filed an application for a limited bank charter on January 27. He assigned a price target of $100 for the shares. The firm’s price target implies a further 69.5% upside from current levels, which exceeds the median Wall Street analyst estimate of 55.38% based on 33 analysts covering the stock.
Peterson pointed out the impact of the bank charter by saying:
“We believe this could be a game-changer for AFRM as it would give AFRM access to deposit funding for loans, reduce third-party risk by moving several products in-house (rather than offering them through banking partners), while also potentially accelerating growth and/or product development.”
The firm said it is increasingly confident in the company’s growth trajectory and profitability over the medium term.
Affirm Holdings, Inc. (NASDAQ:AFRM) operates a payment network across Canada, the United States, and internationally. The company’s platform includes a consumer-focused app, a point-of-sale payment solution for consumers, and merchant commerce solutions. Affirm Holdings, Inc. was incorporated in 2012 and is based in San Francisco, California.
2. Blue Owl Capital Inc (NYSE:OWL)
Potential Upside: 72.79%
Number of Hedge Fund Holders: 35
On February 6, a day after the company announced its quarterly results, Piper Sandler analyst Crispin Love reduced the price target on Blue Owl Capital Inc. (NYSE:OWL) to $15 from $21 while reiterating his Outerperform rating, according to a report from The Fly. While share price performance was weaker across the alternative asset management sector, OWL was a relative outperformer, as per the firm. Although Piper Sandler expects revenue growth estimates to fall below the targets set at the investor day, OWL’s projection still indicates improved margins due to better cost management.
Earlier, on January 20, Piper Sandler reaffirmed its Buy rating on Blue Owl Capital Inc. (NYSE:OWL) with a $21 price target. On the flip side, a few days earlier, on January 26, UBS analysts issued a warning about the company’s lending activities. The firm said that the resulting stress from this activity may pressurize the company’s finances and contribute to similar circumstances seen across the alternative asset management industry.
Amid this pessimism, OWL received a boost on January 22 when Moody’s Ratings upgraded the firm’s long-term issuer and unsecured ratings from Baa3 to Baa2. The rating firm expects OWL to reduce its gross debt-to-equity ratio, which stood at 1.27x as of September 30, 2025. This would increase the company’s asset coverage ratio from 19% to 20%. Whether the company is moving in that direction will be clear from its execution in the coming quarters.
Blue Owl Capital Inc (NYSE:OWL) is a well-known global alternative asset manager with $307.4 billion in assets under management as of December 2025. The company operates in three segments: Private Credit, GP Strategic Capital, and Real Estate. It is headquartered in New York.
1. Robinhood Markets, Inc. (NASDAQ:HOOD)
Potential Upside: 97.91%
Number of Hedge Fund Holders: 77
On February 2, Robinhood Markets, Inc. (NASDAQ:HOOD) announced the launch of a stocks and shares ISA (Individual Savings Account), marking a significant step in its international expansion. The new account offers UK customers a range of attractive features, including no commissions, zero platform fees, low foreign exchange fees, and a 2% cash bonus on contributions made before April 5, 2026. According to the company, the new ISA is designed to make long-term investing cost-effective and more accessible for individual investors.
The company said that ISAs are the most widely used long-term savings vehicle in the UK, yet many investors have historically been discouraged by the complicated transfer process, high fees, and outdated platforms. The newly launched ISA addresses these issues while providing UK customers access to approximately 5,000 US-listed stocks and American Depositary Receipts (ADR).
Dan Dolev, an analyst at Mizuho, called the ISA launch a key positive catalyst for the company. He reaffirmed his Buy rating on Robinhood Markets, Inc. (NASDAQ:HOOD) with the price target of $172, offering a compelling 91% upside from current levels.
The analyst highlighted the positive impact of the ISA by stating:
“We view Robinhood’s ISA launch as a major positive catalyst for HOOD’s international expansion efforts, given the product’s broad popularity and the significant opportunity within Robinhood’s younger demographic (18-34), where ISA usage remains below the national UK average.”
Dan Dolev underscored the size of the total addressable market for Robinhood’s new offering. He said that the market value of adult ISA holdings in the UK is more than $1 trillion in cash and stocks, compared with the company’s assets under custody of approximately $333 billion as of the third quarter of 2025.
Robinhood Markets, Inc. (NASDAQ:HOOD) operates a financial services platform. The company’s platform enables users to invest in exchange-traded funds (ETFs), options, cryptocurrencies, American Depository Receipts (ADRs), stocks, and gold. It also operates and owns a digital currency marketplace.
While we acknowledge the potential of HOOD 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 HOOD and that has 100x upside potential, check out our report about this cheapest AI stock.
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