In this article, we will examine the 10 Best Mid Cap Stocks to Buy According to Hedge Funds.
The US stock market is in transition. According to Franklin Templeton’s analysis of the first half of the year, US President Donald Trump has spent much of the first half of the year revamping his “America First” approach. Trump’s administration has enhanced (or initiated new) subsidies and incentives to prop up domestic manufacturing. Typically, Franklin Templeton’s Dina Ting stated, midcap stocks tend to benefit from domestic competitiveness because they obtain a huge chunk of their income from Americans. As such, she added, Trump’s pro-growth policies present the midcaps as an “attractive growth opportunity.” Ting noted that the attractiveness of US midcaps is likely to rotate investors away from large cap names. She wrote: “As institutional and retail investors have crowded into the largest names, we believe the middle tier of the market has become increasingly overlooked.”
Historically, mid-sized stocks have offered better returns. Franklin Templeton’s analysis shows that between June 2000 and June 2025, the S&P Mid-Cap 400 Index has posted an annualized return of roughly 9.27%. This return outpaces both large-cap (7.96%) and small-cap (8.98%) indices over the same period. Yet, in much of this year, midcaps have trailed large-cap benchmarks – for instance, the S&P 500 is up 13.71% year to date as of November 17, compared to a paltry 1.02% for the S&P Mid-Cap 400. This divergence, the analysis concludes, should raise interest from active allocators.
In addition to the growth opportunities, hedge funds appear to be rotating away from large caps, as shown by a Reuters analysis published on November 15. The analysis notes that several major hedge funds reduced exposure to mega cap stocks in Q3 2025. For example, Bridgewater Associates trimmed its stake in two Magnificent Seven stocks by more than 50%. At the same time, the firm increased exposure to several mid cap names.
That said, this article explores a few mid cap names that hedge funds are accumulating.
Our Methodology
To create the list of the 10 Best Mid Cap Stocks to Buy According to Hedge Funds, we used the Finviz Stock Screener, CNN, and WSJ to identify a broad selection of US-listed mid cap companies. We defined a midcap company as one with a market capitalization between $2 billion and $10 billion. Next, we used analyst upside data to refine the selection and then used hedge fund data from Insider Monkey’s Q2 2025 database to rank the stocks. The list is presented in ascending order of the stock upside potential.
Why are we interested in the stocks that hedge funds pile into? 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).
Note: Market cap and analyst upside data are as of November 18, 2025.
Best Mid Cap Stocks to Buy According to Hedge Funds
10. Denison Mines Corp. (NYSE:DNN)
Number of Hedge Fund Holders: 27
Market Cap: $2.14 billion
Stock Upside Potential: 34.45%
Denison Mines Corp (NYSE:DNN) is one of the best mid cap stocks to buy according to hedge funds. On November 11, Roth MKM analyst Joseph Reagor reiterated a Buy rating on Denison Mines Corp (NYSE:DNN) and set a $3 price target. This came after the company declared third-quarter results on November 6, which showed progress in uranium production.
The company has continued to affirm its position as one of the biggest uranium producers. In the third quarter, it achieved 2,000 tons of high-grade ore, and over 85,000 lbs U3O8 were produced from the mill. The company has also entered the final stage of a multi-year permitting process at its flagship Wheeler property. Denison Mine had $720 million in total cash investments and uranium holdings as of the end of the third quarter. The company’s balance sheet also received a boost on the completion of a $345 million convertible senior notes offering.
Denison CEO David Cates said the company’s long-term commitment to advancing Wheeler River through difficult uranium markets has positioned it to develop the first new large-scale uranium mine in the Athabasca Basin in nearly 20 years, just as near- and long-term uranium fundamentals show sustained improvement.
Denison Mines Corp. (NYSE:DNN) is a uranium exploration, development, and mining company, primarily focused on projects in the Athabasca Basin of northern Saskatchewan, Canada. It operates uranium mines, explores for new deposits, and manages closed mine sites.
9. GitLab Inc. (NASDAQ:GTLB)
Number of Hedge Fund Holders: 47
Market Cap: $7.38 billion
Stock Upside Potential: 34.66%
GitLab Inc. (NASDAQ:GTLB) is one of the best mid cap stocks to buy according to hedge funds. On November 18, Guggenheim maintained its Buy rating and $70 target on GitLab (NASDAQ:GTLB) ahead of the company’s Q3 FY2026 results. The firm expects GitLab to report revenue and earnings above consensus, driven by strong subscription and SaaS growth, with a 26% increase versus the 22% forecasted.
Guggenheim highlighted the company’s accelerating paid seat growth, CEO Bill Staples’ emphasis on customer acquisition and platform improvements, and potential upside from initiatives like the Duo Agent Platform. Despite some short-term softness in SMBs and slight disruptions, Guggenheim sees GitLab as an undervalued high-growth opportunity, with a solid 20%+ free cash flow margin and a 32% SaaS growth projection for FY2027.
Earlier on November 10, Piper Sandler restated its Overweight rating on GitLab Inc. (NASDAQ:GTLB) and kept the price target at $70 ahead of the company’s third-quarter earnings report, scheduled for December 8.
Piper Sandler said GitLab’s growth is accelerating. They also highlighted the company’s cautious guidance after the previous quarter as a positive sign for upcoming results. The analysts reported that developer activity is robust, based on trends seen at other infrastructure companies, and expect this momentum will help GitLab perform well in the third quarter. The firm’s tracking shows an increase in downloads of integrated developer tools during the quarter. Overall, they expect GitLab to “beat current market expectations and modestly raise forward guidance.” And they recommend buying the stock before the upcoming earnings release to capture possible upside.
GitLab Inc. (NASDAQ:GTLB) is a software development company. It provides a comprehensive, cloud-native DevSecOps platform that enables organizations to manage the entire software development lifecycle from source code management to continuous integration/continuous deployment (CI/CD), security testing, and monitoring.
