10 Best Mid Cap Stocks to Buy According to Hedge Funds

5. Clearwater Analytics Holdings, Inc. (NYSE:CWAN)

Number of Hedge Fund Holders: 51

Market Cap: $6.78 billion

Upside Potential: 53.56%

Clearwater Analytics Holdings, Inc. (NYSE:CWAN) is one of the best mid cap stocks to buy according to hedge funds. On November 13, DA Davidson kept its Buy rating on Clearwater Analytics Holdings, Inc. (NYSE:CWAN) and maintained a $30 per share price target for the stock. The decision came after reports emerged that Clearwater was the subject of a takeover interest.

According to the analysts, any credible acquisition bid would likely need to be near the $30 per share level for shareholders to consider it. And, to them, a successful takeover deal could value Clearwater between $30 and $34 per share.

In a separate update on the same day, Morgan Stanley’s Michael Infante kept a Buy rating on the company. He also maintained the $27 price target. Infante highlighted that Clearwater had a challenging year due to doubts over a major acquisition and concerns regarding the core business’s growth. Despite these challenges, he noted, Clearwater’s core business grew by about 21% so far this year.

Infante pointed to several factors for optimism in 2026, including the expectation for the core business to keep growing at a high-teens percentage rate. Others are recent big deals that have not yet fully shown up in annual recurring revenue, faster growth contributions from Clearwater’s Enfusion operations, and support for revenue and ARR from lower interest rates, cross-selling initiatives, and strategic partnerships.

Clearwater Analytics Holdings, Inc. (NYSE:CWAN) is a financial technology company. It provides cloud-native software solutions for investment lifecycle management, where it serves insurance companies, asset managers, corporations, and government entities worldwide. Its main products include automated platforms for portfolio accounting, performance measurement, compliance monitoring, and risk reporting.