10 Best Mid Cap Stocks to Buy According to Hedge Funds

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1. Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX)

Number of Hedge Fund Holders: 21

Market Cap: $2.17 billion

Stock Upside Potential: 94.17%

Recursion Pharmaceuticals Inc. (NASDAQ:RXRX) is one of the best mid cap stocks to buy according to hedge funds. On November 1, TD Cowen analyst Brendan Smith touted the progress the company has made in developing its platform, Recursion OS. Consequently, he reiterated a Hold rating on Recursion Pharmaceuticals Inc. (NASDAQ:RXRX) as the company reaffirmed its financial guidance for 2025 and 2026.

As of the third quarter, the company had achieved over $500 million in upfront and milestone payments from partners. The milestone payments underscore the progress made in delivering novel insights and advancing programs. Additionally, the payments position the company among a small group of pre-commercial biotechnology companies that have achieved scale. Recursion CEO Chris Gibson said the company’s cash runway through 2027 supports advancing its AI-enabled platform to drive industry change.

The Hold rating stance at TD Cowen affirms a cautious stance ahead of the leadership transition, with Dr. Najat Khan poised to take over as CEO. Likewise, while the company has delivered solid safety data for REC-617, the candidate drug is still in the early stages of development.

Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX) is a clinical-stage company that uses AI, machine learning, and high-throughput automation to industrialize drug discovery and development. It uses its AI-powered platform, the Recursion OS, to analyze datasets to identify potential drug candidates more efficiently.

While we acknowledge the potential of RXRX 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 RXRX and that has 100x upside potential, check out our report about this cheapest AI stock.

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