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.
8. B2Gold Corp. (NYSE:BTG)
Number of Hedge Fund Holders: 27
Market Cap: $5.33 billion
Stock Upside Potential: 42.46%
B2Gold Corp (NYSE:BTG) is one of the best mid cap stocks to buy according to hedge funds. On November 11, RBC Capital analyst Michael Siperco reiterated a Hold rating on the stock and a $5 price target. The hold stance comes days after B2Gold Corp (NYSE:BTG) delivered impressive third-quarter results driven by increased gold production and higher prices.
The company’s Fekola, Masbate, and Otjikoto mines exceeded their production targets, resulting in a total gold production of 254,369 ounces. Revenue in the quarter surged to $782,948, driven by high gold production, compared to $448,229 for the same quarter last year. The company is on track for its strongest gold production in 2025, with the fourth quarter expected to be the strongest.
Amidst high production, B2Gold bounced back to profitability with a net income of $23,123 in the third quarter, compared to a net loss of $631,032 in the third quarter of last year. It delivered earnings per share of $0.01, an improvement from a loss per share of $0.48 for the same quarter in the prior year.
B2Gold Corp. exited the third quarter in a strong financial and liquidity position, with $367 million in cash and cash equivalents. The board of directors has also approved a quarterly dividend of $0.02 per share, payable on December 15 to shareholders of record as of December 2, 2025.
B2Gold Corp (NYSE:BTG) is a global, low-cost gold miner with three open-pit mines in Mali, Namibia, and the Philippines, plus exploration projects across four continents. Its revenue comes entirely from gold, sold into diverse markets to avoid reliance on a single buyer. Key operations include Fekola, Masbate, Otjikoto, the Goose Project, and other development properties.
7. Clarivate PLC (NYSE:CLVT)
Number of Hedge Fund Holders: 33
Market Cap: $2.22 billion
Stock Upside Potential: 45.02%
Clarivate Plc (NYSE:CLVT) is one of the best mid cap stocks to buy according to hedge funds. On October 30, William Blair analyst Andrew Nicholas reiterated a neutral stance on the stock with a Hold rating, despite Clarivate PLC (NYSE:CLVT) delivering third-quarter results characterized by improved operational and financial performance.
Revenues in the quarter totaled $623.1 million, a slight improvement from $622.2 million reported in the same quarter last year. The increase came behind organic subscription growth of 1.2%, offset by lower organic recurring and transactional revenues. On the other hand, net loss narrowed to $28.3 million or $0.04 a share compared to a net loss of $65.6 million or $0.09 per share for the third quarter of 2024.
Clarivate generated $468.6 million in operating cash flow and $276.1 million in free cash flow for the first nine months of the year. It also returned $150 million to shareholders through the purchase of 34.8 million shares.
Following the impressive third quarter, Clarivate has updated its full-year outlook and now expects revenue to range between $2.42 billion and $2.45 billion, up from its previous guidance of $2.28 billion to $2.40 billion. It expects adjusted diluted EPS to be between $0.60 and $0.70.
Clarivate Plc (NYSE:CLVT) provides transformative intelligence, including enriched data, insights, and workflow solutions to the academia, government, intellectual property, and life sciences sectors. It helps organizations make better decisions and accelerate innovation through services that cover research, intellectual property management, and healthcare intelligence.
6. Coty Inc. (NYSE:COTY)
Number of Hedge Fund Holders: 33
Market Cap: $2.89 billion
Stock Upside Potential: 46.53%
Coty Inc. (NYSE:COTY) is one of the best mid cap stocks to buy according to hedge funds. On November 9, Morgan Stanley analyst Dara Mohsenian maintained a Hold rating on Coty Inc. (NYSE:COTY) with a $4.25 price target, citing mixed financial signals. While first-quarter adjusted EBITDA met expectations, the company faced declining organic sales and margin pressures, alongside challenges from retailer destocking and uneven Consumer Beauty execution.
Cost savings and disciplined spending helped stabilize earnings, but limited visibility and modest sales underperformance led Mohsenian to slightly lower future EBITDA estimates, keeping a cautious stance despite potential for gradual improvement.
Nevertheless, Coty delivered first-quarter fiscal 2026 earnings on November 6, with sales coming close to the favorable end of the prior guidance. The company benefited from strengthening execution in the US, driven by strategic initiatives and market-leading fragrance innovations. Revenue for the quarter was $1.58 billion, a 6% decrease from the same period last year. Net income decreased to $64.6 million from a net income of $79.6 million in the prior year. Adjusted earnings per share declined to $0.12 from $0.15 a share last year.
Coty CEO Sue Nabi said the company is moving faster toward becoming a Prestige beauty brand, focusing on fragrances, cosmetics, and skincare. She added that Coty will invest in its strongest portfolio brands while growing its new licenses and labels.
Coty Inc. (NYSE:COTY) is a global beauty company that develops, manufactures, and markets a wide range of fragrance, color cosmetics, and skin and body care products across both prestige and mass-market brands. It is one of the world’s largest beauty companies.
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.
4. Klaviyo, Inc. (NYSE:KVYO)
Number of Hedge Fund Holders: 41
Market Cap: $8.27 billion
Stock Upside Potential: 57.27%
Klaviyo, Inc. (NYSE:KVYO) is one of the best mid cap stocks to buy according to hedge funds. On November 6, Stifel lowered its price target for Klaviyo, Inc. (NYSE:KVYO) stock from $42 to $40. The firm maintained a Buy rating on the shares and explained that the price target cut was due to Klaviyo’s conservative 2026 outlook. Klaviyo expects its earnings to grow by at least 21-22% and at least one percentage point of margin improvement for 2026.
Stifel noted that Klaviyo’s efforts to expand its platform in areas such as Agents, Service, and Marketing Analytics, are “beginning to bear fruit and have laid the groundwork for multiple years of profitable growth.”
Independently of the analyst action, Klaviyo reported its Q3 2025 results on November 5 in which the quarter’s revenue was about $310.9 million, up 32% year over year. The EPS came in at $0.18, exceeding the consensus estimate of roughly $0.14.
Management reported that the 32% year-over-year revenue growth was supported by continued expansion into mid-market and enterprise customers. International markets contributed meaningfully, with revenue from Europe, the Middle East and Africa (EMEA) and Asia-Pacific (APAC) regions growing about 43% year over year. Management highlighted this as evidence of strengthening international momentum.
Klaviyo, Inc. (NYSE:KVYO) is a cloud-based marketing automation company. It provides software that enables e-commerce businesses to analyze customer data, segment audiences, and deliver personalized email and SMS campaigns.
3. Archer Aviation, Inc. (NYSE:ACHR)
Number of Hedge Fund Holders: 35
Market Cap: $4.96 billion
Stock Upside Potential: 60.32%
Archer Aviation, Inc. (NYSE:ACHR) is one of the best mid cap stocks to buy according to hedge funds. On November 10, Cantor Fitzgerald reaffirmed its Overweight rating and a $13 price target on Archer Aviation, Inc. (NYSE:ACHR). The decision comes after Archer acquired Hawthorne Airport in Los Angeles.
Cantor Fitzgerald highlighted that the new facility will be Archer’s hub for air taxi operations in Los Angeles. And that the move is crucial for the company’s plans to provide exclusive electric air taxi services at the LA 2028 Olympics. The research firm also highlighted Archer’s financial position, noting that the company has roughly $1.7 billion in cash, which brings the total liquidity to about $2.2 billion after the company raised capital on June 12, 2025. This financial position, stated the analysts, gives Archer “the highest liquidity in the industry”.
In a different update, Archer completed an in‑country electric vertical take‑off and landing (eVTOL) flight test campaign for its Midnight aircraft in the United Arab Emirates on November 13. This test is part of the company’s commercial air taxi “Launch Edition” program. The tests were conducted at Al Ain Airport and in the UAE’s desert areas, using the local operating environment to validate the aircraft’s performance in regional conditions.
Archer Aviation, Inc. (NYSE:ACHR) is an electric aviation company. It designs and manufactures eVTOL aircraft intended for urban air mobility. The company’s flagship aircraft, Midnight, is being developed for commercial air taxi operations, supported by partnerships with major players such as United Airlines.
2. Zeta Global Holdings Corp. (NYSE:ZETA)
Number of Hedge Fund Holders: 34
Market Cap: $4.13 billion
Stock Upside Potential: 69.71%
Zeta Global Holdings Corp. (NYSE:ZETA) is one of the best mid cap stocks to buy according to hedge funds. On November 5, DA Davidson reaffirmed its Buy rating on Zeta Global Holdings Corp. (NYSE: ZETA) and kept its $27 price target, pointing to the company’s solid execution during the third quarter of 2025.
A day earlier on November 4, Zeta Global Holdings Corp. delivered strong third-quarter results, which were attributed to its superior artificial intelligence and data capabilities compared to its competitors. Revenue in the quarter was up 26% year-over-year to $337 million, exceeding the midpoint of guidance by $9 million.
The company achieved a record fee cash flow margin of 14% as free cash flow increased 83% to $47 million. During the quarter, the company grew its super-scaled customer count by 25% year over year to $18. The launch of AI conversational super intelligent agent Athena is expected to enhance customer engagement and drive a greater return on investment on Zeta’s platform.
“Our latest launch of Athena by ZetaTM, our AI conversational, superintelligent agent, combined with the momentum coming out of our most successful Zeta Live, and the continued success with One Zeta, reinforces our conviction in Zeta’s leadership and future in the martech landscape,” said David A. Steinberg, Co-Founder, Chairman, and CEO of Zeta.
Likewise, Zeta Global increased its revenue guidance for the fourth quarter to between $363 million and $366 million, representing a $2 million increase from the prior guidance midpoint. It has also increased its adjusted EBITDA to between $89.7 million and $90.5 million. For the full year, it expects revenue to range between $1.273 billion and $1.276 billion, representing an increase of $11 million from the midpoint of the previous guidance.
Zeta Global Holdings Corp. (NYSE:ZETA) is a data-driven marketing technology company that provides an AI-powered marketing cloud to help brands acquire, grow, and retain customers. It utilizes artificial intelligence and an extensive database of consumer data to enable businesses to create personalized, omnichannel experiences for customers and enhance marketing outcomes.
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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