In this article, we will discuss the 10 Best Mid Cap Stocks to Buy with Highest Upside Potential.
On May 16, Alex Guiliano, CIO of Resonate Wealth Partners, joined BNN Bloomberg to discuss the economic landscape and portfolio strategies following the confirmation of Kevin Warsh as the new US Fed Chair. Warsh faces a complex environment characterized by a softening job market and elevated, noisy inflation data, which provide little justification for rate cuts. Additionally, he must navigate market expectations amid the ongoing conflict with Iran and pressure from Donald Trump, who has long advocated for rate reductions, all while maintaining the fine balance required ahead of the upcoming midterm elections.
With US markets having reached new highs but experiencing recent declines, including a significant drop in US futures, market sentiment appears volatile and uncertain. Guiliano noted that sentiment can shift rapidly, advising investors to build stock portfolios centered on quality, defined as companies with strong cash flows and durable profits capable of withstanding various economic environments. Specifically, he recommends focusing on the US financial and healthcare sectors, along with select big tech companies that possess clearly defined AI strategies rather than those merely chasing a narrative. He warned investors to avoid companies riding the AI wave without a solid, clear strategy, citing recent pullbacks in SaaS stocks as an example, and urged them to focus on true quality over market narratives.
Regarding concerns over an AI bubble, Guiliano argued that investors should view the current climate as a structural investment boom rather than trying to time a bubble. He emphasized investing over speculating, suggesting investors look for companies with the financial strength to lead in AI, but which also have the ability to pivot if investments do not perform as expected or if the boom cycle slows. Companies with diversified profit centers outside of AI are particularly well-positioned to withstand potential pullbacks in that sector.
Our Methodology
We used screeners to identify mid-cap stocks with market caps between $2 billion and $10 billion with an average upside potential of at least 30%, and limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. These stocks are also popular among elite hedge funds and are ranked in ascending order of their upside potential.
Note: All data was sourced on May 25.
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 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
10 Best Mid Cap Stocks to Buy with Highest Upside Potential
10. New Oriental Education & Technology Group Inc. (NYSE:EDU)
Average Upside Potential: 55.50%
New Oriental Education & Technology Group Inc. (NYSE:EDU) is one of the best mid cap stocks to buy with highest upside potential. On April 22, New Oriental Education & Technology Group reported strong financial results for FQ3 2026. Total net revenues grew by 19.8% year-over-year to $1.417 billion, while net income attributable to the company rose by 45.3% to $126.8 million. Operating income also saw a significant increase of 44.8%, reaching $180.3 million.
Growth was driven by the expansion of new educational initiatives, including non-academic tutoring and intelligent learning systems, alongside steady performance in domestic and overseas test preparation. Leadership emphasized a focus on operational efficiency, AI integration across the education ecosystem, and the continued development of the East Buy platform. These efforts, combined with cost structure optimizations, resulted in an improved non-GAAP operating margin of 14.3%.
Regarding shareholder returns, the board of directors approved the second installment of a dividend for FY2026, amounting to $0.06 per common share or $0.6 per ADS, payable in June. Additionally, the company continued its share repurchase program, having bought back approximately $184.3 million worth of ADSs as of April 21, out of the authorized $300 million total.
New Oriental Education & Technology Group Inc. is a Beijing-based provider of private educational services. Founded in 1993, the company operates through four segments, including Educational Services and Test Preparation Courses, and Overseas Study Consulting Services.
9. IAMGOLD Corporation (NYSE:IAG)
Average Upside Potential: 57.69%
IAMGOLD Corporation (NYSE:IAG) is one of the best mid cap stocks to buy with highest upside potential. On May 5, IAMGOLD reported a strong start to 2026, with Q1 attributable gold production of 183,600 ounces, keeping the company on track for its full-year guidance of 720,000 to 820,000 ounces. Financial performance was robust, highlighted by revenues exceeding $1 billion, an adjusted EBITDA of $666.3 million, and mine-site free cash flow of $524.6 million. These results were supported by an average realized gold price of $4,859 per ounce.
Operations at Côté Gold saw throughput limits due to conveyor maintenance, but performance is expected to improve progressively throughout the year as debottlenecking continues. Meanwhile, Westwood and Essakane delivered year-over-year production increases. The company remains focused on growth catalysts, including updated mineral resource estimates and technical reports for several assets, alongside continued investments in operational optimization and infrastructure.
The company used its strong free cash flow to strengthen its balance sheet and reward shareholders. During Q1, IAMGOLD Corporation repaid $100 million in debt and purchased $260 million worth of shares through its buyback program. With $1.1 billion in available liquidity as of March 31, the company is well-positioned to continue its share repurchase initiatives and maintain a disciplined approach to debt reduction for the remainder of the year.
IAMGOLD Corporation is a mining company engaged in the exploration, development, and production of gold. Its operations include producing assets such as the Essakane mine in Burkina Faso and the Westwood mine in Canada.
8. Praxis Precision Medicines Inc. (NASDAQ:PRAX)
Average Upside Potential: 61.25%
Praxis Precision Medicines Inc. (NASDAQ:PRAX) is one of the best mid cap stocks to buy with highest upside potential. On May 7, Praxis Precision Medicines reported progress in its clinical pipeline and regulatory milestones during Q1 2026. The FDA has accepted NDAs for two of its lead candidates: ulixacaltamide for essential tremor, with a target action date of January 29, 2027, and relutrigine for SCN2A and SCN8A developmental and epileptic encephalopathies/DEEs, with a priority review target date of September 27.
Clinical developments remain a key driver, highlighted by the EMBRAVE Part A study results for elsunersen, which showed a 77% placebo-adjusted reduction in monthly seizures and broad improvements in patients with early-seizure onset SCN2A-DEE. Looking ahead, the company anticipates topline results from the POWER1 study of vormatrigine in focal onset seizures during Q2 2026, followed by the EMERALD study readout for relutrigine in Q4.
Financially, Praxis Precision Medicines Inc. is well-capitalized to support these upcoming milestones. As of March 31, the company held approximately $1.4 billion in cash and investments, an increase driven by a follow-on public offering in January. This balance provides a cash runway extending into 2028, even as the company ramps up R&D expenditures and scales its commercial infrastructure to prepare for potential product launches later this year and into 2027.
Praxis Precision Medicines Inc. is a clinical-stage biopharmaceutical company engaging in the development of therapies for central nervous system disorders characterized by neuronal excitation-inhibition imbalance.
7. GDS Holdings Limited (NASDAQ:GDS)
Average Upside Potential: 65.24%
GDS Holdings Limited (NASDAQ:GDS) is one of the best mid cap stocks to buy with highest upside potential. On May 20, GDS Holdings reported a strong start to 2026, highlighted by record-breaking sales performance. The company achieved net new bookings of ~200MW during Q1, the highest for a single quarter to date, driven by intensifying demand for AI infrastructure. Net revenue increased 23.6% year-over-year to RMB3.37 billion, with net income rising significantly to RMB2.65 billion, supported by a dilution gain from its investment in DayOne Data Centers.
Operational growth remained steady as the company expanded its footprint and capacity. Total area committed increased by 11.7% year-over-year to 725,485 sqm, while the utilization rate for area in service reached 77.3%. Management emphasized that the company is uniquely positioned to capture the next phase of growth in the AI sector, while maintaining financial flexibility through strategic capital initiatives such as the sale of DayOne shares and private placements of convertible preferred shares.
The company concluded the quarter with a solid financial position, reporting RMB14.8 billion in cash and cash equivalents. Adjusted EBITDA grew 47.2% year-over-year to RMB1,948.7 million, reflecting continued operational efficiency and corporate-level cost savings. Moving forward, GDS remains focused on core business expansion and disciplined capital management to drive sustainable, long-term value for its stakeholders.
GDS Holdings Limited is an operator and developer of data centers. The company is operating in the People’s Republic of China. It provides colocation, consulting, managed hosting, managed cloud, and server middleware services.
6. ImmunityBio Inc. (NASDAQ:IBRX)
Average Upside Potential: 66.20%
ImmunityBio Inc. (NASDAQ:IBRX) is one of the best mid cap stocks to buy with highest upside potential. On May 22, ImmunityBio recently presented a health economic analysis at ISPOR 2026 demonstrating that ANKTIVA combined with BCG provides superior economic value compared to TAR-200 for patients with BCG-unresponsive non-muscle-invasive bladder cancer/NMIBC. Using a cost-consequence model based on clinical data from the QUILT-3.032 and SunRISe-1 trials, the study focused on the US Medicare population and assessed metrics such as the cost of treatment acquisition, healthcare resource utilization, and radical cystectomy.
The analysis highlighted significant cost savings for ANKTIVA plus BCG across multiple clinical benchmarks. Specifically, the regimen showed a lower cost per complete responder and per cystectomy avoided over three years. These savings were primarily attributed to lower drug acquisition and administration costs, supported by a higher observed complete response rate of 49.6% compared to 45.9% for the TAR-200 cohort.
Company leadership noted that these findings underscore the potential of ANKTIVA to deliver durable cancer responses while simultaneously reducing the financial burden on the healthcare system. By aligning clinical innovation with economic efficiency, the study aims to support broader accessibility for patients facing limited bladder-sparing treatment options for BCG-unresponsive NMIBC.
ImmunityBio Inc. is a commercial-stage biotechnology company that develops next-generation therapies driving immunogenic mechanisms for defeating cancers and infectious diseases.
5. VinFast Auto Ltd. (NASDAQ:VFS)
Average Upside Potential: 68.07%
VinFast Auto Ltd. (NASDAQ:VFS) is one of the best mid cap stocks to buy with highest upside potential. On May 21, VinFast unveiled its new-generation VF 8, a D-segment electric SUV featuring significant upgrades to its design, technology, and performance. Built on a “Tech Fluid” design philosophy, the updated model prioritizes aerodynamic efficiency and modern aesthetics, while the interior offers an ergonomic cabin layout featuring a 12.9-inch infotainment display, climate control, and a virtual assistant that supports multiple Vietnamese dialects.
The vehicle’s driving dynamics are enhanced by a new chassis platform with Frequency Selective Dampers/FSD and a Software Defined Vehicle/SDV architecture managed by a Central Vehicle Computer for more responsive performance. It is powered by a 170 kW motor and a 60.13 kWh battery, achieving a range of up to 500 km (NEDC standards) and supporting fast charging from 10% to 70% in under 30 minutes. The model also introduces a patented Integrated Thermal Management system to optimize battery and motor efficiency.
Safety remains a priority, with the new VF 8 equipped with an advanced suite of driver assistance features, including adaptive cruise control and a 360-degree camera system, targeting a 5-star ASEAN NCAP safety rating. Pre-orders in Vietnam open on May 27, at a price of VND 999 million, with the first deliveries scheduled for late July. The vehicle is backed by a seven-year or 160,000 km warranty for the car and an eight-year or 160,000 km warranty for the battery.
VinFast Auto Ltd. designs and manufactures electric vehicles. It offers electric scooters (e-scooters) and electric buses (e-buses). It provides an e-mobility ecosystem built around customers, community, and connectivity alongside new vehicle roll-out.
4. AeroVironment Inc. (NASDAQ:AVAV)
Average Upside Potential: 70.75%
AeroVironment Inc. (NASDAQ:AVAV) is one of the best mid cap stocks to buy with highest upside potential. On May 12, AeroVironment was awarded a three-year, $43 million contract by the Department of War’s (DoW) Test Resource Management Center/TRMC to integrate its PANTHER phased array antenna system onto SkyRange platforms. This initiative modernizes the nation’s weapons testing infrastructure by providing a mobile, rapidly deployable solution capable of tracking multiple targets simultaneously.
The PANTHER antenna features an all-digital, modular framework that supports autonomous operation and remote control. By using high-altitude, long-endurance unmanned aircraft under the SkyRange initiative, the system creates a flexible, airborne telemetry solution. This program also focuses on workforce development through a new certification program with Bismarck State College to train technicians for PANTHER maintenance.
AeroVironment Inc.’s (NASDAQ:AVAV) leadership emphasized that this contract supports national security by reducing technical risks and development costs. As the company continues to integrate PANTHER onto aerial platforms at GrandSKY in North Dakota, the project is expected to accelerate weapons development cycles and help the military address evolving global security threats.
AeroVironment Inc. designs and manufactures unmanned aerial vehicles, ground robotic systems, and loitering munitions.
3. Karman Holdings Inc. (NYSE:KRMN)
Average Upside Potential: 87.21%
Karman Holdings Inc. (NYSE:KRMN) is one of the best mid cap stocks to buy with highest upside potential. On May 12, Karman Space & Defense secured contingent demand commitments from 4 major customers, representing a total potential value of over $1 billion across the next 4 to 7 years. These written expressions of intent cover critical components for space and defense programs, including several priority weapon systems identified by the Munitions Acceleration Council. The commitments are expected to convert into firm contracts once Karman’s customers receive funded orders from their own end clients.
Company leadership noted that these commitments provide clearer visibility into future demand, allowing Karman to proactively invest in production capacity. The requirements align with the US Department of War’s mission priorities, specifically focusing on space launch support and the production of high-demand munitions like the THAAD, PAC-3, Tomahawk, GMLRS, and PrSM systems.
CEO Jon Rambeau emphasized that these agreements position the company for sustained, multi-year growth. He noted that these commitments represent only a portion of the total demand the company anticipates, reinforcing Karman’s role in supporting both established and emerging space launch providers through advanced propulsion, aerodynamic, and payload solutions.
Karman Holdings Inc. is an aerospace & defense company that deals in mission-critical systems in the US. The company supplies products for hypersonic systems, strategic missile defense, tactical & integrated defense, and space & launch markets.
2. Futu Holdings Limited (NASDAQ:FUTU)
Average Upside Potential: 105.45%
Futu Holdings Limited (NASDAQ:FUTU) is one of the best mid cap stocks to buy with highest upside potential. On May 25, Goldman Sachs analyst Shuo Yang has downgraded Futu Holdings from Buy to Neutral, significantly lowering the price target from $210.47 to $102.13. The revision is primarily driven by heightened regulatory uncertainty surrounding the company, specifically following the announcement of fines and the required remediation of non-compliant client accounts in mainland China.
The firm also lowered its financial estimates to account for mounting operational challenges. The analyst noted that Futu is grappling with rising client acquisition costs in new markets, compounded by a decline in new assets under management, signaling potential headwinds for the company’s near-term growth.
Furthermore, on May 22, Futu Holdings announced that it repurchased approximately $160 million worth of its American depositary shares/ADSs as of May 23, pursuant to the share repurchase program originally initiated on November 18, 2025. The company indicated that it may continue to conduct further repurchases under this program, depending on prevailing market conditions.
Futu Holdings Limited is a Hong Kong‑based fintech company offering fully digital brokerage, wealth management, and investing services via its Futubull and moomoo platforms, including trading, market data, financing, and global asset access to individual and institutional investors.
1. Vaxcyte Inc. (NASDAQ:PCVX)
Average Upside Potential: 132.56%
Vaxcyte Inc. (NASDAQ:PCVX) is one of the best mid cap stocks to buy with highest upside potential. On May 6, Vaxcyte achieved a significant milestone by completing enrollment for its three Phase 3 adult clinical trials (OPUS-1, OPUS-2, and OPUS-3) evaluating VAX-31 for the prevention of invasive pneumococcal disease. The OPUS-1 study serves as a pivotal head-to-head comparison against current standards of care, PCV20 and PCV21, with topline results expected in Q4 2026. Results for the remaining two studies are anticipated in H1 2027.
The company also reported progress in its broader vaccine pipeline and pediatric programs. Enrollment is finished for the VAX-31 infant Phase 2 dose-finding study, with data expected by the end of the first half of 2027. Additionally, Vaxcyte plans to initiate a Phase 1 adult clinical study for VAX-A1, its candidate for Group A Strep prevention, in mid-2026.
Financially, Vaxcyte Inc. remains in a strong position, reporting approximately $2.7 billion in cash and investments as of March 31. This balance, bolstered by a February equity offering, provides the necessary capital to advance its clinical trials, manufacturing capabilities, and commercial readiness. Management emphasized that these resources support the company’s objective to establish VAX-31 as a best-in-class pneumococcal vaccine.
Vaxcyte Inc. engages in the development of vaccines for infectious diseases, focusing on conjugate vaccines and protein-based vaccines developed through a platform for cell-free protein synthesis technology.
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