In this article, we will look at the 10 Best Quality Stocks to Buy Before 2026.
On December 24, Dan Ives, Global Head of Tech Research at Wedbush Securities, appeared on a CNBC International Live interview to discuss his bull case for the tech sector and AI heading into 2026. Ives has called 2026 an inflection point for AI and the tech sector in general. He elaborated that by inflection, he means monetization of AI through software applications and agentic products. He named Palantir, Snowflakes, and MongoDB as some of the few names that have already started showing the application of AI advancements through their software products. Ives added that 2026 is the “prove it moment” of AI and investors, and analysts are mostly underestimating the scale and numbers for 2026. Therefore, he is bullish on the AI trade. He added that the market is still in the 3rd year of the 8-year-long AI bull cycle.
Ives believes that tech stocks will rise at least 20% in 2026, driven by two main factors. Firstly, the underestimation of investors and analysts is going to help the tech companies beat earnings. Secondly, Ives highlighted that only 3% of the US companies have started to take on AI. As more companies take on AI, the demand will continue to rise, thereby helping AI companies to show earnings and return on investment in their balance sheets.
Stocks
Our Methodology
To compile the list of 10 Best Quality Stocks to Buy Before 2026, we reviewed ETFs including iShares MSCI USA Quality Factor ETF, Invesco S&P 500 Quality ETF, and JPMorgan U.S. Quality Factor ETF. Using these ETFs, we aggregated a list of quality stocks for which analysts expect more than 25% upside in the next 12 months. Next, we cross-checked the upside potential from CNN and ranked the stocks in ascending order of the number of hedge fund holders sourced from Insider Monkey’s Q3 2025 database. Please note that the data was recorded on December 24, 2025.
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).
10 Best Quality Stocks to Buy Before 2026
10. Marvell Technology, Inc. (NASDAQ:MRVL)
Analyst Upside Potential: 36.86%
Number of Hedge Fund Holders: 77
Marvell Technology, Inc. (NASDAQ:MRVL) is one of the Best Quality Stocks to Buy Before 2026. On December 17, Moody’s Ratings upgraded the company’s senior unsecured ratings to Baa2 from Baa3 and maintained a stable outlook.
The rating firm noted that Marvell Technology, Inc. (NASDAQ:MRVL) has built a portfolio of technologies that enable accelerated computing and high-speed networking in data centers. The firm added that the upgrade to Baa2 is based on the expectations that the company’s credit profile will continue to improve, driven by improved profitability. Moreover, Moody’s also expects the company to grow its revenue by more than 20% and reach $10 billion by fiscal 2027. This demand is expected to be driven by a demand recovery in carrier infrastructure and enterprise networking segments.
That said, on December 10, Stifel had reiterated a Buy rating on Marvell Technology, Inc. (NASDAQ:MRVL) with a $114 price target. The firm noted the company to be one of the only vendors offering a comprehensive and vertically integrated stack for modern AI systems. Stifel believes that the company’s portfolio positions it uniquely as it provides end-to-end connectivity solutions that span every layer of data-center technology.
Marvell Technology, Inc. (NASDAQ:MRVL) engages in the development and production of semiconductors, focusing heavily on data centers.
9. NIKE, Inc. (NYSE:NKE)
Analyst Upside Potential: 30.80%
Number of Hedge Fund Holders: 89
NIKE, Inc. (NYSE:NKE) is one of the Best Quality Stocks to Buy Before 2026. The share price of NIKE, Inc. (NYSE:NKE) has fallen more than 10.8% since the release of its fiscal Q2 2026 earnings on December 18. As a result, Wall Street adjusted its price targets accordingly. However, the general analyst consensus remains positive with the 12 month average price target reflecting more than 31% upside from the current level.
The decline in share price came despite the company beating expectations. During the quarter, NIKE, Inc. (NYSE:NKE) grew its revenue by 0.59% year-over-year to $12.43 billion, surpassing estimates by $218.31 million. The EPS of $0.53 also topped expectations by $0.16. The falling investor sentiment was mainly due to the company’s gross profit margins that declined by 300 basis points and a 17% decline in China Sales. On the bright side, the wholesale revenue in North America increased 20%, indicating that management has made progress in repairing its relationship with retail partners.
Following the release, on December 19, Paul Lejuez from Citi reiterated a Hold rating on NIKE, Inc. (NYSE:NKE) and lowered the price target from $70 to $65. On the same day, Jay Sole from UBS also reiterated a Hold rating on the stock and lowered the price target from $71 to $65.
Analyst Sole of UBS noted that the second quarter results depict that the company’s turnaround is taking longer than expected. He added that this suggests that the company might need more time to resize its inventory. Sole noted that despite the falling investor sentiment, NIKE, Inc. (NYSE:NKE) is expected to return to mid-single-digit percentage sales growth and approximately 10% EBIT margin over the long term.
NIKE, Inc. (NYSE:NKE) designs, markets, and distributes athletic footwear, apparel, equipment, and accessories for sports and fitness activities worldwide.
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