In this article, we will discuss: 10 Best Under-the-Radar Stocks to Invest In.
On July 6, Reuters reported that Morgan Stanley said weakening US semiconductor shares anticipated a broadening market recovery, with investors likely shifting to AI hyperscalers, consumer discretionary, transportation, and biotechnology companies. The brokerage said hyperscalers could benefit as the AI cycle matures. However, investors are still waiting for definitive evidence that AI products can provide enough returns to warrant large infrastructure investments. Morgan Stanley also stated that hyperscalers have already undergone a period of underperformance and may benefit as capital spending becomes more disciplined.
According to Morgan Stanley, Alphabet, Amazon, Meta Platforms, and other hyperscalers experienced strong sales in June. The Philadelphia SE Semiconductor Index climbed by 11%, but the chip index has declined by more than 11% in the last two weeks. The Roundhill Magnificent Seven ETF has recovered some losses. Morgan Stanley also attributed the rotation to lower expectations for Fed rate hikes and falling crude oil prices.
With that said, here are the 10 Best Under-the-Radar Stocks to Invest In.
Methodology:
We compiled a list of some lesser-known companies with strong fundamentals and limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. We then identified those with the highest number of hedge fund holders, which we assessed using Insider Monkey’s database of hedge funds as of Q1 2026. The stocks are ranked in ascending order of the number of hedge fund holders.
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. Insider Monkey’s quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
10. MaxLinear, Inc. (NASDAQ:MXL)
Number of Hedge Fund Holders: 27
MaxLinear, Inc. (NASDAQ:MXL) is among the best under-the-radar stocks.
On June 29, Stifel raised its price target on MaxLinear, Inc. (NASDAQ:MXL) to $110 from $105. The firm maintained a “Buy” rating on the shares after meeting with the company’s management, including its CEO and CFO. Analyst Tore Svanberg said management outlined a strategy centered on growing MaxLinear’s data center portfolio. The firm reaffirmed its long-term objective of building a $3 billion infrastructure business.
On June 3, MaxLinear, Inc. (NASDAQ:MXL) and Los Alamos National Laboratory announced a collaboration to develop “hardware-accelerated” OpenZFS storage for high-performance computing environments.
Senior Director for Computing Technologies at the laboratory, Gary Grider, said the collaboration showed hardware-offloaded ZFS operations, delivering approximately 39 times faster write speeds and 7 times faster read speeds.
Vikas Choudhary, MaxLinear’s Executive Vice President of Connectivity and Storage, said the Panther Storage Accelerators provide hardware-accelerated data compression, protection, and scalable storage. It also preserves ZFS data integrity.
MaxLinear, Inc. (NASDAQ:MXL) works in the provision of communications systems-on-chip solutions used in broadband, mobile, and wireline infrastructure, data center, and industrial and multi-market applications.
9. Intuitive Machines, Inc. (NASDAQ:LUNR)
Number of Hedge Fund Holders: 30
On July 1, Craig Hallum said NASA’s lunar lander awards largely matched expectations. The firm noted Intuitive Machines, Inc. (NASDAQ:LUNR) received a $148 million contract. Firefly Aerospace and Astrobotic secured $144 million and $298 million, respectively. The firm said Intuitive Machines and Firefly landed awards consistent with expectations, while Astrobotic exceeded them.
Craig Hallum also praised NASA Administrator Isaacman for maintaining a steady movement of commercial-focused awards. The firm reiterated its “Buy” rating with a $42 price target on Intuitive Machines, Inc. (NASDAQ:LUNR).
On June 24, B. Riley called Intuitive Machines, Inc. (NASDAQ:LUNR) stock’s recent 55% pullback from its May 28 peak a buying opportunity. Analyst Mike Crawford said the company is building a complete space and lunar infrastructure platform. The analyst noted its $1.1 billion backlog and multiple near-term catalysts that could expand it. The firm maintained its Buy rating and $45 price target on the shares.
Intuitive Machines, Inc. (NASDAQ:LUNR) is a space exploration, infrastructure, and services company. It contributes to the establishment of cislunar infrastructure and helps develop cislunar and deep-space commerce.
8. Redwire Corporation (NYSE:RDW)
Number of Hedge Fund Holders: 32
Redwire Corporation (NYSE:RDW) is among the best under-the-radar stocks.
On June 30, Redwire Corporation (NYSE:RDW) announced it won a contract from a subsidiary of SemiLux International, Taiwan Color Optics, to supply its Penguin Mk2.5 VTOL Uncrewed Aerial System to the Taiwan Coast Guard. The deal is to help maritime security and defense planning.
Co-President and Chief Growth Officer of Redwire Defense Tech, Josh Stinson, said the aircraft has shown its capability in all-weather intelligence and reconnaissance missions while strengthening coastal monitoring.
On June 4, Redwire Corporation (NYSE:RDW) also secured a contract from Astrobiome Space to launch the inaugural mission of its commercial Greenhouse system aboard the International Space Station. The firm said the mission will grow wild strawberries using Astrobiome’s proprietary soil improvement product and advance space agriculture research.
Marc Dielissen, Executive Vice President of Redwire Europe, said the platform supports sustainable life support technologies and fresh food production for future long-duration space missions.
Redwire Corporation (NYSE:RDW) develops and provides space and defense technologies and mission-critical solutions for government, commercial, and civil customers.
7. Tempus AI, Inc. (NASDAQ:TEM)
Number of Hedge Fund Holders: 33
On July 1, Freedom Capital initiated coverage of Tempus AI, Inc. (NASDAQ:TEM) with a Hold rating. The firm gave a $59 price target on the shares. In an investor note, the firm noted that healthcare AI remains one of the fastest-growing technology segments. Most generative AI spending continues to flow to startups rather than established healthcare IT companies. Analyst Gene Mannheimer said Tempus has built one of the largest proprietary oncology data platforms, making it closer to the “AI as physician” thesis than any publicly traded healthcare technology company. However, he believes the valuation is appropriate at current levels.
On June 25, Tempus AI, Inc. (NASDAQ:TEM) announced a research collaboration with Angiosarcoma Awareness to advance fact-based research into angiosarcoma. The corporation said the effort will combine its analytical capabilities with approximately 600 de-identified angiosarcoma records containing paired DNA and RNA sequencing data. It will create one of the largest known disease-specific molecular datasets for the rare cancer.
Tempus AI, Inc. (NASDAQ:TEM) is a healthcare technology business. It combines artificial intelligence and machine learning with healthcare. It focuses on establishing platforms for cancer, neuropsychiatry, cardiology, infectious illness, and radiology.
6. Pagaya Technologies Ltd. (NASDAQ:PGY)
Number of Hedge Fund Holders: 33
Pagaya Technologies Ltd. (NASDAQ:PGY) is among the best under-the-radar stocks.
On June 11, Texas Capital initiated coverage of Pagaya Technologies Ltd. (NASDAQ:PGY) with a Buy rating. The firm gave a $27 price target on the stock. Texas Capital described the company as an AI-enabled provider of consumer credit underwriting and capital markets solutions. The firm said Pagaya’s services-based business model has a more favorable risk and reward profile for investors and rating agencies, and that the shares appear attractive at current levels.
Days earlier, on June 8, Pagaya Technologies Ltd. (NASDAQ:PGY) expanded its partnership with Upgrade. It extended its artificial intelligence-powered credit decisioning technology to Flex Pay, Upgrade’s buy now, pay later offering.
Pagaya President Sanjiv Das said the expansion of the deal deepens the companies’ relationship beyond personal loans and broadens Pagaya’s network into asset classes. He commented that the move helps Flex Pay’s growth and advances the corporation’s strategy of expanding its point of sale business toward more “purpose-driven” transactions.
Pagaya Technologies Ltd. (NASDAQ:PGY) develops AI and data networks for the financial industry. Its product uses data science, machine learning, and AI technology to evaluate customers’ applications in real time.
While we acknowledge the potential of PGY 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 PGY and that has 100x upside potential, check out our report about the cheapest AI stock.
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