On March 8, Bob Elliott, Co-Founder, CEO, and CIO of Unlimited, and Kara Murphy, CIO of Kestra Investment Management, joined ‘Closing Bell Overtime’ on CNBC to talk about the week’s market action. In a discussion on whether stocks or gold were the better choice in the current economic climate, Bob Elliott noted that stocks were facing tough circumstances due to elevated expectations at the start of the year, which had begun to adjust downward. He highlighted concerns about fiscal tightening, tariff volatility, and weaker employment conditions. However, he emphasized that these factors were overshadowed by potential tax policy changes, immigration restrictions, and efforts to curb federal spending, which could impact nominal GDP growth. Kara Murphy was asked about diversification, which is a topic that gained traction after a prolonged period where mega-caps and tech stocks dominated returns. She pointed out that diversification had been undervalued for two years but was now proving its worth as bonds and international funds outperformed US stocks. Murphy suggested that a diversified portfolio was essential for navigating the market, as it was no longer reliant on just a few high-performing stocks.
The conversation then turned to the push-and-pull between monetary and fiscal policies. Elliott discussed the volatility caused by rapid changes in policy, such as tariffs, which made it difficult for investors to have high conviction in any direction. This volatility was forcing professional money managers to reduce risk, which led to a decrease in long positions in leveraged investments and a reduction in short interest positions. Elliott highlighted the challenge of finding incremental buyers for risk assets in such an uncertain environment. Murphy reflected on the market’s valuation at the start of the year, and noted that while valuations were high, they alone were not a reliable timing indicator for market corrections. She emphasized that earnings momentum would be crucial in the second half of the year, with a potential shift in relative strength from the MAG7 stocks to other parts of the market. Murphy cautioned that high expectations meant companies needed to continue meeting those expectations to sustain market performance.
As the discussion underscored the complexities and uncertainties of the current market environment, it emphasized the importance of diversification in investment strategies. With that being said, we’re here with a list of the 10 best upside stocks to buy right now.
Methodology
We first sifted through stock screeners, online rankings, and internet lists to compile a list of the best stocks with analysts’ upside potentials over 50%, as of March 10. We then selected the 10 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10 Best Upside Stocks To Buy Right Now
10. Delta Air Lines Inc. (NYSE:DAL)
Upside Potential as of March 10: 52.03%
Number of Hedge Fund Holders: 84
Delta Air Lines Inc. (NYSE:DAL) is a global leader in air transportation. It operates a network of domestic and international hubs and offers passenger and cargo services. It has a fleet of 1,200+ aircraft and also provides ancillary services like aircraft maintenance and vacation packages.
The company focuses on customer loyalty through its frequent flyer program called SkyMiles and its American Express partnership. This partnership generated $7.4 billion for the company in 2024. Because of this partnership, 8% of all money spent on American Express cards and 22% of their card loans benefit Delta Air Lines Inc. (NYSE:DAL) and gives the company access to wealthy customers.
After COVID, there was an increased demand for premium travel which benefits Delta Air Lines Inc. (NYSE:DAL) and aims for 37% premium revenue. Despite LCC/ULCC competition (airlines that offer lower fares by reducing services and amenities), this company’s superior service and industry capacity constraints allow it to gain market share and increase revenue. It achieved a record $57 billion in 2024 revenue, which is a 4% increase from 2023, and projects 7-9% growth for 2025.
9. Constellation Energy Corp. (NASDAQ:CEG)
Upside Potential as of March 10: 58.56%
Number of Hedge Fund Holders: 85
Constellation Energy Corp. (NASDAQ:CEG) is a US energy provider that delivers electricity, natural gas, and sustainable solutions across five key regions. With a portfolio of nuclear, wind, solar, and other generation assets, it serves a range of customers, from utilities to individual households.
On February 24, DBS analyst Elizabelle Pang maintained a Hold rating on the company with a $300 price target. This sentiment was supported by the company’s recent announcement to acquire Calpine Corporation, which is driven by the expansion of AI data centers and the electrification of transportation and buildings.
The company’s core growth engine is its ability to meet the power demands of AI data centers. Its nuclear fleet, which operates at a 95% capacity factor and produces 41 million megawatt-hours of clean energy, is central to this. It takes the company under 20 days to refuel outages. Constellation Energy Corp. (NASDAQ:CEG) is working to fix power shortages in the PJM area by promoting programs that encourage customers to use less electricity during peak times. PJM is the regional power grid operator for parts of 13 states and DC to ensure reliable electricity flow.
Alger Mid Cap Focus Fund has been positive on Constellation Energy Corp. (NASDAQ:CEG) because of its leading position in clean nuclear energy. The company has strong growth potential driven by electrification and AI, along with favorable market conditions and agreements. The fund stated the following in its Q3 2024 investor letter:
“Constellation Energy Corporation (NASDAQ:CEG) is the largest producer of clean energy in the U.S., with 32,400 Megawatts of capacity, 87% of which is nuclear generated. Its nuclear, hydro, wind, and solar facilities provide 10% of all clean energy on the U.S. grid and 22% of its clean baseload power. We believe the company stands to benefit from the increasing electrification of the U.S. economy. The rise of electric vehicles, data centers, and reshoring of American manufacturing is driving U.S. electricity load growth for the first time in nearly two decades. In our view, AI workloads are projected to significantly increase energy demand from data centers over the next few years. As American enterprises seek clean and reliable energy sources, nuclear power, which is carbon-free and dependable, stands out compared to intermittent renewables like wind and solar. Constellation, as an unregulated independent power producer, benefits from low fixed costs and can capture upside from rising electricity prices. We believe that potential opportunities for earnings growth include colocation (data centers near nuclear plants) and energy-matching programs with cloud providers willing to pay premium prices for nuclear energy. The Inflation Reduction Act also provides downside protection through a guaranteed minimum price for nuclear generation. During the quarter, shares contributed to performance from two events: 1) annual electricity auctions revealed tightening markets driven by increasing demand, driving higher pricing in the Middle Atlantic states, leading management to raise their fiscal 2024 earnings projections. 2) On September 20, 2024, Constellation Energy announced the signing of a 20-year power purchase agreement with Microsoft, which includes restarting Three Mile Island’s Unit 1 to supply energy.”
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