We’re only one month into 2026, and the progress of global economies has been anything but normal. While geopolitical tensions steal the limelight, countries haven’t been shy of using their trade domination as leverage. When Donald Trump threatened to acquire Greenland, Europe threatened to pivot toward China and India for trade. When Canada announced plans to do something similar, the US threatened to impose a 100% tariff.
These developments have kept the broader market in check so far. The next FOMC meeting, scheduled for January 28, is also keeping everyone on their toes. Uncertain environments like the one we’re currently going through tend to keep stock valuations suppressed. However, as soon as these go away, the same stocks revert to better valuations. Something similar could happen this week, either through a rate cut or clarity on US-Iran relations.
Liz Thomas, head of investment strategy at SoFi, spoke to Marketwatch on January 25 and pointed out that even without a rate cut, cheaper stocks could give impressive returns:
“I don’t think the market needs a cut, and frankly, I think the market can be just fine without a cut for the early part of this year… So I think investors are optimistic the broadening out in this market [will] continue, and for other sectors to pull some weight as far as returns go.”
We therefore decided to look at stocks trading at a cheap forward earnings multiple and with significant upside potential for investors this year.
Stocks
Our Methodology
To come up with our list of 10 cheap stocks with huge upside potential, we looked at stocks with a market cap of at least $2 billion that were trading below a forward PE of 15x. We then looked at their potential upside according to Wall Street analysts, shortlisted stocks with at least 35%-40% upside, and ranked them in ascending order of their upside potential, as of January 23. We have also included the number of hedge funds that hold the stock as of Q3 2025.
Why do we care about what hedge funds do? 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. Vista Energy, S.A.B. de C.V. (NYSE:VIST)
Potential Upside: 39.89%
Forward P/E: 9.56
Number of Hedge Fund Holders: 21
Tasso Vasconcellos, an analyst at UBS, upgraded the stock from a Hold rating to a Buy on January 11. He also raised the firm’s price target for the shares from $50 to $65. His revised price target offers an additional 22.8% upside from current levels. 12 other analysts cover the stock on Wall Street, and they are even more bullish, with a median price target of 39.89%.
The upgrade is driven by UBS’s view that the company is positioned for strong production growth over the next several years. The firm also believes that the stock is trading at a valuation that is discounted relative to the company’s long-term prospects. In a research note to investors, the analyst highlighted Vista Energy’s solid execution track record, noting the company’s proven ability to deliver on its plans and successfully navigate prior challenges related to equipment availability and outflow capacity constraints. Based on these factors, the firm believes the current share price levels offer an attractive entry point for investors.
The company announced that it will release its full-year 2025 and fourth-quarter 2025 financial results on February 25, 2026, after market close.
Vista Energy, S.A.B. de C.V. (NYSE:VIST) is engaged in the exploration and production of oil and gas in Latin America. Its principal assets are located in the Vaca Muerta play of the Neuquina basin, Argentina. The company owns oil-producing assets in Mexico and Argentina. It was founded in 2017 and is based in Mexico City, Mexico.
9. SM Energy Company (NYSE:SM)
Potential Upside: 55.25%
Forward P/E: 8.31
Number of Hedge Fund Holders: 44
Tim Rezvan of KeyBanc reaffirmed his Buy rating on SM Energy Company (NYSE:SM) stock, along with the price target of $28, on January 17. Earlier in the same week, on January 13, RBC Capital analyst Scott Hanold lowered his price target on the stock from $35 to $29. However, the analyst kept his Hold rating on the shares. The analyst explained in a research note that the firm updated its estimates after completing its final fourth-quarter commodity mark-to-market analysis.
Additionally, analyst Scott Hanold noted that the price target revision also reflects RBC’s updated commodity price outlook, which now assumes lower oil prices. This outlook led to a lower price target. Interestingly, the geopolitical tensions in the Middle East are keeping oil prices elevated.
Mizuho Securities also presented a similar stance on the company on January 9. William Janela of Mizuho Securities maintained a Buy rating while cutting the firm’s price target for the stock from $38 to $34. His revised price target implies an impressive 82% upside from the current levels. The update comes ahead of the company’s fourth-quarter earnings report. According to the analyst, the price target adjustment reflects a modestly slower activity pace compared with the firm’s previous model assumptions, which led to the revision in its outlook.
SM Energy Company (NYSE:SM) operates as an independent energy company. The company is involved in the exploration, production, acquisition, and development of gas, oil, and natural gas liquids in Texas. It was founded in 1908 and is based in Denver, Colorado.
8. Tenable Holdings, Inc. (NASDAQ:TENB)
Potential Upside: 55.9%
Forward P/E: 12.82
Number of Hedge Fund Holders: 32
On January 20, Truist Securities significantly lowered its target price on Tenable Holdings, Inc. (NASDAQ:TENB) stock from $42 to $27, suggesting a mere 20% upside from here on. On the other hand, according to a report released on January 13, UBS analyst Roger Boyd reiterated his Buy rating and set a price target of $43 for the stock. His price target implies an almost 100% upside from the current levels. This upside is in line with the highest Wall Street analyst upside of 100.45% among 25 analysts covering the stock.
In another bearish development on January 8, financial services firm Needham lowered its price target for the shares from $38 to $28 while maintaining a Buy rating. According to the analyst, the company’s transition from multi-year contracts to annual upfront billing is resulting in a wider divergence between current Remaining Performance Obligations (cRPO) growth and calculated current billings (CCB) growth. This transition started in the first quarter of 2025.
The firm said that this change in billing structure is likely to introduce short-term volatility in the company’s financial metrics. Additionally, Needham noted that this volatility could persist unless management offers clearer medium-term financial targets or provides additional disclosure around the Tenable One platform.
Tenable Holdings, Inc. (NASDAQ:TENB) provides cyber exposure management solutions across the Middle East, Japan, Europe, the Americas, Africa, and the Asia Pacific. The company’s platforms include Tenable Cloud Security, Tenable Vulnerability Management, Tenable Identity Exposure, Tenable Web App Scanning, and Tenable Lumin Exposure View.
7. Melco Resorts & Entertainment Limited (NASDAQ:MLCO)
Potential Upside: 61.42%
Forward P/E: 10.25
Number of Hedge Fund Holders: 24
Texas Capital initiated coverage of Melco Resorts & Entertainment Limited (NASDAQ:MLCO) stock on January 22 with a Buy rating and a $11.5 price target. Analysts believe the company’s unique non-gaming offerings are a key factor in its growth story, with the Macau market gross gaming revenue closing in on 2019 levels.
In contrast to Texas Capital, on January 15, the stock was downgraded by JPMorgan from Overweight to Hold. JPMorgan analyst DS Kim lowered the firm’s price target from $11 to $7.7, suggesting a further 25.61% upside from the current levels. The firm noted that it is taking a more selective approach in the short term toward Macau gaming stocks. For the company specifically, JPMorgan sees downside risk to consensus estimates. The firm also noted the lack of dividend support. In a research note to investors, analysts added that Melco Resorts’ margins demonstrate clear and sustained improvement, and the stock remains in ‘show-me’ territory for investors.
Bank of America analyst Karl Choi also reduced the price target for the stock from $9.5 to $7.9 on January 13 and reaffirmed his Hold rating. The adjusted price target offers a further 28.87% upside from the current levels. The analyst said the target price revision reflects a more selective view of Macau gaming stocks ahead of an expected slowdown in gross gaming revenue growth in 2026.
Melco Resorts & Entertainment Limited (NASDAQ:MLCO) operates as a developer, owner, and operator of casino gaming and resort facilities in Europe and Asia. The company operates and owns City of Dreams, restaurants and bars, suites and villas, retail outlets, recreation and leisure facilities, and a wet stage performance theater. It was founded in 2004 and is headquartered in Central, Hong Kong.
6. Extreme Networks, Inc. (NASDAQ:EXTR)
Potential Upside: 66.1%
Forward P/E: 14.71
Number of Hedge Fund Holders: 38
On January 13, reports emerged that the company is considering a possible acquisition of Ruckus Networks from CommScope Holding Company, according to people familiar with the discussions. Extreme Networks has been evaluating a potential cash-and-stock transaction that could value the Wi-Fi and networking equipment provider at more than $1 billion. However, a final decision has not yet been reached. The company could ultimately decide not to move forward with the deal. Upon request, representatives from both Extreme Networks and CommScope Holding declined to comment on the matter.
A transaction worth more than $1 billion would be significant for the stock, which closed trading on January 13 with a market value of about $2.1 billion. In the meantime, CommScope shares surged 2.9% to $19.04, valuing the company at roughly $4.2 billion. If completed, the deal would significantly improve the company’s portfolio of products and services. It will support large customers such as financial services firms and government agencies in managing networks.
CommScope acquired Ruckus Networks in 2019 as part of its acquisition of Arris International. The firm has recently been selling assets to reduce its debt, including a $10.5 billion sale of its broadband and cable equipment unit to Amphenol.
Extreme Networks, Inc. (NASDAQ:EXTR) operates as a developer, marketer, and seller of network infrastructure equipment and related software. It provides ExtremeCloud IQ, ExtremeCloud IQ-Site Engine, and ExtremeCloud IQ Essentials. The company serves mid-market and enterprise customers, as well as service providers across several industries.
5. BioMarin Pharmaceutical Inc. (NASDAQ:BMRN)
Potential Upside: 71.68%
Forward P/E: 10.85
Number of Hedge Fund Holders: 54
On January 20, Canaccord Genuity raised BioMarin Pharmaceutical Inc.’s (NASDAQ:BMRN) price target from $84 to $98, implying 74.4% upside from the current share price. On January 13, Wedbush analyst Yun Zhong reaffirmed his Buy rating on the stock while maintaining a price target of $94. Yun Zhong’s Buy rating is based on several factors that reinforce the company’s ability to deliver sustained long-term growth. BioMarin’s 2025 revenue guidance is consistent with broader market expectations and is supported by the management’s goal of maintaining double-digit revenue growth into the 2030s.
The company continues to strengthen its leadership position in achondroplasia through Voxzogo, benefitting from a broad label, strong patient adherence, early treatment initiative, and global reach. At the same time, the firm is pursuing additional label and indication expansions in hypochondroplasia and other skeletal disorders. Regulatory and legal efforts, including an sNDA for full approval and strategies related to orphan exclusivity and competition, are intended to protect and extend this competitive position.
Moreover, recent pipeline developments offer incremental upside, with BMN‑351 showing dose-responsive dystrophin expression in Duchenne muscular dystrophy and BMN‑333 advancing into Phase 2/3 development. In addition to Wedbush, Evercore ISI also reaffirmed its Buy rating on the stock and set a price target of $110 on January 13.
BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) operates as a biotechnology company. The company is engaged in the commercialization and development of therapies for life-threatening rare diseases and medical conditions. Its products consist of VIMIZIM, VOXZOGO, NAGLAZYME, and PALYNZIQ.
4. Magnite Inc (NASDAQ:MGNI)
Potential Upside: 75.21%
Forward P/E: 13.51
Number of Hedge Fund Holders: 40
On January 21, Jason Kreyer of Craig-Hallum maintained a Buy rating on Magnite Inc (NASDAQ:MGNI). MGNI is currently covered by 15 analysts on Wall Street, according to CNN, with the most bullish analyst maintaining a $39 price target, translating to an upside of 153.08%.
The company’s growth prospects received a boost on January 22 when MNTN, a firm that offers software for brands to advertise on connected TV, partnered with MGNI. This partnership will enable MNTN to give its advertisers exposure to high-engagement programs like sports and breaking news for the first time. For Magnite, this means publishers have new revenue opportunities while a new class of focused advertisers can now use MGNI’s services.
This is what Mike Laband, Group SVP of US Revenue at the company, had to say about the partnership:
“This collaboration brings performance-driven marketers into streaming at scale, creating meaningful new revenue opportunities for publishers. Partnering with MNTN opens the door for a new class of performance-focused advertisers to show up in places they’ve never been before from live award shows to the biggest sporting events of the year.”
Magnite Inc (NASDAQ:MGNI) is the world’s largest independent sell-side advertising platform. It enables publishers to earn money from their content on Connected TV, mobile devices, and desktops. It is headquartered in New York City, USA.
3. Wix.com Limited (NASDAQ:WIX)
Potential Upside: 80.83%
Forward P/E: 12.8
Number of Hedge Fund Holders: 71
On January 22, Citizens lowered its price target for Wix.com Limited (NASDAQ:WIX) from $185 to $125. This may sound like a steep downgrade at first, but the revised target price still offers 41% upside from here on. On the same day, Trevor Young of Barclays also lowered his price target, though the revision was only a $5 cut from the previous $210.
Analysts are clearly pricing in a new reality for the stock, which has been struggling for a year, down 62% due to the constant financial pressure of creating new AI tools. The stock has gained over 15% in the last 3 trading sessions due to a recent announcement that has shifted investor sentiment. The company launched a new AI website builder ‘Wix Harmony’ that now offers visual editing capabilities for websites generated with natural language generation.
Users can now create enterprise-grade websites ready to be deployed just by giving prompts to both create and edit the website. It addresses a common pain point of users developing websites with AI: security vulnerabilities and the availability of only basic designs. Wix Harmony fixes these limitations, as CEO Avishai Abrahami points out:
“With Wix Harmony, now anyone can create a beautiful website, design easily with prompts and natural language without sacrificing scalability, security, reliability and performance,”
Wix.com Limited (NASDAQ:WIX) is a software company that provides cloud-based web development services. It initially became famous for its simple drag-and-drop website builders for non-technical users, but is now also an established brand for making websites with AI.
2. Super Group Limited (NYSE:SGHC)
Potential Upside: 85.38%
Forward P/E: 11.85
Number of Hedge Fund Holders: 31
Bernie McTernan, an analyst at Needham, reiterated his Buy rating on the stock, along with the price target of $17, on January 14. The firm’s price target implies a further 75.1% upside from the current levels.
Moreover, according to a report released on January 13, Canaccord Genuity reaffirmed its Buy rating along with the price target of $18 for the stock. The firm’s price target suggests an additional 85.5% upside from current levels. This upside is consistent with the median analyst estimate, based on 8 analysts covering the stock.
On December 31, Benchmark named the stock a 2026 EDM Top Idea, citing a strong conviction that the company is entering a multi-year phase of earnings compounding. The firm believed that the stock offers a compelling risk-reward profile ahead of a 2026 catalyst calendar, which includes the new market expansion, World Cup, and the rollout of the Super Coin initiative. Analyst Mike Hickey from Benchmark maintained his Buy rating on the stock. He also reaffirmed the $17 price target for the shares, offering an attractive 71% upside from current levels.
Super Group Limited (NYSE:SGHC) is an online sports betting and gaming operator. It provides an online sports betting and casino offering, Betway, and a multi-brand online casino, Spin. The company operates across the Middle East, Europe, Africa, the Asia-Pacific, North America, and South/Latin America. It is headquartered in Saint Peter Port, Guernsey.
1. Soleno Therapeutics, Inc. (NASDAQ:SLNO)
Potential Upside: 159.68%
Forward P/E: 8.26
Number of Hedge Fund Holders: 58
Multiple analysts remain bullish on Soleno Therapeutics, Inc. (NASDAQ:SLNO). H.C. Wainwright raised the target price on the stock from $110 to $120 on January 20, while Derek Archila of Wells Fargo maintained his $106 price target. Analyst Kristen Kluska from Cantor Fitzgerald reiterated her Buy rating on the stock and set a price target of $123 on January 13.
However, on January 12, Wolfe Research cut its price target for the stock from $75 to $60 while maintaining a Buy rating. The revised price target still offers an upside of 41.7% from current levels, matching the lowest analyst estimate on the street. The firm noted that Soleno Therapeutics’ fourth-quarter sales of Vykat XR came in above consensus expectations. However, it added that the weaker new patient start forms continue to pressure stock performance. Wolfe Research also said that the current market valuation appears to reflect its bear-case scenario for product uptake. In contrast, in the firm’s base-case outlook, it expects a more moderate quarter-over-quarter decline in new patient starts than the broader market is currently pricing in.
Soleno Therapeutics, Inc. (NASDAQ:SLNO) operates as a clinical-stage biopharmaceutical company. The company is engaged in the commercialization and development of novel therapeutics for the treatment of rare diseases. It was founded in 1999 and is based in Redwood City, California.
While we acknowledge the potential of SLNO as an investment, 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 SLNO and that has 100x upside potential, check out our report about this cheapest AI stock.
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