On Friday, August 29, stocks declined as investors decided to take some money out before a long weekend. This comes after the S&P 500 reached a new record and NVIDIA Corporation (NVDA) reported strong earnings earlier in the week. New inflation data also showed that rising prices remain a concern going into September.
The S&P 500 lost 0.64% but still had its fourth consecutive winning month. The Nasdaq Composite went down by 1.15%. The Dow Jones Industrial Average dropped 0.20%.
Despite these losses on Friday, all three major indexes finished August with strong gains. The 30-stock Dow rose over 3% for the month, the S&P 500 gained nearly 2%, and the tech-heavy Nasdaq increased by 1.6%.
Looking at inflation, the core Personal Consumption Expenditures (PCE) price index, which is a key inflation measure closely watched by the Federal Reserve and excludes food and energy costs, went up 2.9% in July. While this data aligned with expectations, it accelerated compared to the previous month and was the highest since February.
Ellen Zentner, the chief economic strategist at Morgan Stanley Wealth Management, said:
“The Fed opened the door to rate cuts, but the size of that opening is going to depend on whether labor-market weakness continues to look like a bigger risk than rising inflation.”
Zentner added that the “in-line PCE Price Index” will keep the attention on the job market, and for now, it still seems likely there could be a rate cut in September.
With this background in mind, let’s take a look at the 10 hot mid-cap stocks to buy now.
Our Methodology
To compile our list of the 10 hot mid-cap stocks to buy now, we used the Finviz stock screener to find stocks with a market capitalization between $2 billion and $10 billion and sorted our results based on 6-month performance. We looked for stocks that have gained at least 40% in the last 6 months as of August 29, 2025. Next, we focused on the top 10 stocks most favored by institutional investors. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s Q2 2025 database of 983 elite hedge funds. Finally, the 10 hot mid-cap stocks to buy now were ranked in ascending order based on the number of hedge funds holding stakes in them as of Q2 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10 Hot Mid Cap Stocks to Buy Now
10. Pagaya Technologies Ltd. (NASDAQ:PGY)
Market Capitalization: $2.60 Billion
6-Month Performance: 187.45%
Number of Hedge Fund Holders: 32
Pagaya Technologies Ltd. (NASDAQ:PGY) is one of the best hot mid-cap stocks to buy now. On August 11, JMP Securities increased its price target for Pagaya Technologies Ltd. (NASDAQ:PGY) from $26 to $35 and kept a Market Outperform rating.
This decision came after Pagaya Technologies Ltd. (NASDAQ:PGY) reported Q2 2025 results. JMP analysts noted that the company is at an “inflection point” where almost all incremental gross profit will now convert to pretax profit.
Previously, on August 8, Keefe, Bruyette & Woods also increased the price target for Pagaya Technologies Ltd. (NASDAQ:PGY) from $27 to $38 from $27 and maintained an Outperform rating.
The firm described the company’s recent quarter as “record setting.” Pagaya Technologies Ltd. (NASDAQ:PGY) reported a record GAAP net income of $17 million, which is up $91 million compared to the same quarter last year. This performance was driven mainly by revenue growth and lower expenses. The company also reached a record network volume of $2.6 billion, up 14% year-over-year, driven by growth in its Auto and Point-of-Sale verticals. Additionally, Pagaya Technologies Ltd. (NASDAQ:PGY) achieved a record adjusted EBITDA of $86 million, up $36 million year-over-year.
Keefe, Bruyette & Woods pointed out that Pagaya Technologies Ltd. (NASDAQ:PGY) is “undervalued when compared to peers.”
Since the company reported its Q2 2025 results on August 7, Pagaya Technologies Ltd. (NASDAQ:PGY) has gained more than 20% as of August 29.
Pagaya Technologies Ltd. (NASDAQ:PGY) is a financial technology company that uses its AI network to provide comprehensive consumer credit and residential real estate products.
9. Viasat, Inc. (NASDAQ:VSAT)
Market Capitalization: $4.36 Billion
6-Month Performance: 269.91%
Number of Hedge Fund Holders: 37
Viasat, Inc. (NASDAQ:VSAT) is one of the best hot mid-cap stocks to buy now. On August 19, Viasat, Inc. (NASDAQ:VSAT) announced that it received an award worth AUD 252 million from Geoscience Australia (GA) and Toitū Te Whenua Land Information New Zealand (LINZ). The company will provide additional satellite services for the region’s Southern Positioning Augmentation Network, also known as SouthPAN.
According to the report by Viasat, Inc. (NASDAQ:VSAT), this award builds on an earlier SouthPAN contract. From the new agreement, the company estimates a net incremental value of AUD 214 million.
SouthPAN is a satellite-based augmentation system developed in collaboration by Australia and New Zealand. It offers precise positioning and navigation services to support a range of industries, including aviation, maritime, agriculture, surveying, and emergency response.
The new award amends the previous agreement and is part of Viasat, Inc.’s (NASDAQ:VSAT) Communication Services segment. It covers ongoing services from the company’s existing in-orbit satellites and includes a new payload.
Viasat, Inc. (NASDAQ:VSAT) is a global communications technology company that offers internet and other communication services to consumers, businesses, governments, and militaries. The company offers important communications solutions that are available on the ground, in the air, at sea, and in space.
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