On January 6, Dan Greenhaus of Solus Alternative Asset Management, Cameron Dawson of NewEdge Wealth, and Sonali Basak of iCapital appeared on CNBC’s ‘Closing Bell’ to discuss what investors should be watching. Talking about a fourth consecutive strong year, Greenhaus expressed a positive outlook and cited several macro tailwinds: strong earnings growth, the intact AI story, and a Fed that is becoming accommodative rather than restrictive. He specifically mentioned the continuation of reserve purchases as a driver for the market’s immediate future.
The market ended the previous year with a whimper instead of reaching the 7,000 level that Greenhaus had anticipated. Greenhaus explained that an AI rotation story hampered some large-cap names, creating downward pressure. While banks and healthcare picked up some of the slack, he believes that the math of that rotation held the market back more than expected. Despite this, he reiterated that the underlying tailwinds matter more than the specific closing figures of the year-end rally.
Basak offered a more measured perspective and predicted mid-to-high single-digit returns. While the backdrop is positive, she expects a choppy year. She attributed the weakness at the end of last year to selectivity in the AI theme and rate sensitivity, and noted that the 10-year yield is up a quarter of a percentage point from its October lows. Basak warned of upside risk to longer-term yields regardless of potential rate cuts.
Dawson concluded the segment by discussing her fair value range of 7,200 to 7,400. She suggested that a lower-return year implied that valuations would stay flat, leaving earnings growth as the primary driver for gains; a repeat of the 2025 trend, where the market started and ended at 22x earnings. However, she highlighted a high bar for 2026: unlike 2025, where estimates were being cut, analysts have been raising estimates for the last 6 months. With earnings currently sitting at $310 a share and a projected 15% growth rate, she cautioned that there is little room for volatility or multiple expansion.
That being said, we’re here with a list of the 10 oversold stocks to buy now.
Our Methodology
We sifted through the Finviz stock screener to compile a list of oversold stocks that have declined by at least 30% over the past three months but for which analysts see potential to recover. We then selected 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 their 6-month performance. We have also added the hedge fund sentiment for each stock, as of Q3 2025.
Note: All data was sourced on January 7.
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 Oversold Stocks to Buy Now
10. Life360 Inc. (NASDAQ:LIF)
3-Month Decline as of January 7: 39.24%
Average Upside Potential as of January 7: 50.29%
Number of Hedge Fund Holders: 17
Life360 Inc. (NASDAQ:LIF) is one of the oversold stocks to buy now. On January 5, Citizens downgraded Life360 to Market Perform from Outperform, but without setting a price target on the shares. The firm expressed growing skepticism regarding Life360’s 2026 growth catalysts as the company’s core expansion recently decelerated. Citizens pointed out that Life360 faces difficult year-over-year comparisons after its successful 2025 US advertising campaign, while further domestic price increases appear unlikely until a significant new feature update is launched.
Additionally, on the same day, Life360 announced two major milestones: the completion of its $120 million acquisition of Nativo and surpassing 50 million Monthly Active Users/MAU in the US. The purchase of Nativo, which is a leader in advertising tech, was finalized through a deal comprised of 65% cash and 35% stock. This strategic move allows Life360 to integrate Nativo’s premium publisher network and ad tech into its own ecosystem, effectively creating a massive first-party platform designed to help brands reach families across the Life360 app, Connected TV, mobile, and other digital environments.
Earlier on December 11, DA Davidson initiated coverage of Life360 with a Buy rating and $94 price target. The firm believes that Life360 Inc. (NASDAQ:LIF) is on the cusp of establishing broader awareness in several underpenetrated global markets, which is expected to spark international growth in MAU. The firm also noted that ongoing advertising efforts, coupled with the introduction of pet GPS subscriptions, are likely to generate higher-margin revenue streams for the company.
Life360 Inc. (NASDAQ:LIF) operates a technology platform to locate people, pets, and things in North America, Europe, the Middle East, Africa, and internationally.
9. Gambling.com Group Limited (NASDAQ:GAMB)
3-Month Decline as of January 7: 32.81%
Average Upside Potential as of January 7: 57.75%
Number of Hedge Fund Holders: 18
Gambling.com Group Limited (NASDAQ:GAMB) is one of the oversold stocks to buy now. On December 30, Freedom Capital analyst Egor Tolmachev initiated coverage of Gambling.com with a Buy rating and $8.50 price target. Gambling.com is recognized as a premier performance marketing and sports data provider within the online gambling sector. According to the firm, the company’s shares represent a capital-light, pure-play opportunity for investors to gain exposure to the rapid, state-by-state legalization of the US market.
In Q3 2025, Gambling.com Group Limited (NASDAQ:GAMB) highlighted a 21% year-over-year revenue increase to $39 million. This growth was fueled by the company’s sports data services, which saw revenue quadruple to $9.2 million. The segment now accounts for 25% of total 2025 revenue, driven by the strong performance of enterprise solutions like OpticOdds and consumer platforms such as OddsJam and RotoWire.
Despite the top-line success, the group faced significant headwinds in its marketing division, which remained flat year-over-year due to unfavorable search ranking dynamics and poor organic search quality. Consequently, the company revised its full-year 2025 guidance downward to ~$165 million in revenue.
Gambling.com Group Limited (NASDAQ:GAMB) operates as a performance marketing company for the online gambling industry in North America, the UK, Ireland, rest of Europe, and internationally.
8. GoodRx Holdings Inc. (NASDAQ:GDRX)
3-Month Decline as of January 7: 33.82%
Average Upside Potential as of January 7: 71.82%
Number of Hedge Fund Holders: 21
GoodRx Holdings Inc. (NASDAQ:GDRX) is one of the oversold stocks to buy now. On January 5, Bank of America analyst Allen Lutz lowered the firm’s price target on GoodRx to $2.60 from $3 and kept an Underperform rating on the shares. For the broader drug distributor sector, however, the firm remained positive heading into 2026 and adjusted its price targets to align with recent changes in valuation multiples across the peer group.
Additionally, Morgan Stanley reduced its price target for GoodRx from $5 to $4 while maintaining an Equal Weight rating on December 18. In a 2026 outlook for the Healthcare Services sector, the firm noted that while healthcare tech and providers offer an attractive backdrop for alpha-generation, the managed care segment continues to struggle.
On December 8, Barclays initiated coverage of GoodRx with an Underweight rating and a $3 price target. While the firm established a Neutral outlook on the broader US healthcare tech and distribution industry, it expressed the most optimism toward drug distributors. In contrast, Barclays maintained a more cautious and mixed perspective on the dental and healthcare IT sub-sectors.
GoodRx Holdings Inc. (NASDAQ:GDRX), together with its subsidiaries, offers information and tools that enable consumers to compare prices and save on their prescription drug purchases in the US.
7. ReNew Energy Global (NASDAQ:RNW)
3-Month Decline as of January 7: 32.59%
Average Upside Potential as of January 7: 98.78%
Number of Hedge Fund Holders: 29
ReNew Energy Global (NASDAQ:RNW) is one of the oversold stocks to buy now. On December 17, Roth Capital lowered the firm’s price target on ReNew Energy Global to $8 from $8.15 and kept a Buy rating on the shares. This decision followed the company announcement on December 15 that Masdar pulled out of the investor consortium, leading to the cancellation of the proposed take-private deal. While Masdar did not explain its withdrawal, the firm noted the move was unexpected since both parties appeared to be on the verge of a final agreement.
Furthermore, on December 15, Mizuho reduced its price target for ReNew Energy Global to $7 from $8.15 with a Neutral rating following the news that Masdar has withdrawn from the consortium intended to take the company private. Despite a decline in the stock price on the said date, the firm suggested the selloff is overdone and attributed the downward pressure to arbitrage investors exiting their positions rather than a shift in fundamental value.
Consequently, Mizuho’s revised valuation shifts away from buyout expectations, now basing the target on no-growth next-12-month EBITDA multiples for the company’s power generation and manufacturing segments through FY2028, aligning ReNew Energy Global (NASDAQ:RNW) more closely with its industry peers.
ReNew Energy Global (NASDAQ:RNW), together with its subsidiaries, generates power through non-conventional and renewable energy sources in India. It operates through five segments: Wind Power, Solar Power, Hydro Power, Transmission Line, and Manufacturing segments.
6. Vital Farms Inc. (NASDAQ:VITL)
3-Month Decline as of January 7: 30.71%
Average Upside Potential as of January 7: 57.95%
Number of Hedge Fund Holders: 33
Vital Farms Inc. (NASDAQ:VITL) is one of the oversold stocks to buy now. On December 18, BMO Capital analyst Benjamin Mayhew lowered the firm’s price target on Vital Farms to $50 from $60 and maintained an Outperform rating on the shares. Following the company’s Investor Day, BMO noted that while the company’s downward revision of its 2025 outlook is disappointing, the cut reflects temporary disruptions that have already been addressed. This recovery is supported by a 2026 outlook that remains in line with expectations and an achievable long-term revenue CAGR in the low 20% range.
A day before this rating, Morgan Stanley lowered its price target for Vital Farms Inc. (NASDAQ:VITL) to $45 from $48 while maintaining an Overweight rating. During the company’s recent investor day, management updated its long-term algorithm with targets that exceeded analyst expectations; however, this positive outlook was eclipsed by an unexpected cut to 2025 revenue guidance, which triggered a sharp sell-off in the stock.
On December 5, Needham initiated coverage of Vital Farms with a Buy rating and a $45 price target, identifying the stock as a compelling proposition within the consumer staples sector. The firm’s bullish outlook is driven by the company’s strong volume-driven earnings fundamentals, which stand out in a market where few peers offer similar growth prospects.
Vital Farms Inc. (NASDAQ:VITL) is a food company that packages, markets, and distributes shell eggs, butter, and other products in the US.
5. Figma Inc. (NYSE:FIG)
3-Month Decline as of January 7: 38.49%
Average Upside Potential as of January 7: 60.81%
Number of Hedge Fund Holders: 38
Figma Inc. (NYSE:FIG) is one of the oversold stocks to buy now. On January 5, RBC Capital analyst Rishi Jaluria lowered the firm’s price target on Figma to $38 from $65 and kept a Sector Perform rating on the shares. The firm believes that 2026 will be a pivotal year where companies prepared for enterprise AI adoption experience significant growth, while those lagging may struggle against the perception that AI is making traditional software obsolete. Although management teams are issuing conservative guidance for early 2026, enterprise spending is beginning to stabilize and improve in certain sectors, with GenAI continuing to fuel innovation.
In Q3 2025, Figma Inc. (NYSE:FIG) achieved a significant milestone by crossing a $1 billion annual revenue run rate, fueled by a 38% year-over-year revenue increase to $274.2 million. This performance exceeded previous guidance and was driven largely by the rapid adoption of AI-powered tools like Figma Make. ~30% of high-value customers are now using Figma Make every week, signaling a successful shift toward AI-native design workflows.
Figma also collaborated with OpenAI to launch a dedicated Figma App for ChatGPT, allowing users to generate diagrams and charts in FigJam through conversational AI. Now, for Q4, the company expects revenue between $292 and $294 million. For the full year, revenue is projected to reach between $1.044 and $1.046 billion, representing 40% year-over-year growth.
Figma Inc. (NYSE:FIG) develops a browser-based tool for designing user interfaces that helps design and development teams build various products.
4. Doximity Inc. (NYSE:DOCS)
3-Month Decline as of January 7: 34.94%
Average Upside Potential as of January 7: 39.80%
Number of Hedge Fund Holders: 44
Doximity Inc. (NYSE:DOCS) is one of the oversold stocks to buy now. On December 15, Morgan Stanley upgraded Doximity to Overweight from Equal Weight with a price target of $65, which was increased from $62. Morgan Stanley stated that Doximity’s recent stock underperformance is inconsistent with the company’s business checks and the platform’s growing user engagement. The firm suggested that both company guidance and Street estimates appear conservative, creating what they view as an attractive entry point for investors at current share prices.
On December 8, Barclays analyst Glen Santangelo initiated coverage of Doximity with an Overweight rating and a $63 price target. While Barclays maintains a generally Neutral stance on the broader US healthcare tech and distribution sector, the firm is notably bullish on drug distributors. In contrast, the firm holds a more cautious and mixed view regarding the dental and healthcare IT sub-sectors.
The company’s strategic focus on AI has yielded significant user engagement, with AI Scribe users nearly tripling between FQ1 2026 and FQ2 2026. Doximity successfully integrated Pathway’s extensive medical data sets and AI models into its DoxGPT feature, granting physicians access to over 2,000 medical journals and integrated drug references. Total AI-related Quality Adjusted Users/QAUs rose 50% quarter-over-quarter, as doctors increasingly adopt these tools to streamline workflows and clinical tasks.
Doximity Inc. (NYSE:DOCS) operates as a digital platform for medical professionals in the US.
3. WaterBridge Infrastructure (NYSE:WBI)
3-Month Decline as of January 7: 30.83%
Average Upside Potential as of January 7: 54.91%
Number of Hedge Fund Holders: 44
WaterBridge Infrastructure (NYSE:WBI) is one of the oversold stocks to buy now. On January 5, Raymond James analyst Justin Jenkins upgraded WaterBridge Infrastructure to Strong Buy from Outperform with an unchanged price target of $30. This sentiment came out as the firm broadly adjusted ratings in the midstream supplier group heading into 2026. Raymond James believes investor focus is now centered on how individual companies translate macro tailwinds into realizable cash flow.
The company’s revenue reached $205.5 million in Q3 2025, which was an 8% sequential increase. This growth was driven by a 7% rise in combined produced water handling volumes, which averaged 2.5 million barrels per day. The company also saw a net loss of $18.7 million for the quarter. The quarter’s success was largely anchored by the commencement of the BPX Kraken project. This development includes a 10-year minimum volume commitment from BPX Energy and features an initial handling capacity of 400,000 bpd, with the potential to scale to 600,000 bpd.
Additionally, WaterBridge announced its final investment decision for the first phase of the Speedway Pipeline project. This large-diameter pipeline will connect the northern Delaware Basin to out-of-basin pore space; the project is expected to be in service by mid-2026.
WaterBridge Infrastructure (NYSE:WBI) is a water infrastructure company that provides water management solutions through integrated pipeline and water handling networks in the US.
2. BellRing Brands Inc. (NYSE:BRBR)
3-Month Decline as of January 7: 33.65%
Average Upside Potential as of January 7: 60.07%
Number of Hedge Fund Holders: 45
BellRing Brands Inc. (NYSE:BRBR) is one of the oversold stocks to buy now. On December 19, Bank of America raised the firm’s price target on BellRing Brands to $32 from $28 with a Neutral rating on the shares. As 2026 begins, the primary uncertainty for the consumer staples sector remains the growth of consumption, with valuations still widely varied across the industry. In a year-ahead note, BofA suggested that there is little incentive for investors to move from the sidelines until fundamental data indicates a significant shift in market conditions.
Before this rating, Deutsche Bank downgraded BellRing Brands Inc. (NYSE:BRBR) from Buy to Hold on December 15, setting a price target of $35. This sentiment was announced as part of the firm’s broader 2026 outlook update for the consumer packaged goods sector. The downgrade signaled a pivot toward a wait-and-see strategy regarding the volatile small-and-mid-cap/SMID space.
Deutsche Bank warned that the broader consumer staples sector faces a difficult environment in the coming year, characterized by market instability. In response to these headwinds, the firm recommended that investors prioritize fundamental quality and simplicity in their portfolios. Despite the cautious stance on SMID-cap names, the firm remains optimistic about two specific sub-sectors: non-alcoholic beverages and personal care, which it views as the most constructive areas for investment in 2026.
BellRing Brands Inc. (NYSE:BRBR), together with its subsidiaries, provides various nutrition products in the US. The company offers ready-to-drink/RTD protein shakes, other RTD beverages, protein powders, nutrition bars, and other products primarily under the Premier Protein and Dymatize brands.
1. Coinbase Global Inc. (NASDAQ:COIN)
3-Month Decline as of January 7: 34.94%
Average Upside Potential as of January 7: 51.85%
Number of Hedge Fund Holders: 73
Coinbase Global Inc. (NASDAQ:COIN) is one of the oversold stocks to buy now. On January 6, Bernstein analyst Gautam Chhugani lowered the firm’s price target on Coinbase to $440 from $510, while keeping an Outperform rating on the shares. Bernstein anticipates a tokenization supercycle for 2026, characterized by the migration of the dollar, capital markets, and event-based assets onto the blockchain. The firm remains optimistic about Bitcoin, expressing confidence that the cryptocurrency and the broader digital asset market have reached their cyclical bottom.
On the same day, Rosenblatt also reduced its price target for Coinbase to $325 from $470 with a Buy rating. The adjustment follows a significant deceleration in trading activity. Despite the near-term slowdown, Rosenblatt argued that the market has already priced in these lower volumes. The firm remains bullish on Coinbase’s long-term transformation, driven by material upside potential as the company expands into equities, prediction markets, and stablecoin payments, thereby reducing its reliance on volatile crypto trading cycles.
However, Goldman Sachs upgraded Coinbase Global Inc. (NASDAQ:COIN) to Buy from Neutral and raised its price target to $303 from $294 on January 5. The firm highlighted that the company’s recent product launches have strengthened the competitiveness of its core business. The firm characterizes Coinbase as a best-in-class play for those looking to capitalize on the expansion of crypto infrastructure.
Coinbase Global Inc. (NASDAQ:COIN) operates a platform for crypto assets in the US and internationally.
While we acknowledge the potential of COIN 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 COIN and that has 100x upside potential, check out our report about this cheapest AI stock.
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