In this article, we will look at the 10 Stocks Positioned for Breakout Growth.

US equity markets are back at record highs, with the S&P 500 topping 7,000, driven by a potential U.S.-Iran ceasefire, strong corporate earnings expectations, and renewed AI optimism. Investors poured $28 billion into U.S. equities as the U.S. moved closer to an agreement to end the Iran war.

After weeks of heightened volatility, stocks are breaking out on the prospects of peace in the Middle East. In addition, the bounce back comes amid investors taking advantage of discounted valuations following a deep correction from all-time highs.

The breakout looks set to continue, as strategists from some of Wall Street’s biggest banks remain upbeat on US earnings. According to JPMorgan strategists, the first quarter reporting season is proving reassuring, as Morgan Stanley insists that earnings-per-share growth is a sign of recovering profits.

“Despite geopolitical risks, the earnings recovery remains intact driven by the return of positive operating leverage,” Morgan Stanley’s Michael Wilson said in a note, as sales rise faster than costs, boosting profits.

Strategists at JPMorgan, led by Mislav Matejka, insist that short-term market volatility is unlikely to persist, as historical data show markets have been resilient to oil shocks. After previous surges in crude oil prices, the S&P 500 achieved positive returns over both the 6- and 12-month periods.

Amid renewed investor interest, breakout stocks are heavily concentrated in technology, industrials, and AI-driven sectors that were previously hurt by the Iran-US conflict. Smaller-cap growth companies are also on the move, as depicted by the Russell 2000 index, which has rallied by more than 11% over the past month.

Our Methodology

To identify the top breakout stocks to invest in, we used the Finviz screener to find those that have breached the 200-day moving average. We settled on stocks breaking out above the 200-day moving average on high trading volume, which is more than twice the three-month average. We further refined the list by selecting stocks with a relative volume greater than 1, indicating heightened market activity and potential investor interest. We also settled on stocks with upside potential of more than 10% and that are popular among elite hedge funds in Q4 2025. Finally, we ranked the stocks based on their upside potential.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research shows 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 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).

Stocks Positioned for Breakout Growth

10. The Sherwin-Williams Company (NYSE:SHW)

Stock Upside Potential: 11.08%

Number of Hedge Fund Holders: 83

The Sherwin-Williams Company (NYSE:SHW) is one of the stocks positioned for breakout growth. On March 17, Argus reiterated that The Sherwin-Williams Company (NYSE:SHW) is a Buy, impressed by the company’s leadership role in the manufacture, distribution, and sale of paint coatings and other related products. However, it cut its price target to $355 from $375.

According to the research firm, The Sherwin-Williams Company (NYSE:SHW) is well-positioned to benefit from higher demand trends, given its dominant market position. In addition, it expects the company to deliver significant margin expansion. Consequently, it views the company as a core long-term holding in the materials sector.

Early in the year, the company’s Chief Executive Officer, Heidi G. Petz, warned of a continuation of a softer, longer demand environment. The conditions are expected to persist into the second half of the year, based on customer sentiment and macroeconomic indicators. Nevertheless, the executive is confident the company can continue to outperform the market, given its differentiated strategy of providing innovative, productive solutions. For the first quarter, Sherwin-Williams expects sales to increase by mid-single-digit percentage. On April 1, Sherwin-Williams announced it will release its first-quarter results, ending March 31, before the market opens on April 28, 2026.

The Sherwin-Williams Company (NYSE:SHW) is a global leader in the manufacture, development, distribution, and sale of paints, coatings, and related products to professional, industrial, commercial, and retail customers.

9. Construction Partners Inc. (NASDAQ:ROAD)

Stock Upside Potential: 12.49%

Number of Hedge Fund Holders: 26

Construction Partners Inc. (NASDAQ:ROAD) is one of the stocks positioned for breakout growth. On April 1, Construction Partners Inc. (NASDAQ:ROAD) completed the acquisition of Four Star Paving. With the acquisition, the company gains access to a premier commercial paving contractor, expected to strengthen its prospects in road construction and maintenance.

Four Stars has carved a niche in asphalt paving and related construction services in Middle Tennessee, serving municipal, industrial, and commercial customers. The acquisitions should strengthen Construction Partners’ vertical integration of services, enhance capabilities, and scale. In addition, the company will be better equipped to participate in resulting construction projects and opportunities.

Construction Partners has been on an acquisition spree as it continues to expand its growth potential and presence in high-growth markets. In the first quarter, it completed two key acquisitions in Houston and Daytona Beach, Florida. It has also expanded in Houston with the acquisition of GMJ Paving, strengthening its presence in public infrastructure projects.

Construction Partners Inc. (NASDAQ:ROAD) is a vertically integrated, asphalt-centered infrastructure company that constructs and maintains transportation networks across the Sunbelt. It builds roads, highways, bridges, and airport runways for public and private clients, while operating its own asphalt plants, aggregate facilities, and liquid asphalt terminals.