In this article, we will discuss the 10 Stocks with Potential to Explode in 2026.
On June 16, Reuters reported that Wells Fargo lifted the S&P 500 index target for year-end 2026 to 7,950 on the heels of healthier corporate earnings, reducing macroeconomic risks after the U.S.-Iran interim deal and recent market decline, which reset investor sentiments. According to the brokerage, the S&P 500 EPS for 2026 is expected to increase to $340 from $315. This is backed by strong profit momentum and continued strength in the broader corporate fundamentals.
Also, the firm raised the 2027 EPS target for the index to $390 from the prior target of $365. The S&P 500 index saw an increase of more than ~10% on the YTD basis (as at June 15), thanks to the AI-backed rally and developments related to the Iran conflict. Reuters, while quoting Wells Fargo, reported that the recent softness in the broader equities cooled investor positioning. This resulted in sentiments coming to neutral levels and creating opportunities for more gains.
The brokerage firm has a constructive view on risk assets over the near term, primarily in the cyclical sectors and semiconductors.
Amidst such trends, let us now have a look at the 10 Stocks with Potential to Explode in 2026.
Our Methodology
To list the 10 Stocks with Potential to Explode in 2026, we sifted through a screener to shortlist the stocks that have an average upside potential of at least ~50% and a forward EPS long-term growth of more than 15% (3-5 Year CAGR). We also mentioned the hedge fund sentiments around each stock, as of Q1 2026. The stocks are ranked in an ascending order of their hedge fund sentiments.
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. Insider Monkey’s quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
Note: All the data is as of June 17
10 Stocks with Potential to Explode in 2026
10. AeroVironment, Inc. (NASDAQ:AVAV)
Average Upside Potential: ~75.4%
Forward EPS Long-term Growth (3-5 Year CAGR): ~19.5%
Number of Hedge Fund Holders: 37
AeroVironment, Inc. (NASDAQ:AVAV) is one of the Stocks with Potential to Explode in 2026. On June 11, the company announced that it had signed an MOU with Ubiqconn Technology Inc. This is for advancing collaboration on uncrewed systems as well as mission management capabilities, aiding Taiwan’s defense modernization and indigenous unmanned aircraft systems initiatives.
It establishes the common vision of both companies towards collaborating on developing and integrating a common controller capability on the basis of AeroVironment, Inc.’s Tomahawk Common Control Ecosystem to help the Taiwan Ministry of National Defense (MND) requirements. This includes the indigenous UAS program aiming at the procurement of tens of thousands of domestically produced drones.
AeroVironment, Inc. highlighted that it will offer a fully-integrated common controller system with access to Kinesis software as well as the KxM module. There will also be training and technical support to allow Ubiqconn to carry out demonstrations and enable future ad‑hoc integration activities.
AeroVironment, Inc. is engaged in designing, developing, producing, delivering, and supporting a portfolio of robotic systems and related services for government agencies and businesses.
9. Tyler Technologies, Inc. (NYSE:TYL)
Average Upside Potential: ~55%
Forward EPS Long-term Growth (3-5 Year CAGR): ~16%
Number of Hedge Fund Holders: 42
Tyler Technologies, Inc. (NYSE:TYL) is one of the Stocks with Potential to Explode in 2026. On June 10, Cantor Fitzgerald reduced the price objective on the company’s stock to $340 from $360 and maintained a “Neutral” rating on the shares. The firm reduced its price target as a result of the compression in the group multiple. However, the firm also sees Tyler Technologies, Inc. as the go-to provider for local and state government organizations.
Notably, Tyler Technologies, Inc. had earlier highlighted its focus on advancing 2 key growth areas for the company, i.e., AI and payments. As a result, it announced some additions to its corporate executive leadership structure and introduced a chief artificial intelligence officer and chief transactions officer. The company stated that Franklin Williams has been elevated to Chief Artificial Intelligence Officer (CAIO).
Tyler Technologies, Inc. promoted Ryan O’Connor to Chief Transactions Officer from Senior Vice President of payment strategy and operations.
Tyler Technologies, Inc. offers integrated software and technology management solutions for the public sector.
8. Zscaler, Inc. (NASDAQ:ZS)
Average Upside Potential: ~56.1%
Forward EPS Long-term Growth (3-5 Year CAGR): ~23.1%
Number of Hedge Fund Holders: 46
Zscaler, Inc. (NASDAQ:ZS) is one of the Stocks with Potential to Explode in 2026. On June 15, analyst Mike Cikos of Needham maintained a “Buy” rating on the company’s stock, retaining the price objective of $180.00. The analyst’s rating is backed by factors demonstrating robust competitive standing and pricing power. Partner checks demonstrate that Zscaler, Inc. continues to track ahead of internal targets for CY 2026 with healthy expansion and order growth, even as the company sustains mid-single-digit renewal price increases. This highlighted the willingness of customers to pay for the best-of-breed platform.
Furthermore, the channel feedback demonstrates that rivals like Palo Alto and Netskope remain dependent on the steep discounting. On the other hand, Zscaler, Inc. has been maintaining the premium positioning and is winning business, reflecting durable demand as well as a differentiated offering. Where discount-driven competition remains intense, like in Europe, Zscaler, Inc. has been refining its MSSP program and is also streamlining discount approvals. These steps are expected to improve deal velocity and partner alignment.
Zscaler, Inc. operates as a cloud security company.
7. Chewy, Inc. (NYSE:CHWY)
Average Upside Potential: ~70.2%
Forward EPS Long-term Growth (3-5 Year CAGR): ~32.0%
Number of Hedge Fund Holders: 53
Chewy, Inc. (NYSE:CHWY) is one of the Stocks with Potential to Explode in 2026. On June 12, Goldman Sachs analyst Eric Sheridan reduced its price objective on the company’s stock to $34 from $46 and maintained a “Buy” rating. According to the analyst, the company released its Q1 results, wherein it highlighted stronger-than-anticipated EBITDA margins, thanks to the ads, mix, and efficiency gains, along with investment towards healthcare and loyalty programs, increased AI-driven cost savings, and ongoing capital returns with the help of share repurchases and new financing capacity.
To provide a brief background, Chewy, Inc. reported results for Q1 2026, outperforming the pet category, while also enhancing profitability and FCF. The company is confident in its capability to enhance its market share and provide profitable growth. For FY 2026, Chewy, Inc. expects net sales of between $13.40 billion – $13.55 billion, and an adjusted EBITDA margin of 6.6% – 6.8%.
Chewy, Inc. is engaged in the e-commerce business, offering pet food and treats, pet supplies and pet medications, other pet-health products, as well as pet services.
6. Insulet Corporation (NASDAQ:PODD)
Average Upside Potential: ~69.4%
Forward EPS Long-term Growth (3-5 Year CAGR): ~21.4%
Number of Hedge Fund Holders: 55
Insulet Corporation (NASDAQ:PODD) is one of the Stocks with Potential to Explode in 2026. On June 10, Bank of America Securities analyst Travis Steed maintained a “Buy” rating on the company’s stock, setting a price objective of $208.00. The rating is backed by factors that mainly include the view that the company’s current share price already reflects the slower U.S. Omnipod growth profile.
The analyst’s modeling demonstrates that the expectations for mid‑teens to high‑teens growth in 2027–2028 remain achievable. This is even after assuming some erosion in Insulet Corporation’s share of new pump patients. Also, the analyst noted a wide range of upside if Omnipod maintains the new‑start share and there is faster-than-expansion in the insulin pump market, which can improve growth into the low‑ to mid‑20% range.
The analyst also sees Insulet Corporation growing EPS at a more than 25% compounded rate.
Insulet Corporation is engaged in developing, manufacturing, and selling insulin delivery systems for people with insulin-dependent diabetes.
5. Flutter Entertainment plc (NYSE:FLUT)
Average Upside Potential: ~51%
Forward EPS Long-term Growth (3-5 Year CAGR): ~27.06%
Number of Hedge Fund Holders: 57
Flutter Entertainment plc (NYSE:FLUT) is one of the Stocks with Potential to Explode in 2026. On June 17, Wedbush initiated coverage on the company’s stock with an “Outperform” rating and a price objective of $138.00. As per the analyst, the company is the world’s largest online sports betting and internet gaming operator and has exposure to the most attractive markets, led by FanDuel.
Furthermore, the firm noted that the company’s stock has declined by ~50% over the previous 6 months as a result of the US growth scare stemming from prediction markets and share losses to other sportsbooks.
As per the firm, Flutter Entertainment plc (NYSE:FLUT)’s current valuation levels remain overweight bearish outcomes. These valuation levels demonstrate the large disconnect from the consensus estimates. Also, they do not adequately consider the upside opportunity from the company’s own prediction market offering, as well as the probability of a rebound in H2 in the relative US performance. At the present levels, the execution on just one of such points can result in share appreciation over the upcoming months, added Wedbush.
Flutter Entertainment plc (NYSE:FLUT) is a sports betting and gaming company.
4. Salesforce, Inc. (NYSE:CRM)
Average Upside Potential: ~59%
Forward EPS Long-term Growth (3-5 Year CAGR): ~16%
Number of Hedge Fund Holders: 101
Salesforce, Inc. (NYSE:CRM) is one of the Stocks with Potential to Explode in 2026. On June 16, analyst Scott Berg of Needham maintained a “Buy” rating on the company’s stock, retaining the price objective of $400.00. The analyst’s rating is backed by factors related to Salesforce, Inc.’s recent move. The $3.6 billion acquisition of Fin is expected to be a value-enhancing step, adds the analyst, while strengthening the company’s Agentforce360 capabilities throughout a broad range of digital channels. Notably, Fin’s previous growth re-acceleration continues to demonstrate customer demand.
To provide a brief background, while announcing the acquisition, Salesforce, Inc. highlighted that this transaction builds on the strength of Agentforce, which touched $1.2 billion in ARR in Q1 2027 (up 205% YoY), with Fin’s packaged offerings as well as proprietary models complementing Agentforce’s deeply customizable platform.
Salesforce, Inc. can use the large sales and distribution ecosystem in order to scale Fin’s platform, added the firm’s analyst.
Salesforce Inc. is a global enterprise software company that provides customer relationship management (CRM) and cloud-based business applications across sales, service, marketing, commerce, and data analytics.
3. Alibaba Group Holding Limited (NYSE:BABA)
Average Upside Potential: ~73.9%
Forward EPS Long-term Growth (3-5 Year CAGR): ~33.6%
Number of Hedge Fund Holders: 102
Alibaba Group Holding Limited (NYSE:BABA) is one of the Stocks with Potential to Explode in 2026. On June 12, Bloomberg reported that Alibaba Group Holding Limited is offering $1.5 billion to purchase Chinese grocery delivery firm, Pupu. Therefore, the company started a bidding war that’s part of a broader campaign to take the market share from the rival, Meituan.
Alibaba Group Holding Limited’s proposal came months after Meituan made an announcement about its acquisition of Dingdong Fresh Holding Ltd. for $717 million. The company’s offer highlights its focus on being a part of the battle between 3 giants of Chinese online commerce. Alibaba Group Holding Limited, Meituan, and JD.com Inc. are ramping up their efforts to dominate the local commerce and fresh produce, with increased valuations demonstrating tough competition for the scarce retail assets.
Bloomberg, while quoting Charu Chanana (chief investment strategist at Saxo Markets), noted that while the consolidation tends to filter out the weaker players, the escalating bids appear to hint at a transition away from profitability and back towards the competition to gain share.
Alibaba Group Holding Limited operates as a technology infrastructure and marketing solutions provider.
2. Vistra Corp. (NYSE:VST)
Average Upside Potential: ~50%
Forward EPS Long-term Growth (3-5 Year CAGR): ~45.4%
Number of Hedge Fund Holders: 106
Vistra Corp. (NYSE:VST) is one of the Stocks with Potential to Explode in 2026. On June 12, analyst David Arcaro of Morgan Stanley maintained a “Buy” rating on the company’s stock, retaining the price objective of $212.00. The analyst’s rating is backed by factors related to Vistra Corp.’s role in the newly formed Helix Digital Infrastructure platform.
As per the analyst, the company’s $1 billion founding investment, along with KKR, NVIDIA, and Kuwait Investment Authority, can be seen as an opportunity for high‑return, fast‑growing data center infrastructure. Furthermore, this is supported by long-term contracts with robust counterparties and a significant and expanding market opportunity.
To provide a brief background, Helix Digital Infrastructure is a new company focused on offering integrated infrastructure at the speed and scale that’s needed for hyperscalers to cater to increased AI demand.
The analyst also noted Vistra Corp.’s strategic advantage as Helix’s preferred power provider. This can help ramp up contracting for the company’s existing generation fleet and utilize the development, power access, and hyperscaler relationships.
Vistra Corp. conducts its operations as an integrated retail electricity and power generation company.
1. Rocket Companies, Inc. (NYSE:RKT)
Average Upside Potential: ~50%
Forward EPS Long-term Growth (3-5 Year CAGR): ~66.8%
Number of Hedge Fund Holders: 112
Rocket Companies, Inc. (NYSE:RKT) is one of the Stocks with Potential to Explode in 2026. On June 16, BTIG downgraded the company’s stock to “Neutral” from “Buy” as the stock’s present valuation is reflecting the premium nature of the platform. Therefore, there is less room for relative upside. As per the analyst Douglas Harter, Rocket Companies, Inc.’s direct-to-consumer brand, large servicing platform, Redfin platform, as well as its technology, can continue to help take market share.
Furthermore, Rocket Companies, Inc.’s technology would also enable the company to scale the business efficiently and improve the operating margins, added Harter. The analyst noted that the company’s stock trades at a premium valuation relative to the mortgage peers, and this is expected to continue because of its historical leadership position and continued technology investments.
The risk to the rating on the company’s stock is if the interest rates fall. If this happens, while all the mortgage originators are expected to benefit, Rocket Companies, Inc. will see expansion of the premium valuation.
Rocket Companies, Inc. is a fintech company that is engaged in the mortgage, real estate, and personal finance businesses.
READ NEXT: 10 Best FMCG Stocks to Invest In According to Analysts and 11 Best Long-Term Tech Stocks to Buy According to Analysts.
