In this article, we discuss 11 Best Breakout Stocks to Buy According to Analysts.
Stock markets have been on edge in response to the US President’s aggressive trade war that has resulted in trade tariffs aimed at settling the trade deficit. Likewise, stocks remain on edge, with the US president ramping up attacks against the Federal Reserve Chair Jerome Powell raising serious concerns about the central bank’s independence.
Trump has been on Powell’s neck over what he terms as laxity in cutting interest rates at a time when major central banks led by the European Central Bank and Bank of Canada have cut significantly. In posts on his social network Trust Social, Trump has always insisted that the US economy would slow unless Powell, who he has always deemed as “Mr. Too Late, a major loser,” cut rates.
The remarks come against the backdrop of major indices pulling back significantly from record highs as stocks remain under pressure across various sectors. The S&P 500 has already closed on the negative for the 3rd straight month, waiting to see if the selloff will persist. The last time the index closed negative for 4 straight months was in 2011.
While a negative, the sell-off has presented unique investment opportunities as valuations have pulled back significantly from historical highs. Likewise, the pullback has given rise to solid breakout plays as the selloff dust slowly settles. Nearly two-thirds of the S&P 500 stocks have posted first-quarter 2025 results that have topped estimates. Strong quarterly results from some of the big tech giants are helping alleviate concerns about the potential impact of Trump’s tariffs. Likewise, the solid earnings have once again eased concerns that the artificial intelligence progress has slowed amid economic turmoil triggered by the trade war.
“Few stocks are truly immune to Trump tariffs [and] trade war, but AI is a lot less impacted than investors currently believe,” said Jed Ellerbroek, portfolio manager at Argent Capital Management. “We’re early in a very steep growth curve right now, and that goes for AI infrastructure.”
China signaling it is evaluating the possibility of starting trade negotiations with the US is a positive for the markets under pressure. The remarks come at a time when the Trump administration is increasingly targeting quick wins with major trading partners. The prospects of a trade agreement between the US and China should be a catalyst to trigger a significant bounce back after months of deep sell-offs.
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Our Methodology
To compile a list of 11 Best Breakout Stocks to Buy According to Analysts, we analyzed the holdings of the IBD Breakout Opportunities ETF. We then settled on 11 companies backed by solid underlying fundamentals and well poised to breakout, according to analysts, once the sell off dust in the equity markets settles. Finally, we ranked these stocks in ascending order based on analysts’ upside potential (as of May 2).
At Insider Monkey, we are obsessed with 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
11 Best Breakout Stocks to Buy According to Analysts
11. Tarsus Pharmaceuticals, Inc. (NASDAQ:TARS)
Stock Upside Potential as of May 2: 34.45%
Number of Hedge Fund Holders: 32
Tarsus Pharmaceuticals, Inc. (NASDAQ:TARS) is a biopharmaceutical company that develops and commercializes therapeutics, primarily emphasizing eye care. Their lead product, XDEMVY, is an FDA-approved treatment for Demodex blepharitis. It also explores TP-04 for ocular rosacea and TP-05 for Lyme disease and malaria prevention. While the stock is down by about 8% year-to-date, it is one of the best breakout stocks to buy, according to analysts.
Tarsus Pharmaceuticals, Inc.’s (NASDAQ:TARS) long-term prospects hinge on XDEMVY, an eye treatment that is gaining significant traction among Eye Care Professionals (ECPs). Over 11,000 ECPs have prescribed the treatment, affirming broad market adoption and penetration, expected to fuel long-term revenue growth. The treatment option has been the catalyst behind the company’s sales surging by over 900% over the past 12 months.
In the first quarter of 2025, revenues nearly tripled to $78.34 million compared to $27.61 million for the same quarter last year. While the focus has been XDEMVY, Tarsus is also looking to diversify its revenue base with increased emphasis on Meibomian Gland Dysfunction (MGD) treatments.
10. The GEO Group, Inc. (NYSE:GEO)
Stock Upside Potential as of May 2: 42.04%
Number of Hedge Fund Holders: 39
The GEO Group, Inc. (NYSE:GEO) is a protection and Services Company that owns, leases, operates and manages secure facilities, processing centers, and community-based reentry facilities. Likewise, it is one of the best breakout stocks to buy, according to analysts, as it benefits from President Donald Trump’s immigration policies.
As the Trump administration ramps up detentions and deportations of immigrants in the US, Geo Group has emerged as the go-to company. The company is increasingly ramping up millions from the federal government on offering facilities used to hold people before they are deported. Late last year, it committed to investing $70 million in capital expenditures in anticipation of booming business from the federal government.
The GEO Group, Inc. (NYSE:GEO) has signed a 15-year contract with ICE to offer 1,000 beds at its Delaney Hall Facility in New Jersey. The contract is expected to add up to $60 million in annual revenue. It has also signed an 1800-bed facility contract with ICE in Michigan, which is expected to generate up to $70 million in yearly revenue. The wave of Federal contracts underscores why the stock is rated as a Buy at Jones Trading with a $55 price target.
9. CBIZ, Inc. (NYSE:CBZ)
Stock Upside Potential as of May 2: 46.01%
Number of Hedge Fund Holders: 18
CBIZ, Inc. (NYSE:CBZ) is a professional services company that provides businesses and individuals with a wide range of financial and insurance services. It specializes in accounting, tax, advisory, benefits, insurance, and technology solutions, helping clients manage risk, attract talent, and drive growth. The company delivered strong first-quarter 2025 results characterized by earnings and cash flow growth in varying business climates.
CBIZ, Inc. (NYSE:CBZ) recorded a revenue of $838 million, representing a 69.5% year-over-year increase. Net income in the quarter surged to $122.8 million or $1.91 a share compared to $76.9 million or $1.53 a share delivered the same quarter a year ago. The better-than-expected results came even on the economic and geopolitical environment impacting non-recurring service lines.
Nevertheless, CBIZ, Inc. (NYSE:CBZ) remains in a solid position to shrug off the headwinds as the seventh-largest accounting service provider in the US. The acquisition of Marcum LLP last year continues to strengthen the company’s competitive edge as a leading provider of professional services.