In this article, we discuss the 11 Best Rebound Stocks to Buy According to Hedge Funds.
Following ongoing market uncertainty over tariffs and inflation, U.S. equities climbed to record highs on August 12, 2025, injecting a dose of optimism. A cooler-than-expected inflation report came out, reigniting hopes of the Federal Reserve’s interest rate cut, which is expected to occur as soon as September. This sets the stage for a potential rebound in stocks that have suffered in 2025 so far.
An increase of 1.13% was noted for the S&P 500, which closed at 6,445.76. Meanwhile, the Nasdaq Composite climbed 1.39% to close at 21,681.90. Similarly, the Dow Jones Industrial Average rose by 483 points, with small-cap stocks, which are the biggest beneficiaries of lower borrowing costs, leading the charge. Interestingly, the Russell 2000 nearly tripled the S&P’s gains. While core CPI increased by 3.1% year-over-year, slightly exceeding expectations, investors remained focused on the overall CPI, which remained softer. Furthermore, the absence of major tariff-related price spikes fueled the optimism.
According to CME FedWatch data, the probability of rate cuts in September now stands at 94%. Looking beyond September, investors are now expecting cuts later in the year as well.
Thus, the improving macroeconomic dynamics could potentially act as a catalyst for quality rebound stocks, helping them recover losses and potentially deliver significant gains. With this backdrop in mind, let’s move on to our list of the 11 Best Rebound Stocks to Buy According to Hedge Funds.
A CEO in his office overlooking a sky-scraper skyline, symbolising the company’s ambition for growth in the market.
Our Methodology
To curate our list of the 11 Best Rebound Stocks to Buy According to Hedge Funds, we used the Finviz screener to extract a list of companies that are down on a year-to-date basis. Next, we ranked these stocks in ascending order based on the number of hedge funds holding stakes in each stock, as of Q1 2025. We assessed the hedge fund sentiment across the stocks using Insider Monkey’s hedge fund database, which tracks over 1,000 hedge funds.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
11. KKR & Co. Inc. (NYSE:KKR)
Year-To-Date Decline in Share Price: 0.46%
Number of Hedge Fund Holders: 88
With a year-to-date decline in share price, along with strong hedge fund interest, KKR & Co. Inc. (NYSE:KKR) secures a place on our list of the 11 Best Rebound Stocks to Buy According to Hedge Funds.
Following the company’s second-quarter earnings release, Barclays raised its price target on KKR & Co. Inc. (NYSE:KKR) from $155 to $165 on August 1, 2025, maintaining an ‘Overweight’ rating. The company’s EPS beat boosted the analyst’s confidence. While the analyst acknowledged the company’s cautious second-half guidance, the long-term growth outlook remains strong.
Meanwhile, on August 4, 2025, KBW reiterated its ‘Buy’ rating on KKR & Co. Inc. (NYSE:KKR) with a $162 target. The analyst remains confident in the company’s growth trajectory, following strong Q2 results. Despite short-term uncertainties, analyst sentiment remains positive, thanks to the company’s diversified investment strategy.
Specializing in acquisitions, leveraged buyouts, and growth equity, KKR & Co. Inc. (NYSE:KKR) operates as a private equity and real estate investment firm. It is included in our list of the Best Rebound Stocks To Buy.
10. The Procter & Gamble Company (NYSE:PG)
Year-To-Date Decline in Share Price: 7.64%
Number of Hedge Fund Holders: 88
The Procter & Gamble Company (NYSE:PG) is included in our list of the 11 Best Rebound Stocks to Buy According to Hedge Funds.
Following the company’s fourth-quarter results, UBS reiterated its ‘Buy’ rating with a $180 price target on July 30, 2025. The Procter & Gamble Company (NYSE:PG)’s underlying sales growth guidance of 2.5%-4.5%, alongside EPS growth of 5%-7%, fueled the analyst’s optimism. This update comes despite a post-earnings pullback driven by one-time pressures, which include a Mexico joint venture exit and normalized incentive compensation.
Looking ahead, the analyst keeps its bullish stance due to improving U.S. local case volumes and long-term growth potential through sales force expansion, AI 360 CRM, pricing agility, and Perks 2.0. Meanwhile, on the same day, Truist Financial also maintained its ‘Buy’ rating on The Procter & Gamble Company (NYSE:PG). In contrast, Barclays maintained its ‘Hold’ rating on the company on July 29, reflecting a more cautious stance.
The Procter & Gamble Company (NYSE:PG) offers branded consumer packaged goods globally, serving beauty, grooming, health care, fabric & home care, and baby, feminine & family care segments. It is included in our list of the Best Rebound Stocks To Buy.
9. Exxon Mobil Corporation (NYSE:XOM)
Year-To-Date Decline in Share Price: 1.35%
Number of Hedge Fund Holders: 94
With a year-to-date decline in share price, along with strong hedge fund interest, Exxon Mobil Corporation (NYSE:XOM) secures a place on our list of the 11 Best Rebound Stocks to Buy According to Hedge Funds.
On August 8, 2025, Goldman Sachs maintained its ‘Neutral’ rating on Exxon Mobil Corporation (NYSE:XOM) with a $117 price target. The cautious stance is attributed to broader macroeconomic concerns. Uncertainty stems from under-pressure sectors such as paper and pulp, where North American volumes slid 6% excluding a Georgetown mill closure.
The investment firm believes the global economic uncertainties could impact energy demand, alongside other cyclical industries. At the same time, Goldman Sachs remains confident in Exxon Mobil Corporation (NYSE:XOM)’s fundamentals, recognizing its scale and resilience.
Operating through its Upstream, Energy Products, Chemical Products, and Specialty Products segments, Exxon Mobil Corporation (NYSE:XOM) is engaged in the exploration and production of crude oil and natural gas globally. It is included in our list of the Best Rebound Stocks To Buy.
8. Thermo Fisher Scientific Inc. (NYSE:TMO)
Year-To-Date Decline in Share Price: 8.39%
Number of Hedge Fund Holders: 101
Thermo Fisher Scientific Inc. (NYSE:TMO) is included in our list of the 11 Best Rebound Stocks to Buy According to Hedge Funds.
Backed by the company’s strong momentum across several key business segments, Wells Fargo reaffirmed its ‘Buy’ rating on Thermo Fisher Scientific Inc. (NYSE:TMO) on July 28, 2025. For Q2 2025, the company recorded strong growth across its Pharma Services, Bioproduction, and the Research/Safety Channel segments. The Research/Safety Channel segment saw TMO outperform its competitors, such as Avantor, with strong market share gains.
The analyst acknowledged softness in the Analytical Instruments segment; however, the quarter’s overall strong performance fueled optimism. Looking ahead, the analyst believes Thermo Fisher Scientific Inc. (NYSE:TMO)’s diversified portfolio and increasing market share will drive its growth.
Thermo Fisher Scientific Inc. (NYSE:TMO) delivers life science solutions, alongside analytical instruments, specialty diagnostics, and laboratory products. It is included in our list of the Best Rebound Stocks To Buy.
7. Tesla, Inc. (NASDAQ:TSLA)
Year-To-Date Decline in Share Price: 16.47%
Number of Hedge Fund Holders: 104
With a year-to-date decline in share price, along with strong hedge fund interest, Tesla, Inc. (NASDAQ:TSLA) secures a place on our list of the 11 Best Rebound Stocks to Buy According to Hedge Funds.
Tesla, Inc. (NASDAQ:TSLA) is making progress on its autonomous ambitions as the Texas Department of Licensing and Regulation released a permit for its Tesla Robotaxi LLC, recognizing it as a transportation network company. With this permit, Tesla is set to expand beyond Austin, challenging Uber, Lyft, and Waymo. The permit is valid until August 6, 2026, providing Tesla with a year to scale.
However, following the approval, Wells Fargo reiterated a ‘Sell’ rating with a $120 target, citing valuation concerns. Meanwhile, on August 10, Morgan Stanley reiterated its ‘Buy’ rating on Tesla, Inc. (NASDAQ:TSLA) with a $410 target. The analyst’s bullish stance is attributed to the company’s long-term growth potential.
Tesla, Inc. (NASDAQ:TSLA) manufactures and sells electric vehicles, energy generation, and storage products globally. It is included in our list of the Best Rebound Stocks To Buy.
6. ServiceNow, Inc. (NYSE:NOW)
Year-To-Date Decline in Share Price: 19.45%
Number of Hedge Fund Holders: 106
ServiceNow, Inc. (NYSE:NOW) is included in our list of the 11 Best Rebound Stocks to Buy According to Hedge Funds.
JMP Securities reiterated its ‘Market Outperform’ rating on ServiceNow, Inc. (NYSE:NOW) on August 4, 2025, with a $1,300 price target. The sentiment boost is attributed to growing confidence in the company’s AI Control Tower and its AI Agents within AI Agent Studio. ServiceNow’s innovative pipeline, coupled with its growing AI-driven capabilities, is driving its growth outlook.
The analyst acknowledged the YTD decline in ServiceNow, Inc. (NYSE:NOW)’s shares and yet believes that the company’s AI product advancements position it well to reaccelerate growth and boost its presence in enterprise digital transformation.
ServiceNow, Inc. (NYSE:NOW) delivers cloud-based digital workflow solutions globally with its Now platform. It is included in our list of the Best Rebound Stocks To Buy.
5. Intuitive Surgical, Inc. (NASDAQ:ISRG)
Year-To-Date Decline in Share Price: 8.56%
Number of Hedge Fund Holders: 106
With a year-to-date decline in share price, along with strong hedge fund interest, Intuitive Surgical, Inc. (NASDAQ:ISRG) secures a place on our list of the 11 Best Rebound Stocks to Buy According to Hedge Funds.
Following the company’s da Vinci 5 surgical system’s entry into the broad U.S. launch phase, Bernstein raised its price target on Intuitive Surgical, Inc. (NASDAQ:ISRG) to $685 from $675 on July 23, 2025, maintaining an ‘Outperform’ rating.
This price revision follows robust second-quarter results, where Intuitive Surgical, Inc. (NASDAQ:ISRG) recorded 21% revenue growth and a 23% EPS surge. Revenue reached $2.44 billion, while adjusted EPS climbed to $2.19, both exceeding consensus estimates.
Furthermore, global da Vinci procedures recorded a 17% growth, while system placements increased by 147 units in the previous quarter to 180 units in Q2. Gross and operating margins also surpassed consensus by 160 and 400 basis points, respectively. Meanwhile, recent regulatory approvals in Japan and Europe helped Intuitive Surgical, Inc. (NASDAQ:ISRG) raise its 2025 procedure and gross margin guidance, justifying Bernstein’s bullish stance.
Intuitive Surgical, Inc. (NASDAQ:ISRG) offers products that help healthcare providers improve minimally invasive care quality. It is included in our list of the Best Rebound Stocks To Buy.
4. Adobe Inc. (NASDAQ:ADBE)
Year-To-Date Decline in Share Price: 24.16%
Number of Hedge Fund Holders: 111
Adobe Inc. (NASDAQ:ADBE) is included in our list of the 11 Best Rebound Stocks to Buy According to Hedge Funds.
Melius Research downgraded Adobe Inc. (NASDAQ:ADBE) from ‘Hold’ to ‘Sell’ on August 11, 2025, setting a $310 price target. The analyst believes that the software-as-a-service segment is under pressure due to the AI surge, reshaping the competitive landscape.
Furthermore, Melius Research expects infrastructure companies to benefit from the AI transformation at the expense of application-focused companies such as Adobe Inc. (NASDAQ:ADBE). The investment firm expects margin pressures and slower growth in the company’s core segments, thereby lowering its 2026 and 2027 earnings estimates.
While Adobe Inc. (NASDAQ:ADBE) remains a leader in creative and digital experience software, the analyst’s outlook indicates caution for investors.
Operating through its Digital Media, Digital Experience, and Publishing and Advertising segments, Adobe Inc. (NASDAQ:ADBE) operates as a technology company globally. It is included in our list of the Best Rebound Stocks To Buy.
3. Danaher Corporation (NYSE:DHR)
Year-To-Date Decline in Share Price: 10.57%
Number of Hedge Fund Holders: 117
With a year-to-date decline in share price, along with strong hedge fund interest, Danaher Corporation (NYSE:DHR) secures a place on our list of the 11 Best Rebound Stocks to Buy According to Hedge Funds.
On July 23, 2025, Wells Fargo reduced its price target on Danaher Corporation (NYSE:DHR) from $210 to $205, maintaining an ‘Equal Weight’ rating. This price revision follows the company’s quarterly results. DHR delivered a solid EPS beat and upward guidance revision during the quarter. Furthermore, the investment firm noted that the company held an additional $0.15-$0.20 per share in reserve.
Expectations for a robust recovery stemming from ongoing strength in the company’s Bioprocess segment further fueled the analyst’s optimism. Additionally, the Life Science segment is expected to record improvement in the second half of the year. At the same time, positive trends in the Pharma segment and growing momentum in China are driving analyst sentiment.
Danaher Corporation (NYSE:DHR) offers professional, medical, research, and industrial products and services with its Biotechnology, Life Sciences, and Diagnostics segments. It is included in our list of the Best Rebound Stocks To Buy.
2. Eli Lilly and Company (NYSE:LLY)
Year-To-Date Decline in Share Price: 17.39%
Number of Hedge Fund Holders: 119
Eli Lilly and Company (NYSE:LLY) is included in our list of the 11 Best Rebound Stocks to Buy According to Hedge Funds.
On August 8, 2025, JPMorgan maintained its ‘Overweight’ rating on Eli Lilly and Company (NYSE:LLY) with a $1,100 price target. This target boost follows the company’s Q2 results. While investor sentiment weakened over Phase 3 trial data for Orforglipron, which recorded an efficacy of 1-2 percentage points, roughly 2-4 pounds below expectations, the investment firm believes it has minimal long-term impact.
Furthermore, JPMorgan expressed confidence in Orforglipron, the company’s oral obesity drug candidate, believing that the drug’s prospects remain solid. Looking ahead, the investment firm backs its optimism with Eli Lilly and Company (NYSE:LLY)’s significant ramp-up, which is expected in the second half of 2026 and beyond. Thus, the company remains well-positioned to capture demand in the fast-growing obesity market.
Eli Lilly and Company (NYSE:LLY) specializes in treatments for diabetes, obesity, and other health conditions. It is included in our list of the Best Rebound Stocks To Buy.
1. Apple Inc. (NASDAQ:AAPL)
Year-To-Date Decline in Share Price: 8.01%
Number of Hedge Fund Holders: 159
With a year-to-date decline in share price, along with strong hedge fund interest, Apple Inc. (NASDAQ:AAPL) secures a place on our list of the 11 Best Rebound Stocks to Buy According to Hedge Funds.
On August 12, 2025, Apple Inc. (NASDAQ:AAPL) announced new releases in its Apple Arcade segment, reinforcing its strategy to grow recurring revenue streams beyond hardware sales. As per the announcement, NFL Retro Bowl ’26 will release on September 3, featuring a new Championship Leadership mode, which is synced with real NFL matchups. Also, Jeopardy! Daily and My Talking Tom Friends+ will be released the same day. Featuring new characters and quests, Hello Kitty Island Adventure will launch its “Wheatflour Wonderland” update later in the month.
Looking ahead, Apple Inc. (NASDAQ:AAPL)’s long-term growth strategy is driven by its Apple Arcade’s evolving catalog, offering over 200 ad-free games.
Across its products like iPhone, iPad, Mac, and Apple TV, Apple Inc. (NASDAQ:AAPL) offers unlimited access to over 200 premium, ad-free games through its subscription-based gaming service, Apple Arcade. It is included in our list of the Best Rebound Stocks To Buy.
While we acknowledge the potential of AAPL 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 AAPL and that has 100x upside potential, check out our report about this cheapest AI stock.
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