In this article, we will take a look at the best stocks in each sector in 2026.
As we step into 2026, investors are increasingly seeking clarity in a complex market landscape. With several sectors to play and plenty of stock opportunities, it has become rather difficult to identify companies that offer resilience, long-term potential, and strong fundamentals – all of which make them the best stocks.
With a shift in the AI narrative, investors have become skeptical of a number of sectors, including software. According to BlackRock’s weekly commentary, dated February 17, the recent software selloff points to the market’s acceptance of AI’s disruptive influence, with a focus on underperforming names.
What’s ironic is that a previous debate on AI’s realism has now transformed to whether AI acts as a potential threat to business models, the authors noted, adding that the market is now examining companies most exposed to AI disruption. As stated,
“What has changed is the market’s focus: it now asks how AI adoption will translate into revenues and profits. This sorting of winners and losers means it’s prime time for active investing.”
The commentary advances by naming five mega forces that influence investment decisions, creating key risks and opportunities for investors. These are demographic divergence, digital disruption and AI, geopolitical fragmentation and economic competition, the future of finance, and transition to a low-carbon economy.
Against this backdrop, we have compiled a list of the 11 best stocks in each sector in 2026.
Photo by jason briscoe on Unsplash
Our Methodology
For this article, we began by sorting companies in each sector by market capitalization. Next, we selected the top twelve companies in each sector and narrowed the list to stocks with the highest hedge fund holdings, based on Insider Monkey’s database as of Q3 2025. The final picks are the stocks from each sector with the greatest upside potential.
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).
11. CBRE Group, Inc. (NYSE:CBRE)
Number of Hedge Fund Holders: 71
Upside Potential as of February 23, 2026: 29.70%
Sector: Real Estate
On February 12, Raymond James maintained an Outperform rating on CBRE Group, Inc. (NYSE:CBRE) with a price target of $180, which suggests an upside potential of approximately 25%. The firm said that AI-driven displacement of white-collar employment is neither a short-term challenge nor an unavoidable outcome, as it provided clarity on concerns regarding a potentially pressurized office leasing activity.
As the firm argued, office leasing accounts for roughly 10% of the company’s total net revenue, asserting that the office market is actually seeing improving pipelines and higher utilization. Thus, AI disruption is, in reality, a tangible opportunity for CBRE Group, Inc. (NYSE:CBRE), assisting management and project management mandates, along with data center demand transaction trends, the firm said, adding that it views the “near-zero risk” of AI disintermediating any of its divisions.
On the same day, Barclays reaffirmed an Overweight rating and $192 price target on CBRE Group, Inc. (NYSE:CBRE). The firm is optimistic about the company’s strength across business segments and acquisition capabilities.
CBRE Group, Inc. (NYSE:CBRE) is a Texas-based commercial real estate services and investment company operating through Advisory Services, Building Operations and Experience, Project Management, and Real Estate Investments segments.
10. The Williams Companies, Inc. (NYSE:WMB)
Number of Hedge Fund Holders: 73
Upside Potential as of February 23, 2026: 6.88%
Sector: Energy
On February 17, UBS lifted the price target on The Williams Companies, Inc. (NYSE:WMB) to $89, up from $78, and reiterated a Buy rating. With the highest 1-year price target among analysts, the firm’s estimate reflects an upside potential of 21.95%.
In a research note, the analyst notes that the company is among the best-levered midstream operators, thanks to a roughly $7.3 billion power generation backlog that positions it well to benefit from rising natural gas demand. This will positively impact its Power Innovation business in particular. With expectations to generate nearly $1.4 billion in annual EBITDA by 2029, The Williams Companies, Inc. (NYSE:WMB) has around 1.9 GW of power opportunities in execution by 2028, the firm noted, adding that from 2027 to 2031, the company has reported a backlog of roughly 6 gigawatts.
On the same day, Jefferies increased the price target on The Williams Companies, Inc. (NYSE:WMB) to $81 from $78 and reiterated a Buy rating. This comes after a “strong” analyst day update. The firm expects the company to sustain its over 10% EBITDA trajectory in 2030 and onwards.
The Williams Companies, Inc. (NYSE:WMB) is an Oklahoma-based energy infrastructure company operating through Transmission & Gulf of America, Northeast G&P, West, and Gas & NGL Marketing Services segments.
9. Booking Holdings Inc. (NASDAQ:BKNG)
Number of Hedge Fund Holders: 95
Upside Potential as of February 23, 2026: 52.87%
Sector: Consumer Cyclical
On February 24, Morgan Stanley upgraded Booking Holdings Inc. (NASDAQ:BKNG) to Overweight from Equal Weight, with a price target of $5,500.
Earlier on February 18, Booking Holdings Inc. (NASDAQ:BKNG) announced its fourth-quarter earnings, delivering results that outperformed expectations. The company reported an adjusted EPS of $48.80 and a revenue of $6.35 billion, surpassing forecasts by $0.61 and $0.23 billion, respectively.
“We are pleased to report strong results for 2025, delivering double-digit revenue growth, expanding Adjusted EBITDA margin by 193 basis points, and accelerating room night growth in every quarter,” expressed Glenn Fogel, Chief Executive Officer of Booking Holdings Inc. (NASDAQ:BKNG). “These results highlight the strength of our platform and the discipline of our execution.”
While room nights rose 9% relative to the same period in 2024, gross bookings surged by an impressive 16% YoY to $43 billion. Additionally, Booking Holdings Inc. (NASDAQ:BKNG)’s adjusted EBITDA grew 19% YoY to $2.2 billion for the quarter. Looking ahead, the company projects room nights growth of 5-7% and revenue growth of 14-16%.
Since the earnings announcement, the stock has declined by approximately 9%. Overall, Booking Holdings Inc. (NASDAQ:BKNG) is a consensus buy with just 19% of the analysts neutral on the stock. With a 1-year median price target of $5,917.50, the stock has an upside potential of 52.87%.
Booking Holdings Inc. (NASDAQ:BKNG) is a Connecticut-based provider of travel and restaurant reservations and related services through online and traditional platforms. Founded in 1997, the company operates platforms such as Booking.com, Priceline, Agoda, and KAYAK.
8. CRH plc (NYSE:CRH)
Number of Hedge Fund Holders: 102
Upside Potential as of February 23, 2026: 16.28%
Sector: Materials
On February 19, Prieto Luis, an analyst at Kepler Capital, reiterated a Buy rating on CRH plc (NYSE:CRH) and set a price target of GBp 10,500.00.
A day earlier, CRH plc (NYSE:CRH) reported its fourth-quarter financial figures, delivering earnings that missed street estimates despite posting record full-year results. With an adjusted EPS of $1.52, the company lagged the $1.54 consensus estimate.
Additionally, CRH plc (NYSE:CRH)’s total revenues grew 6% YoY to $9.4 billion, and net income increased 46% to $1.0 billion. While adjusted EBITDA of $2.0 billion was up 14%, margins expanded 150 basis points to 21.5%. According to CEO Jim Mintern, 2025 was a year of substantial progress for the company as it achieved “double-digit Adjusted EBITDA growth and a 12th consecutive year of margin expansion,” and subsequently allocated funds. As stated by Mintern,
“Our balance sheet strength, cash generation capabilities and disciplined approach to capital allocation enabled us to deploy $5.8 billion in value-accretive growth investments.”
Looking ahead, CRH plc (NYSE:CRH) anticipates positive underlying demand across key end-markets, which is backed by massive public infrastructure investment and sustained reindustrialization activity.
CRH plc (NYSE:CRH) is an Ireland-based provider of building materials solutions, including aggregates, cement, ready mixed concrete and mortars, and asphalt. Founded in 1936, the company operates through three segments: Americas Materials Solutions, Americas Building Solutions, and International Solutions.
7. Walmart Inc. (NASDAQ:WMT)
Number of Hedge Fund Holders: 104
Upside Potential as of February 23, 2026: 9.69%
Sector: Consumer Defensive
On February 20, TheFly reported that Bernstein lifted the price target on Walmart Inc. (NASDAQ:WMT) to $134, up from $129, and maintained an Outperform rating. The firm highlighted the company’s modest beat in the fourth quarter, while advising to buy the company’s shares on weakness.
Several other analysts have revised their outlook for the company recently. Truist Securities increased the price target on Walmart Inc. (NASDAQ:WMT) from $127 to $139 and reiterated a Buy rating on February 20. The firm noted the company’s fourth-quarter performance, with U.S. comparable sales 0.1% above its forecasts. Thanks to the accelerating e-commerce profitability and expanding alternative revenue streams, every segment showcased strong growth and margin expansion. According to the firm, the company’s business model is among the real asset plays in the market and one that is highly profitable.
On the same day, DA Davidson analyst Michael Baker said that the company’s flywheel strategy is generating market share gains, and thus the reason behind its recent performance. The firm raised the price target on Walmart Inc. (NASDAQ:WMT) to $150 from $135 and reaffirmed a Buy rating.
Walmart Inc. (NASDAQ:WMT) is an Arkansas-based operator of retail and wholesale stores and clubs, eCommerce websites, and mobile apps. Incorporated in 1945, the company operates through three segments: Walmart U.S., Walmart International, and Sam’s Club.
6. The Boeing Company (NYSE:BA)
Number of Hedge Fund Holders: 106
Upside Potential as of February 23, 2026: 16.14%
Sector: Industrials
On February 23, Bank of America Securities analyst Ronald Epstein reaffirmed a Buy rating and a $270 price target on The Boeing Company (NYSE:BA).
The Boeing Company (NYSE:BA), along with Air Astana JSC, announced on February 17 that the Kazakhstan flag carrier has secured an order for up to 15 787 Dreamliner jets to enhance its Boeing widebody fleet. The deal, which was earlier disclosed as a commitment in November last year, is Air Astana’s biggest single airplane purchase.
Earlier on February 2, Bernstein SocGen Group reiterated an Outperform rating on The Boeing Company (NYSE:BA) with a price target of $298, which translates to an upside potential of approximately 29%. This reaffirmation came after the company’s Q4 earnings results were reported on January 27.
In the fourth-quarter, The Boeing Company (NYSE:BA) delivered revenue of $23.9 billion, outperforming the street forecasts of $22.3 billion. This strong performance was supported by its Defense, Space & Security (BDS) division. According to Bernstein, the company’s financial outlook incorporates various factors, which it believes are creating a “complicated” financial picture for investors, emphasizing cash flow dynamics. Although the airline’s shares witnessed a dip following the results, the firm sees this as a “buying opportunity” and asserts that the “case for Boeing is just as strong” even with “a complicated 2026.”
The Boeing Company (NYSE:BA) is a Virginia-based provider of commercial jetliners, military aircraft, satellites, and missile defense, among others. Founded in 1916, the company operates through three segments: Commercial Airplanes, Defense, Space & Security, and Global Services.
5. AppLovin Corporation (NASDAQ:APP)
Number of Hedge Fund Holders: 110
Upside Potential as of February 23, 2026: 83.91%
Sector: Communication Services
On February 12, Omar Dessouky from BofA reduced the price target on AppLovin Corporation (NASDAQ:APP) to $705, down from $780, and maintained a Buy rating. This follows the company’s earnings call, after which the firm reduced its valuation due to de-rating in the broader sector and a cooling e-commerce growth trajectory. The bullish stance, on the other hand, is because the company has “significant valuation support driven by its dominant gaming biz,” the analyst asserted.
On the same day, Piper Sandler noted that AppLovin Corporation (NASDAQ:APP) reported a “clean beat & raise” for Q4, highlighting that EBITDA figures came in at mid-single digits higher than street estimates. The firm trimmed its price target on the company to $650 from $800 and reiterated an Overweight rating.
All thanks to the strong gaming market and e-commerce trends, the company’s Q1 revenue guidance of 5-7% QoQ growth outperforms the same period last year, the analyst said, adding that AppLovin Corporation (NASDAQ:APP) has consistently engaged in investments to develop standout products across both sides of its business.
AppLovin Corporation (NASDAQ:APP) is a California-based company that provides software platforms for developers to enhance the marketing and monetization of their content. Founded in 2011, the company operates through two segments: Advertising and Apps.
4. Vistra Corp. (NYSE:VST)
Number of Hedge Fund Holders: 112
Upside Potential as of February 23, 2026: 40.64%
Sector: Utilities
On February 13, Shahriar Pourreza, an analyst at Wells Fargo, reaffirmed a Buy rating and a price target of $236 on Vistra Corp. (NYSE:VST). In line with the consensus estimate, the firm’s estimate reflects an upside potential of 40.64%.
Three days earlier, Investing.com reported that UBS had updated its Top Picks list, adjusting its holdings in the industrials, energy, and utilities sectors. Overall, the firm’s strategy remains “Attractive” on U.S. equities. On the utilities front, the firm added Vistra Corp. (NYSE:VST) shares and offloaded NextEra Energy. William Appicelli, an analyst at UBS, maintained a Buy rating on the company, with a $233 price target, on February 5.
Separately, on February 6, Goldman Sachs lifted the price target on Vistra Corp. (NYSE:VST) to $205 from $200 and upgraded the stock from Neutral to Buy. The investment bank believes that the stock’s 12% YTD decline and 35% drop from the record high present a buying opportunity. What further fuels optimism is the power purchase agreement (PPA) with Meta.
Vistra Corp. (NYSE:VST) is a Texas-based integrated retail electricity and power generation company. Founded in 1882, the company offers electricity and natural gas solutions to a range of customers, including residential, commercial, and industrial customers.
3. Thermo Fisher Scientific Inc. (NYSE:TMO)
Number of Hedge Fund Holders: 121
Upside Potential as of February 23, 2026: 29.73%
Sector: Healthcare
On February 9, Matt Larew, an analyst at William Blair, reiterated a Buy rating on Thermo Fisher Scientific Inc. (NYSE:TMO). Blair is among the 90% of analysts bullish on the stock, with the remaining 10% neutral. The 1-year median price target of $670 translates to an upside potential of 29.73%.
On January 30, Stifel maintained its Buy rating and $700 price target on Thermo Fisher Scientific Inc. (NYSE:TMO). This reaffirmation was attributed to the company’s solid performance at the end of the past year. According to the firm, the company is one of the few companies in the healthcare sector that hadn’t disclosed results in advance before delivering a “solid beat” for the last quarter.
Perhaps even more noteworthy is Thermo Fisher Scientific Inc. (NYSE:TMO)’s exposure to the biopharma segment, which the firm believes could accelerate growth into the mid-single digits range. The segment accounts for nearly 60% of the giant’s revenues. Stifel is positive about the company’s potential for high-single-digit EPS growth, with further upside expected from the Clario acquisition, once it completes.
Thermo Fisher Scientific Inc. (NYSE:TMO) is a Massachusetts-based provider of a range of solutions, including life sciences, analytical instruments, and specialty diagnostics. Incorporated in 1956, the company offers its products and services through third-party distributors, electronic commerce, and a direct sales force.
2. Oracle Corporation (NYSE:ORCL)
Number of Hedge Fund Holders: 122
Upside Potential as of February 23, 2026: 94.61%
Sector: Technology
As of February 23, Oracle Corporation (NYSE:ORCL) is a buy according to 77% of analysts covering the stock. While the price target ranges from $155 to $400, the 1-year median price target reflects an upside potential of 94.61%.
Among those bullish on the stock is Michael Turrin of Wells Fargo, who maintained a Buy rating on the company and set a price target of $280 on February 23.
Earlier on February 9, Bernstein SocGen Group trimmed the price target on Oracle Corporation (NYSE:ORCL) to $313 from $339, and reiterated an Outperform rating. This came after the company’s announcement of a $45 billion to $50 billion debt and equity program to finance contracts secured in 2025.
According to Bernstein, this attempt to raise capital could help Oracle Corporation (NYSE:ORCL) meet its financial needs through FY28 or longer. Having said that, the firm adjusted its model to better reflect the newly disclosed debt and equity information. Despite the downward revision in price, the firm sees the current stock level as “a solid entry point” on what it believes is “one of the few revenue and EPS acceleration stories in software.”
Oracle Corporation (NYSE:ORCL) is a Texas-based company that provides solutions for enterprise information technology environments. Incorporated in 1977, the company offers Oracle Cloud SaaS, Oracle Health applications, Oracle Cloud and on-premises licenses, and Oracle license support services.
1. Visa Inc. (NYSE:V)
Number of Hedge Fund Holders: 179
Upside Potential as of February 23, 2026: 33.11%
Sector: Financial Services
On February 17, Freedom Capital upgraded Visa Inc. (NYSE:V) to Buy from Hold, while lifting the price target to $375 from $360, according to TheFly. In a research note, the analyst called the company’s shares “cheaper” than Mastercard, saying that if Visa continues to outperform and deliver higher growth than the latter, payment network stocks may undergo a re-rating.
The upward revision follows the company’s fiscal first-quarter 2026 financial results, with revenue rising 15% YoY to $10.9 billion, outperforming estimates by 2%. Additionally, adjusted net income increased 12% YoY, lagging the revenue growth due to 16% YoY surge in operating expenses and a 100 basis point hike in the effective tax rate. The company’s share repurchase program strengthened per-share growth.
Previously, on February 10, Matthew Coad from Truist slightly trimmed the price target on Visa Inc. (NYSE:V) to $372 from $374 and maintained a Buy rating. This is part of the firm’s broader adjustment to payments companies following the fourth-quarter earnings announcements.
Visa Inc. (NYSE:V) is a leading payments technology company based in California that operates a global payments network and enables digital payments. Founded in 1958, the company serves consumers, businesses, financial institutions, and government entities in over 200 countries and territories.
While we acknowledge the potential of V 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 V and that has 100x upside potential, check out our report about this cheapest AI stock.
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