In this article, we will discuss the 11 Best Young Stocks to Invest In According to Hedge Funds.
On June 6, Stephanie Aliaga, JP Morgan Asset Management Global Market Strategist, joined ‘Closing Bell Overtime’ on CNBC to interpret the recent slide in equities, questioning whether it signifies the start of something larger or is merely a natural pullback following a significant rally. Aliaga characterized the year’s performance as a ferocious rally, particularly within the hardware complex, and noted that the semiconductor ETF had essentially doubled in the first five months of the year. She argued that these levels set a very high bar for the market, creating sensitivity as uncertainties for the second half of the year begin to percolate.
Discussing AI opportunities that are not yet fully reflected in the market, Aliaga referenced a 2002 report by Eric Mnielsen regarding the internet era, which found that for every dollar spent on computer hardware, firms spent nine dollars on complementary investments such as worker retraining, software, and reorienting workflows. While she noted the ratio for AI may differ, she emphasized that companies are in the very early innings of this broader spending. She highlighted an Atlanta Fed survey indicating that companies expect to increase AI spend per employee by 50 percent this year, a factor that she believes is not yet fully baked into market expectations.
Regarding the influx of new stock entering the market, Aliaga advised investors to buckle up for volatility as this high-profile liquidity enters the system. However, she remains optimistic by taking a broader perspective: since 1990, the number of public market companies has halved to 4,000, while structural demand from 401(k) contributions and valuation-agnostic passive inflows remains strong. She believes that the market can digest this new issuance, provided the underlying reason to invest persists.
Our Methodology
We used screeners to identify stocks that have gone public in the last 5 years, including IPOs, spin-offs, and other recent public listings, and limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. These stocks are also popular among analysts and elite hedge funds.
Note: All data was sourced on June 15.
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).
11 Best Young Stocks to Invest In According to Hedge Funds
11. SOLV Energy (NASDAQ:MWH)
Number of Hedge Fund Holders: 41
SOLV Energy (NASDAQ:MWH) is one of the best young stocks to invest in according to hedge funds. On May 12, SOLV Energy reported significant growth for Q1 2026, with revenue increasing 66% year-over-year to $677 million and Adjusted EBITDA rising 174% to $93 million. While the company recorded a net loss of $27 million, this was driven by a one-time, non-cash expense of $52 million related to legacy equity award modifications following its IPO. Excluding these impacts, the company demonstrated strong profitability, highlighted by an Adjusted Gross Margin of 18.4%.
Operational momentum remains robust, with the company’s total backlog reaching $8.2 billion and nearly 22 gigawatts currently under contract for operations and maintenance services. To further expand its footprint in the utility services sector, SOLV Energy announced the $45 million acquisition of California-based Roberson Waite Electric/RWE, which is expected to close by Q3 2026. The company also strengthened its leadership team with the appointment of Mike Adams as Vice President of Investor Relations.
Reflecting this continued strength, SOLV Energy has updated its full-year 2026 guidance, now projecting revenue between $3.720 billion and $3.820 billion. The company also anticipates full-year Adjusted EBITDA in the range of $435 million to $455 million, supported by an Adjusted Gross Margin target of 16.4% to 17.0%.
SOLV Energy provides power infrastructure services, offering engineering, procurement, construction, operations, maintenance, repowering, and grid-related solutions for utility-scale energy projects.
10. Warby Parker Inc. (NYSE:WRBY)
Number of Hedge Fund Holders: 48
Warby Parker Inc. (NYSE:WRBY) is one of the best young stocks to invest in according to hedge funds. On May 19, Warby Parker unveiled its first line of Intelligent Eyewear, scheduled for release this fall. Developed in partnership with Google and Samsung, the frames integrate Gemini and Android XR to offer contextual, real-time assistance, enabling users to manage tasks, navigate, and communicate seamlessly. The debut style, a classic rounded silhouette, is constructed from ultra-lightweight, flexible nylon in a custom dark green finish, prioritizing aesthetics and long-term comfort.
Staying true to the brand’s design heritage, the eyewear is built for all-day, everyday use. The company leveraged its extensive archives and proprietary fit data to ensure the technology feels intuitive and unobtrusive. The interior temple features a semi-translucent finish that subtly showcases the integrated tech while maintaining a streamlined look that complements various face shapes.
The upcoming collection will offer multiple optical and sun styles, supporting a wide range of prescriptions and lens preferences. By blending Warby Parker Inc.’s (NYSE:WRBY) signature aesthetic with advanced AI and mobile technology, the company aims to redefine wearable tech, emphasizing that personal expression and style remain core to the future of intelligent devices.
Warby Parker Inc. is a retailer specializing in eyewear for men and women, offering prescription glasses, sunglasses, and contact lenses. The company designs its eyewear in-house and works directly with manufacturing partners globally to produce high-quality frames at affordable prices.
9. Dutch Bros Inc. (NYSE:BROS)
Number of Hedge Fund Holders: 50
Dutch Bros Inc. (NYSE:BROS) is one of the best young stocks to invest in according to hedge funds. On May 12, Dutch Bros agreed to acquire the Phoenix East Valley franchise, a move that will add 29 locations to the company’s shop footprint. The acquisition follows the retirement of franchise owner Jim Thompson, who has been with the brand for nearly two decades. The transaction is expected to close in Q3 2026, subject to customary conditions, and was not included in the company’s previously announced 2026 guidance.
CEO Christine Barone expressed gratitude for Thompson’s leadership and commitment to the brand’s culture, noting that the company intends to build upon the foundation he established in the Phoenix market. Thompson, who oversaw the development of these shops, stated his confidence in the future of the business as it transitions to company operation.
This acquisition aligns with Dutch Bros Inc.’s (NYSE:BROS) long-term expansion strategy, which aims for 2,029 shops by 2029 as part of a broader vision to operate over 7,000 locations nationwide. The company currently manages more than 1,100 locations across the United States.
Dutch Bros Inc. is an Arizona-based company that operates and franchises drive-thru shops. Incorporated in 1992, the company operates through two segments: Company-Operated Shops and Franchising and Other.
8. Figure Technology Solutions Inc. (NASDAQ:FIGR)
Number of Hedge Fund Holders: 51
Figure Technology Solutions Inc. (NASDAQ:FIGR) is one of the best young stocks to invest in according to hedge funds. On May 11, Figure Technology reported strong Q1 2026 results, highlighted by a 113% year-over-year increase in Consumer Loan Marketplace volume to $2.9 billion. The company achieved net revenue of $167 million, up 98% from the previous year, and net income of $45 million. Adjusted EBITDA rose 192% to $83 million, reflecting the efficiency of its blockchain-native capital model.
The company’s blockchain ecosystem saw rapid expansion, supported by a record 80 new partners and the addition of Flagstar Bank to its network. Figure Technology’s volume growth was broad-based, with Figure Connect accounting for 56% of its consumer loan marketplace and significant gains in Small/Medium Business lending. As of the end of the quarter, the company maintained a strong financial position with $1.5 billion in cash and cash equivalents.
CEO Michael Tannenbaum noted that these results validate the company’s capital-light strategy and its mission to modernize legacy infrastructure through blockchain. Figure Technology Solutions Inc. continues to innovate with the announcement of Figure Forge, a platform designed to fractionalize whole loans into liquid units, further bridging real-world assets with decentralized finance.
Figure Technology Solutions Inc. is a US fintech company operating a blockchain‑native capital marketplace for loan origination, funding, and trading of tokenized assets, including consumer credit and digital asset products.
7. ABIVAX Société Anonyme (NASDAQ:ABVX)
Number of Hedge Fund Holders: 53
ABIVAX Société Anonyme (NASDAQ:ABVX) is one of the best young stocks to invest in according to hedge funds. On May 22, Abivax reported Q1 2026 financial results, highlighting a solid cash position of €491.6 million, which provides a runway into Q4 2027. R&D expenses rose to €49.5 million, largely driven by ongoing trials for new indications and Crohn’s disease, while general and administrative costs declined due to lower personnel-related expenses.
The company also released promising three-year interim data from its Study 108 trial, evaluating obefazimod in patients with ulcerative colitis. Following a de-escalation from 50 mg to 25 mg of once-daily obefazimod, 68% of patients remained in clinical remission at week 144. No new safety signals were observed, further supporting the drug’s potential as a durable, long-term treatment option.
These clinical findings reinforce the company’s progress as it continues to develop obefazimod for chronic inflammatory diseases. With its clinical programs advancing and commercial preparation underway, ABIVAX Société Anonyme remains focused on its upcoming milestones.
ABIVAX Société Anonyme is a clinical-stage biotech company that develops therapies to stabilize immune responses in chronic inflammatory diseases. Its lead candidate, obefazimod, is currently in advanced clinical trials for the treatment of ulcerative colitis and Crohn’s disease.
6. Mineralys Therapeutics Inc. (NASDAQ:MLYS)
Number of Hedge Fund Holders: 53
Mineralys Therapeutics Inc. (NASDAQ:MLYS) is one of the best young stocks to invest in according to hedge funds. On June 3, Mineralys Therapeutics announced the pricing of an underwritten public offering of ~5.66 million shares of its common stock at $26.50 per share. The company expects to generate ~$150 million in gross proceeds from the offering, which is scheduled to close on or about June 4, subject to customary closing conditions.
Mineralys Therapeutics Inc. plans to use these net proceeds to fund a significant portion of a $200 million upfront payment required to repurchase royalty obligations under its existing license agreement with Tanabe Pharma Corporation. This move follows the company’s separate announcement earlier today of a new $500 million committed debt facility with funds managed by Pharmakon Advisors, LP.
BofA Securities, Goldman Sachs & Co. LLC, and Evercore ISI are serving as the joint book-running managers for the transaction. The offering is being conducted under an existing shelf registration statement previously filed with the US Securities and Exchange Commission.
Mineralys Therapeutics Inc. develops therapeutics targeting illnesses caused by dysregulated aldosterone. It is working to develop lorundrostat, an aldosterone synthase inhibitor for cardiorenal conditions. These include chronic kidney disease, hypertension, and obstructive sleep apnea.
5. Core & Main Inc. (NYSE:CNM)
Number of Hedge Fund Holders: 55
Core & Main Inc. (NYSE:CNM) is one of the best young stocks to invest in according to hedge funds. On June 10, Core & Main reported solid Q1 2026 results, with net income rising 7.6% to $113 million and diluted EPS increasing 9.6% to $0.57. Net sales remained steady at $1.91 billion as steady municipal demand and growth in treatment plant and smart utility categories helped offset volume declines in other areas. The company also expanded its gross margin by 50 basis points to 27.2% through disciplined pricing and cost management.
The company continued to execute its growth strategy by opening five new greenfield locations during the quarter. Core & Main demonstrated a balanced approach to capital allocation, deploying $88 million to repurchase 1.8 million shares during the quarter, with an additional $37 million used for further repurchases after the period closed.
Looking ahead, Core & Main Inc. has reaffirmed its full-year fiscal 2026 outlook. With healthy demand for water infrastructure repair and replacement, the company remains focused on its strategic initiatives, including margin expansion and supporting complex utility projects.
Core & Main Inc. distributes water, wastewater, storm drainage, and fire protection products and related services in the US.
4. Clearwater Analytics Holdings Inc. (NYSE:CWAN)
Number of Hedge Fund Holders: 57
Clearwater Analytics Holdings Inc. (NYSE:CWAN) is one of the best young stocks to invest in according to hedge funds. On June 3, Clearwater Analytics introduced three AI-enabled products designed to integrate directly into institutional investment workflows. By using its trusted investment data foundation, which supports over $10 trillion in global assets, the company aims to help investors automate operations, improve risk management, and gain deeper insights into private markets without sacrificing transparency or auditability.
The new offerings include Clearwater Compass, which automates exception management and reconciliation for accounting teams; Total Portfolio Oversight, developed with Blackstone to provide a unified view of public and private asset risk; and Fund Analytics, which uses AI to structure fragmented private markets data. These tools are designed to replace manual, spreadsheet-driven processes with centralized, intelligence-backed workflows.
CEO Sandeep Sahai emphasized that the effectiveness of these AI solutions is rooted in the platform’s high-quality investment record. By embedding intelligence directly into operational and oversight functions, Clearwater Analytics Holdings Inc. aims to help firms accelerate their decision-making processes while maintaining the rigorous controls required by institutional investors.
Clearwater Analytics Holdings Inc. provides a cloud-native investment management platform for institutional investors across public and private markets, using a single-instance, multi-tenant architecture to deliver real-time data and AI-driven insights across the investment lifecycle.
3. GE HealthCare Technologies Inc. (NASDAQ:GEHC)
Number of Hedge Fund Holders: 60
GE HealthCare Technologies Inc. (NASDAQ:GEHC) is one of the best young stocks to invest in according to hedge funds. On June 4, GE HealthCare received FDA 510(k) clearance for MIM Contour ProtégéAI+ 2.0, an AI-powered software designed to streamline radiation therapy planning. This update introduces new capabilities, including an MR Brain model and an improved CT Male Pelvis model, to assist oncology teams in delivering more personalized patient care.
The clearance includes a Predetermined Change Control Plan/PCCP, which creates a framework for GE HealthCare to introduce future enhancements and new anatomical models more efficiently. By automating the time-intensive process of manual contouring, the software helps clinicians increase efficiency while maintaining high accuracy in their treatment planning.
Designed to operate with minimal user interaction, the tool automatically initiates contouring and integrates directly with existing treatment planning systems. This automation aims to reduce manual workload, allowing radiation oncology care teams to focus on refining and personalizing treatment plans for their patients.
GE HealthCare Technologies Inc. is a healthcare company with a focus on various products, services, and digital solutions made for diagnoses and treatments. The company operates through Imaging, Advanced Visualization Solutions, Patient Care Solutions, and Pharmaceutical Diagnostics segments.
2. Astera Labs Inc. (NASDAQ:ALAB)
Number of Hedge Fund Holders: 69
Astera Labs Inc. (NASDAQ:ALAB) is one of the best young stocks to invest in according to hedge funds. On May 5, Astera Labs introduced its Scorpio X-Series 320-lane smart fabric switch, designed to address the inefficiency of fragmented AI workloads. As AI training and inference tasks increasingly branch and pause, traditional infrastructure often leaves expensive GPUs idle. Astera’s memory-semantic architecture aims to resolve this by reducing data-movement overhead, allowing accelerators to access shared resources more efficiently and improving overall GPU utilization.
To further boost performance, the switch incorporates the Hypercast engine, which offloads collective operations directly into the fabric. By handling tasks like all-reduce and all-gather within the network, the system reduces the synchronization tax that typically limits scaling. Astera claims this approach can yield up to a 2x improvement in collective operations, helping large GPU clusters remain synchronized as they handle increasingly complex, non-linear model architectures.
As the AI switching market expands, Astera is positioning itself within the growing open ecosystem, supporting initiatives like UALink, to offer an alternative to proprietary vendor lock-in. By simplifying cluster topology and reducing hop counts, the company is betting that hyperscalers will prioritize flexible, high-radix fabrics to keep their compute resources fed and synchronized in diverse, multi-tenant environments.
Astera Labs Inc. is a global semiconductor company that provides hardware and software solutions for AI and cloud infrastructure applications to solve memory, data, and networking bottlenecks. The company’s operations are divided into the following geographical segments: Taiwan, China, the United States, and Other.
1. Forgent Power Solutions Inc. (NYSE:FPS)
Number of Hedge Fund Holders: 76
Forgent Power Solutions Inc. (NYSE:FPS) is one of the best young stocks to invest in according to hedge funds. On May 14, Forgent Power Solutions reported FQ3 2026 earnings, with revenues reaching $379 million, a 103% year-over-year increase. The company achieved record performance in order volume, securing $867 million in bookings and reaching a total backlog of $1.98 billion. Driven by demand across data center and power grid markets, the company saw its net income rise to $24 million, while Adjusted EBITDA reached $85 million, reflecting a 200-basis-point sequential margin expansion.
Management attributed the company’s success to its agile manufacturing model and the ability to deliver customized solutions with industry-leading lead times. Although margins were slightly impacted by startup costs at new facilities and aggressive headcount growth, revenue expansion is allowing Forgent to improve its absorption of labor and overhead costs. Operational cash flow improved significantly to $29 million, even as the company continues to invest in its multi-year capacity expansion plan.
Forgent Power Solutions Inc. has now raised its full-year fiscal 2026 guidance, now projecting revenue between $1.35 billion and $1.39 billion, along with Adjusted EBITDA of $310 million to $320 million. With its capacity expansion on track to support up to $5 billion in annual revenue by the end of the year, the company expects further margin improvement in the fourth quarter and enters the final period of its fiscal year with substantial growth visibility.
Forgent Power Solutions Inc. is a leading US designer and manufacturer of custom electrical distribution equipment, specializing in critical power infrastructure for data centers, the power grid, and energy-intensive industrial facilities.
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