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 (NASDAQ:MWH) 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 (NASDAQ:MWH) 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. (NYSE:WRBY) 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. (NYSE:BROS) 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. (NASDAQ:FIGR) 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. (NASDAQ:FIGR) 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 (NASDAQ:ABVX) remains focused on its upcoming milestones.
ABIVAX Société Anonyme (NASDAQ:ABVX) 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. (NASDAQ:MLYS) 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. (NASDAQ:MLYS) 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.
While we acknowledge the potential of MLYS 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 MLYS and that has 100x upside potential, check out our report about the cheapest AI stock.
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