The growing reliance on debt to finance multi-billion-dollar artificial intelligence and AI-infrastructure investments has come under increasing scrutiny. Oracle has emerged as the prominent example of this trend. In an early December report, CNBC cited Citi analyst Tyler Radke, who estimated that Oracle could raise around $20-$30 billion in debt each year over the next three years for its AI build-out.
To highlight broader credit concerns, the same CNBC report quoted Daniel Sorid, head of U.S. investment-grade credit strategy at Citi. He noted,
There is something inherently uncomfortable as a credit investor about the transformation of the sort we’re facing that is going to require an enormous amount of capital.
And Oracle is not alone. Many large companies are piling on debt to fund the buildout of their artificial intelligence capabilities. In a January 5 report, Bloomberg noted that companies issued $37 billion in U.S. investment-grade bonds on the very first Monday of 2026. It also quoted a survey of debt underwriters, which indicated that around $215 billion of high-grade debt will be sold in January alone.
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That said, rising leverage carries its own risks. As debt levels increase, corporate defaults may rise as well. Companies with minimal or no debt often have greater financial flexibility and tend to experience less operational and cash flow volatility during downturns. At the same time, an entirely debt-free approach can also limit growth if it constrains investment opportunities. In practice, there should be an optimal balance to capitalize on such growth opportunities.
With that balance in mind, for the purposes of this article, we define “debt-free” as companies with net cash positions, where enterprise value is lower than market capitalization, indicating that cash and liquid investments exceed total debt.
With that framework in mind, let’s explore our selection of the best debt-free stocks to buy now.
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Our Methodology
To identify the best debt-free stocks, we first compiled a list of U.S. stocks with a market capitalization of at least $2 billion. For the resulting list of stocks, we compared their enterprise value (EV) to their market capitalisation (EV-to-market cap ratio) and shortlisted those with a ratio below 1.0. A ratio of 1.0 or below indicates that the company has no debt or minimal debt. From this refined list, we identified the top 12 stocks with a potential upside of at least 15%, and the highest hedge fund ownership by leveraging data from Insider Monkey’s Q3 2025 hedge fund database. Finally, we ranked these stocks in ascending order by the number of hedge funds holding positions.
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).
Note: All pricing data is as of market close on January 15, 2026.
12. Coinbase Global Inc. (NASDAQ:COIN)
Potential Upside: 48.4%
Number of Hedge Fund Holders: 73
Coinbase Global Inc. (NASDAQ:COIN) is among the best debt-free stocks to buy now, with renewed analyst optimism after a recent sharp pullback. According to a January 8 report from The Fly, BofA upgraded the stock’s rating to Buy from Neutral and maintained its price target of $340.
While BofA acknowledged the 40% decline in the stock since its July all-time high, it believes the pullback was driven by a crypto-led correction and is unrelated to underlying fundamentals or company-specific issues. Rather, the report highlighted the expansion of the total addressable market and a faster pace of feature rollouts (product velocity), indicating that the company continued to strengthen its strategic positioning amid volatility.
The firm also highlighted Coinbase’s recent expansion into stock and ETF trading and its entry into prediction markets. With this, the company should be able to broaden the platform beyond pure crypto trading. BofA viewed this as supportive of management’s push toward becoming an “everything exchange” and an opportunity to cross-sell additional products to its existing user base.
On the flip side, in a note published around the same time, Barclays maintained its cautious stance on the stock, assigning an Equal Weight rating and reducing its price target from $291 to $258. Barclays is pencilling in several headwinds in its Q4 model, including lower trading volumes, slower USDC growth, and continued volatility in crypto asset prices.
The company is scheduled to report Q4 results in the third week of February, and it seems like a lot is riding on that. However, the overall consensus appears favorable, with just under two-thirds of analysts covering it rating it Buy and estimating a 1-year upside of nearly 55%.
11. Insmed Inc. (NASDAQ:INSM)
Potential Upside: 34.0%
Number of Hedge Fund Holders: 73
Insmed Inc. (NASDAQ:INSM) is among the best debt-free stocks to buy now. On January 9, 2026, the company reported strong preliminary 2025 results, with total revenue reaching approximately $606 million, up 67% year over year, driven by continued ARIKAYCE growth and the first full year of BRINSUPRI, both of its leading therapies. This topline growth came in at the top end of the current consensus and was 11% above the consensus average of $545 million.
On a full-year basis, ARIKAYCE generated about $434 million globally, exceeding guidance, while BRINSUPRI contributed roughly $173 million in U.S. sales, supported by solid adoption by medical professionals. Management also outlined a robust 2026 outlook, including an expected EU launch of BRINSUPRI, ARIKAYCE revenue guidance of $450-$470 million, and multiple upcoming late-stage clinical readouts.
Just before the results, Morgan Stanley analyst Maxwell Skor reviewed Insmed Inc. (NASDAQ:INSM) and lowered his price target marginally to $157 from $158, keeping his Equal Weight rating intact. The analyst remains cautious on large-cap biopharma names, including INSM, as he believes these companies will be affected by the loss of exclusivity for some of their best-selling medicines, commonly referred to as “the patent cliff.”
However, the analyst’s view remains favorable toward U.S. small- to mid-cap biotech, as he expects this space to outperform in 2026 as well.
Insmed Inc. (NASDAQ:INSM) is a biopharmaceutical company that develops and commercializes therapies for patients with serious and rare diseases. The company’s most advanced programs focus on pulmonary and inflammatory conditions.
10. Palo Alto Networks Inc. (NASDAQ:PANW)
Potential Upside: 22.5%
Number of Hedge Fund Holders: 85
Palo Alto Networks Inc. (NASDAQ:PANW) is among the best debt-free stocks to buy now. According to a January 13 report by The Fly, UBS cut its price target on the company’s stock from $220 to $215 and maintained a Neutral rating.
UBS remains constructive on the cybersecurity sector as it estimates that spending in this industry will exceed growth in the overall IT budgets. Moreover, the firm expects further improvement through consolidation and increased commercialization of AI-enabled solutions.
That said, the firm cautions that stock selection is likely to remain challenging in the current environment. It favours stocks in the mid-cap security platform space that are still in the early stages of their product ecosystems and growth.
Data from TipRanks indicate that UBS has maintained a cautious stance on Palo Alto Networks Inc. (NASDAQ:PANW) for an extended period and continues to do so in its latest update. As noted in its last update in November, UBS’s cautious outlook was driven by softness in platformization deals and a potential deceleration in service revenue growth.
In the first week of January, Guggenheim upgraded Palo Alto Networks Inc. (NASDAQ:PANW) to Neutral from Sell, citing the underperformance over the last year. The firm also cited the company’s recent acquisitions as one reason, noting that these strategic deals will bolster its competitive position and support a more positive outlook.
Palo Alto Networks Inc. (NASDAQ:PANW) provides security solutions to help secure enterprise users, networks, clouds, and endpoints, with platforms such as Prisma Access, Prisma Cloud, and Cortex.
9. Roblox Corporation (NYSE:RBLX)
Potential Upside: 76.6%
Number of Hedge Fund Holders: 90
Roblox Corporation (NYSE:RBLX) is among the best debt-free stocks to buy now. Early this week, Morgan Stanley reaffirmed its bullish stance on the stock with an Overweight rating, but reduced the price target from $170 to $155, according to The Fly. The review was part of the analyst’s note on the North America Internet group.
The firm expects the performance in the internet sector in 2026 to be “thematically similar” to 2025. Within that, it believes that companies exhibiting strong returns (as measured by Return on Invested Capital (ROIC)) from their investments in GenAI or GPU-enabled technologies are expected to be favoured by investors. However, Morgan Stanley identified subsectors that face heightened disruption risk and therefore will command lower valuation multiples. These subsectors included ridesharing that faces disruption from autonomous vehicles, as well as e-commerce, travel, and smaller, less-proven advertising platforms.
In a follow-up note a day later, Morgan Stanley highlighted the strong performance of a new game called “Escape Tsunami,” which has reached the number 4 spot on the platform in just a month after launch. Though the firm acknowledges that the game’s success is only a short-term positive, it sees it as a showcase of the platform’s strength and an indication of robust engagement and bookings growth in 2026. It reiterated its Overweight rating and $155 price target.
Roblox Corporation (NYSE:RBLX) operates an immersive online gaming and creation platform that enables people to create, connect, and communicate.
8. DoorDash Inc. (NASDAQ:DASH)
Potential Upside: 33.3%
Number of Hedge Fund Holders: 91
DoorDash Inc. (NASDAQ:DASH) is among the best debt-free stocks to buy now. In a January 8 note cited by The Fly, Wells Fargo increased the price target on DoorDash stock from $239 to $251 and reiterated an Equal Weight rating.
The firm estimates that the company’s Q4 results will come in line with expectations. However, Q1 guidance for Gross Order Value (GOV) is expected to exceed Street expectations by approximately 2%.
However, Wells Fargo flagged some cost-related issues that could affect the outlook. It notes that the timing and phasing of technology replatforming expenses could create downside risk to consensus margin expansion expectations in the second half of 2026. Moreover, this could also introduce additional uncertainty around 2027 EBITDA forecasts, which underpin the firm’s cautious view.
Interestingly, balancing that caution, BNP Paribas initiated coverage of DoorDash Inc. (NASDAQ:DASH) with an Outperform rating and a price target of $280. With that, over two-thirds of analysts covering the stock rate it Buy, with a consensus 1-year median price target upside of 31.4%, as of January 14.
DoorDash Inc. (NASDAQ:DASH) operates a logistics platform that connects merchants, consumers, and dashers in the United States and internationally.
7. The Charles Schwab Corporation (NYSE:SCHW)
Potential Upside: 16.8%
Number of Hedge Fund Holders: 99
The Charles Schwab Corporation (NYSE:SCHW) is among the best debt-free stocks to buy now. According to a January 14 note cited by The Fly, TD Cowen made a modest upward revision to its price target on the stock, raising it to $135 from $134 while reiterating a Buy rating.
The report highlighted that the firm remains most constructive on Traditional Asset Managers and is emphasizing a more selective approach with a sharper focus on higher-conviction names. That said, TD Cowen continues to maintain exposure to alternative asset managers, with an increasingly tilted portfolio toward strategies better suited to a “higher-for-longer” rate environment.
Before TD Cowen, Raymond James analysts reiterated their Buy rating on The Charles Schwab Corporation (NYSE:SCHW) and raised their price target from $110 to $114, according to an investing.com report dated January 5. Based on analysts’ estimates, Schwab should be able to withstand net margin pressure from potential Federal Reserve interest rate cuts, given the recent reduction in its high-cost funding exposure and the ability to reinvest maturing securities at higher yields.
The stock is currently a strong Buy by consensus, with 1-year price target estimates implying nearly 18% upside, indicating a robust financial outlook.
The Charles Schwab Corporation (NYSE:SCHW), together with its subsidiaries, operates as a savings and loan holding company that provides wealth management, securities brokerage, banking, asset management, custody, and financial advisory services in the United States and internationally.
6. ServiceNow Inc. (NYSE:NOW)
Potential Upside: 67.7%
Number of Hedge Fund Holders: 104
ServiceNow Inc. (NYSE:NOW) is among the best debt-free stocks to buy now. Stifel analyst Brad Reback, who rates NOW as Buy, flagged a potential near-term headwind for ServiceNow (NOW), according to a January report by The Fly.
The analyst identified a reduction in U.S. federal spending tied to workforce changes, with a Treasury Department contract showing a roughly $15 million cut in spending with the company. According to Reback, this reduction was driven by a de-obligation of funds under the government’s Deferred Resignation Program (DRP).
The DRP was launched by the Department of Government Efficiency in early 2025 and allows federal employees to take fully paid leave, provided they resign by September 30, 2025. The Stifel analyst believes this program is now beginning to weigh on software seat counts across federal agencies.
With estimates suggesting roughly 200,000 non-Department of Defense employees opted into the program, Reback expects additional contract adjustments to emerge. He argues that this may create an incremental headwind to growth for seat-based enterprise software models through 2026.
In his January 9 note, Reback reaffirmed his Buy rating and trimmed his price target from $230 to $200. Around January 12, Goldman Sachs initiated coverage of ServiceNow Inc. (NYSE:NOW) with a Buy rating and a $205 price target.
ServiceNow Inc. (NYSE:NOW) provides cloud-based platforms for digital workflows, enabling organizations to automate and optimize their business processes. The company’s Now Platform offers solutions across IT service management, customer service, HR, and other areas.
5. GE Vernova Inc. (NYSE:GEV)
Potential Upside: 20.2%
Number of Hedge Fund Holders: 108
GE Vernova Inc. (NYSE:GEV) is among the best debt-free stocks to buy now. In a research note cited by The Fly on January 12, Citi adjusted its estimates and price targets for its industrials group coverage as part of its Q4 outlook review. As a result, it raised its price target on GE Vernova from $658 to $708 while maintaining a Neutral rating, implying a 10% upside.
Before Citi, Robert W. Baird analyst Ben Kallo also downgraded the stock to Neutral from Outperform and lowered the price target to $649, down from $816 earlier.
While GE Vernova Inc.’s (NYSE:GEV) stock has rallied during the last year, its outlook has been soured by concerns about power capacity oversupply, and as Kallo mentioned in his note, these concerns are “shifting sentiment” on the company. Some in the market believe that demand for GEV’s turbines and other equipment was mostly driven by AI-led growth, and that the company will be affected if tech companies can’t turn AI into the future success it is currently estimated to be.
However, GE Vernova Inc. (NYSE:GEV) believes that such concerns don’t capture the full picture. At its recent Investor Day event, the company’s Chief Executive Officer, Scott Strazik, addressed these concerns, saying, “AI is a real driver for us right now, but it isn’t the only driver.”
In early December, the company provided a robust outlook, projecting its total order backlog to reach about $200 billion by the end of 2028, up from $135 billion, according to a Bloomberg report. The company also guided for better profit margins in its power and electrification unit, and raised expectations for dividends and buybacks.
Following the update, several analysts reiterated their confidence in the stock, including JPMorgan, which raised its price target substantially from $740 to $1,000 and maintained its Buy rating.
GE Vernova Inc. (NYSE:GEV), a purpose-built global energy company, is a leader in the electric power industry, offering products and services that generate, transmit, convert, and store electricity. The company has three business segments: power, wind, and electrification.
4. Capital One Financial Corporation (NYSE:COF)
Potential Upside: 22.4%
Number of Hedge Fund Holders: 129
Capital One Financial Corporation (NYSE:COF) is among the best debt-free stocks to buy now. According to a January 12 update from The Fly, JPMorgan analyst Richard Shane raised Capital One Financial’s price target to $256 from $237 while maintaining a Neutral rating, as part of a broader Q4 preview across the consumer finance group.
While the target hike was positive, JPMorgan flagged elevated near-term volatility for card issuers following U.S. President Donald Trump’s proposal to cap credit card interest rates at 10% for one year.
Calling for a 10%, one-year cap on credit card interest rates, President Trump wrote in a post on Truth Social on January 10,
Please be informed that we will no longer let the American Public be “ripped off” by Credit Card Companies that are charging Interest Rates of 20 to 30%, and even more, which festered unimpeded during the Sleepy Joe Biden Administration. AFFORDABILITY! Effective January 20, 2026, I, as President of the United States, am calling for a one-year cap on Credit Card Interest Rates of 10%. Coincidentally, the January 20th date will coincide with the one year anniversary of the historic and very successful Trump Administration.
In its note, JPMorgan highlighted that such a policy, if enacted, would represent a structural disruption to the credit card industry. It will not only materially impact issuer profitability but will also restrict consumer access to credit.
However, JPMorgan analysts called the proposal a “high-severity, low-probability risk likely subject to significant legal challenges.” This means that legal and implementation issues could limit its likelihood. Despite this, the firm believes that the headline risk warrants caution as the sector is sensitive to regulatory intervention.
On the same day, RBC Capital also raised its price target on the stock from $255 to $275, maintaining a Sector Perform rating. The revision was part of the firm’s Q4 preview of the consumer finance names under its coverage. Among their other observations, the firm’s analysts are anticipating “modest improvements in core credit metrics.”
Capital One Financial Corporation (NYSE:COF) is a McLean, Virginia-based diversified financial services holding company. The company provides a range of financial products and services, including credit card lending, auto loans, and commercial lending.
3. Uber Technologies Inc. (NYSE:UBER)
Potential Upside: 30.4%
Number of Hedge Fund Holders: 143
Uber Technologies Inc. (NYSE:UBER) is among the best debt-free stocks to buy now. Earlier this week, Morgan Stanley analyst Brian Nowak reaffirmed his conviction on Uber, reiterating his Buy rating and a $110 price target. The analyst believes the market is not valuing the company appropriately.
Nowak’s sum-of-the-parts analysis suggests the market is valuing Uber Technologies Inc.’s (NYSE:UBER) U.S. mobility business at a 2027 adjusted EBITDA multiple of 7x, which he believes is much lower given the business’s mid-teens growth. This also indicates a sharp discount relative to peers, which isn’t justified given the business’s strong fundamentals. He also highlighted the contrast in the 10% valuation discount relative to Lyft’s, which is relatively smaller, less diversified, and less profitable.
From an autonomous vehicle (AV) competition perspective, Nowak acknowledges that share prices for both Uber and Lyft might witness volatility as he expects an acceleration in AV development in 2026. However, he doesn’t expect any material financial impact on Uber for the next 24 months.
In another vote of confidence later in the week, BNP Paribas initiated coverage of Uber Technologies Inc. (NYSE:UBER) with an Outperform rating and a $108 price target. The firm characterized Uber as “a mobility and delivery winner,” despite the AV momentum ahead.
Uber Technologies Inc. (NYSE:UBER) is a global technology platform that connects consumers with transportation, delivery, and logistics services. The company operates through its Mobility, Delivery, and Freight segments, offering ride-hailing, meal delivery, and freight brokerage solutions.
2. Apple Inc. (NASDAQ:AAPL)
Potential Upside: 16.2%
Number of Hedge Fund Holders: 166
Apple Inc. (NASDAQ:AAPL) is among the best debt-free stocks to buy now. On January 15, Reuters reported a significant development in India’s antitrust case against Apple over its anti-competitive policies on the App Store.
As per the report, India’s penalty rules use the company’s global revenue to calculate penalties, a practice Apple contends is unfair. If these rules are applied, Apple could face penalties of up to $38 billion, and the company is fighting another case against those rules in the Delhi High Court. The next hearing in this case is scheduled for January 27, as per Reuters.
However, the regulator, Competition Commission of India (CCI), contends that Apple has delayed responding to them for a year and has now issued a final warning to the company to respond within a week to avoid unilateral proceedings.
Apple Inc. (NASDAQ:AAPL) didn’t respond to Reuters’ questions on the development.
Despite the concerns, analysts’ views on Apple remain reasonably favourable: nearly 60% of analysts covering it (per CNN data) rate it Buy, and the consensus 1-year median price target is $300, implying an additional 16% upside.
Recent analyst activity has been broadly positive. Around the end of last week, Evercore ISI reiterated Apple Inc. (NASDAQ:AAPL) as its “Top Pick,” raising its price target to $330 from $325 earlier, driven by higher earnings estimates. The analyst sees a strong demand for iPhones and a very small impact from memory cost inflation, which helps improve earnings.
1. NVIDIA Corporation (NASDAQ:NVDA)
Potential Upside: 33.7%
Number of Hedge Fund Holders: 234
NVIDIA Corporation (NASDAQ:NVDA) is among the best debt-free stocks to buy now. Only a few days after receiving the green light for export to China (export approval), shipments of H200 AI processors have again taken center stage. On Thursday, January 15, Bloomberg reported that House Representative John Moolenaar raised concerns on the shortage of dynamic random-access memory, or DRAM, and apprised Commerce Secretary Howard Lutnick of this “immediate challenge”. He said,
Due to severe supply constraints, chips equipped with HMB3E bound for China represent an opportunity cost when it comes to HMB3E that could otherwise be utilized by American customers.
High-bandwidth memory (HBM) is an essential component of H200 and is manufactured by three companies: Samsung Electronics, SK Hynix, and Micron Technology. According to Bloomberg, over the last few months, these three companies have already warned of supply constraints and a potential shortage of this component. While NVIDIA Corporation (NASDAQ:NVDA) has said it can fulfil all approved H200 orders without impacting other products or customers, the restrictions from the export approval could now come into effect, requiring proof of “sufficient” US supply.
Mr. Moolenaar has now asked Secretary Lutnick to brief on the situation by January 25, including the impact on licence approvals based on the availability of memory chips.
While the H200 export market remains dynamic, analysts appear to be focusing on the company’s fundamentals at the moment. On Friday, January 16, analysts at Jefferies reiterated their bullish stance on NVIDIA Corporation (NASDAQ:NVDA) and raised their price target to $275 from $250. As the stock trades at a mid-teen multiple to 2027 estimates, the analyst believes it “remains pretty cheap.”
NVIDIA Corporation (NASDAQ:NVDA) designs and manufactures graphics processing units (GPUs), system-on-a-chip (SoC) units, and AI hardware and software. Its products are used in gaming, data centers, artificial intelligence, autonomous vehicles, and professional visualization.
While we acknowledge the potential of NVDA 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 NVDA and that has 100x upside potential, check out our report about this cheapest AI stock.
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