On September 24, Ryan Detrick, Carson Group chief market strategist, joined CNBC’s ‘Power Lunch’ to discuss why he still expects a strong end-of-year rally. Detrick pointed out that late September and early October are seasonally weak times. Although seasonals haven’t strictly applied this year due to the market being so bullish, he noted that the market is looking at 5 straight up months. Historically, when the market is up 5 months going into October, it is not too surprisingly down on average, suggesting investors get a break. Crucially, Detrick emphasized to listeners that Q4 is still up almost 6% on a median return and higher the great majority of the time when the market has been up 5 months in a row going into it. He attributed his bullishness to the word momentum, which the bull market still possesses.

Detrick stated that he would be happy with some kind of a pullback, noting that while pullbacks are painful, stocks going up every day makes one nervous. He said that his firm would welcome a four to six percent normal, mild correction. He mentioned a couple of things that currently have their attention: put-to-call ratios are at some of the lowest levels seen all year, and $58 billion flowed into US equity funds, which is the most seen this year. He suggested that between the Jewish holidays and early October, there might be a little bit of volatility or weakness, but their opinion is that it will be a buying opportunity. This opportunity, he claimed, will be led by strong earnings, strong profit margins, and a stronger consumer, citing the retail sales from the previous week. He stressed that he doesn’t see this recession that some people are still discussing, and he would use any weakness as a buying opportunity.

That being said, we’re here with a list of the 12 best hot stocks to invest in.

Our Methodology

We sifted through different stock screeners to compile a list of the hot stocks with the highest performance over the past 3 months (over 50%) and with high upside potential (over 20%). We then selected the 12 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q2 2025.

Note: All data was sourced on October 10. 

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).

12 Best Hot Stocks to Invest In

12. Monopar Therapeutics Inc. (NASDAQ:MNPR)

3-Month Performance as of October 10: 100.82%

Average Upside Potential as of October 10: 20.70%

Number of Hedge Fund Holders: 6

Monopar Therapeutics Inc. (NASDAQ:MNPR) is one of the best hot stocks to invest in. On October 6, Raymond James raised the firm’s price target on Monopar Therapeutics to $142 from $80, while keeping a Strong Buy rating on the shares. The firm thinks that the company’s shares can continue to work well into 2026.

Earlier in Q2 2025, the company’s net loss was $2.5 million (or $0.35 per share), compared to a net loss of $1.7 million (or $0.49 per share) for Q2 2024. Monopar Therapeutics reported that its cash, cash equivalents, and investments totaled $53.3 million, which will support operations through December 31, 2026.

This will allow the company to follow its anticipated timeline and execute tasks like filing an NDA for ALXN1840, concluding its Phase 1 imaging/dosimetry trial for MNPR-101-Zr, continuing its Phase 1a therapeutic trial for MNPR-101-Lu, and advancing its preclinical MNPR-101-Ac program into the clinic.

Monopar Therapeutics Inc. (NASDAQ:MNPR) is a clinical-stage biopharmaceutical company that develops therapeutics for the treatment of cancer in the US.

11. Mesoblast Limited (NASDAQ:MESO)

3-Month Performance as of October 10: 64.01%

Average Upside Potential as of October 10: 56.16%

Number of Hedge Fund Holders: 6

Mesoblast Limited (NASDAQ:MESO) is one of the best hot stocks to invest in. On October 3, Mesoblast Limited announced that its product Ryoncil (remestemcel-L-rknd) was assigned a specific Healthcare Common Procedure Coding System/HCPCS J-Code by the US Medicare & Medicaid Services/CMS. The new permanent J-Code, J3402, became active for billing and reimbursement on October 1.

The formal recognition by CMS is a commercial milestone as it provides a standardized, clear, and permanent billing pathway for Ryoncil, facilitating reimbursement by Medicare, Medicaid, and commercial payers, thus enabling broader patient access to the therapy. Ryoncil is the first mesenchymal stromal cell/MSC product approved by the US FDA for any indication.

It is the only product approved for children under age 12 (specifically, pediatric patients 2 months and older) with steroid-refractory acute graft-versus-host disease/SR-aGvHD. Mesoblast develops allogeneic (off-the-shelf) cellular medicines for severe inflammatory conditions. The company’s proprietary mesenchymal lineage cell therapy technology platform works by having its cell therapies release anti-inflammatory factors that modulate the immune system to reduce damaging inflammatory processes.

Mesoblast Limited (NASDAQ:MESO), together with its subsidiaries, develops regenerative medicine products in Australia, the US, Singapore, and Switzerland. The company’s proprietary regenerative medicine technology platform is based on specialized cells known as mesenchymal lineage cells.