In this article, we discuss the 12 Best Stocks to Buy in Falling Markets According to Hedge Funds.

Markets fell on Thursday, August 21, as investors were cautious ahead of Fed Chair Jerome Powell’s highly anticipated address at Jackson Hole. The Dow, S&P 500, and Nasdaq all fell slightly, driven down by increased concerns over hawkish comments that could dampen chances for a September rate decrease. With the likelihood of a cut falling from near certainty to just under 80%, traders chose to lock in profits and reduce risk exposure, especially since sparse summer trading volumes are expected to exacerbate any market fluctuations.

Beyond monetary policy, earnings from large merchants exacerbated the anxiety. Walmart’s earnings showed robust customer demand but fell short of profit projections. This raised concerns about growing prices and the overall impact of tariffs on household spending. Meanwhile, the decline of major technology companies reflected market concerns about stretched valuations and regulatory pressures. Together, these factors exacerbated the perception of fragility that pervades markets.

For investors, situations like this might be uncomfortable, but they also create opportunities. Falling markets frequently reveal whether companies have strong balance sheets, pricing power, and business structures that can withstand uncertainty. Historically, downturns have been ideal opportunities to buy such stocks at lower prices. With volatility expected to persist, investors looking for the best stocks to buy in declining markets may discover that discipline and patience are the keys to converting short-term turbulence into long-term rewards.

With this backdrop in mind, let us proceed to our list of the 12 Best Stocks to Buy in Falling Markets According to Hedge Funds.

Our Methodology

To curate our list of the 12 Best Stocks to Buy in Falling Markets According to Hedge Funds, we used the Finviz screener to extract a list of stocks that have lost 15% or more over the past 12 months and are in the telecommunications, technology, or software infrastructure industries. Next, we ranked these stocks in ascending order based on the number of hedge funds holding stakes in the respective stocks as of Q1 2025. We assessed the hedge fund sentiment surrounding these stocks using Insider Monkey’s hedge fund database, which tracks over 1,000 hedge funds.

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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

12. Tenable Holdings, Inc. (NASDAQ:TENB)

Decline in Share Price Over Past 12 Months: 28.47%

Number of Hedge Fund Holders: 44

Tenable Holdings, Inc. (NASDAQ:TENB) is one of the 12 Best Stocks to Buy in Falling Markets According to Hedge Funds.

Cantor Fitzgerald reaffirmed an ‘Overweight’ rating on Tenable Holdings, Inc. (NASDAQ:TENB) with a $42 price target on August 15, 2025, following the company’s stronger-than-expected second-quarter results. Revenue, billings, operating income, and free cash flow all exceeded expectations, thanks to momentum in the Tenable One platform and a shift toward proactive security solutions. Gross margins remained strong at 78%, with revenue rising 11.4% year on year.

Tenable Holdings, Inc. (NASDAQ:TENB) increased its full-year expectations, citing greater visibility in the federal and SLED sectors. The Tenable One platform now generates 40% of new business and 30% of total revenue. Analysts see the post-earnings slump as a potential entry point for long-term investors, despite the lack of immediate catalysts.

Tenable Holdings, Inc. (NASDAQ:TENB) offers cyber exposure management solutions that assist enterprises in identifying, assessing, and mitigating vulnerabilities in IT, cloud, OT, and identity environments worldwide. It is included in our list of the Best Bear Market Stocks.

11. Five9, Inc. (NASDAQ:FIVN)

Decline in Share Price Over Past 12 Months: 26.37%

Number of Hedge Fund Holders: 44

With a one-year share price decline and significant hedge fund interest, Five9, Inc. (NASDAQ:FIVN) secures a spot on our list of the 12 Best Stocks to Buy in Falling Markets According to Hedge Funds.

On August 1, 2025, Needham analyst Scott Berg reiterated his ‘Buy’ rating on Five9, Inc. (NASDAQ:FIVN) with a $40 price target, citing the company’s solid Q2 performance. Subscription revenue increased by 16%, driven by a 42% year-on-year increase in Enterprise AI sales, while Enterprise AI bookings tripled and new logo AI bookings doubled.

Despite some macroeconomic caution weighing on H2 projections, strong sales and rising market adoption support an optimistic outlook. Leadership changes, such as the retirement of the long-time CEO and the appointment of a new CFO, have not lowered confidence. Analysts believe Five9, Inc. (NASDAQ:FIVN) is well-positioned to benefit from the burgeoning agentic AI trend while maintaining its competitive advantage in intelligent contact center solutions.

Five9, Inc. (NASDAQ:FIVN) offers cloud-based AI-powered contact center software that enables seamless customer interactions across voice, chat, email, online, and social media channels worldwide. It is included in our list of the Best Bear Market Stocks.

10. EPAM Systems, Inc. (NYSE:EPAM)

Decline in Share Price Over Past 12 Months: 17.18%

Number of Hedge Fund Holders: 46

EPAM Systems, Inc. (NYSE:EPAM) is one of the 12 Best Stocks to Buy in Falling Markets According to Hedge Funds.

On August 18, 2025, TD Cowen upgraded EPAM Systems, Inc. (NYSE:EPAM) to ‘Buy’ from ‘Hold’ and increased its price target to $205, noting improved revenue momentum and the conclusion of post-Ukraine delivery restructuring. EPAM has now delivered three consecutive quarters of organic revenue acceleration, with Q3 growth likely to exceed 6% year on year, exceeding most large IT services peers. All regions and verticals are contributing, and headcount growth is expected to accelerate in H2.

With delivery operations stable, EPAM Systems, Inc. (NYSE:EPAM) is focusing on sales execution, client expansion, and margin improvement, with gross margins expected to recover to the low-30% range and EPS growth of around 13% per year from 2026-2027. TD Cowen believes EPAM’s risk-reward ratio is appealing in light of the sector’s weakness.

EPAM Systems, Inc. (NYSE:EPAM) offers global digital platform engineering, software development, cloud, artificial intelligence, and cybersecurity services across numerous industries. It is included in our list of the Best Bear Market Stocks.

9. Confluent, Inc. (NASDAQ:CFLT)

Decline in Share Price Over Past 12 Months: 20.13%

Number of Hedge Fund Holders: 49

With a one-year share price decline and significant hedge fund interest, Confluent, Inc. (NASDAQ:CFLT) secures a spot on our list of the 12 Best Stocks to Buy in Falling Markets According to Hedge Funds.

On August 19, 2025, Confluent, Inc. (NASDAQ:CFLT) introduced Streaming Agents, a new Confluent Cloud functionality for Apache Flink that enables organizations to create and scale AI agents that act on real-time data. By combining data processing and AI processes, Streaming Agents allows enterprises to securely integrate tools, huge language models, and business systems, enabling context-aware automation and other dynamic decisions.

The system solves key enterprise AI issues, such as inconsistent outputs and slow adoption, by offering richer streaming data, replayable testing, and seamless integration. On the same day, William Blair analyst Jason Ader reiterated his ‘Buy’ rating, citing Confluent, Inc. (NASDAQ:CFLT)’s growth potential and innovative platform.

Confluent offers a cloud-native data streaming platform that allows businesses to process and act on real-time data from many sources throughout their operations. It is included in our list of the Best Bear Market Stocks.

8. Gartner, Inc. (NYSE:IT)

Decline in Share Price Over Past 12 Months: 48.95%

Number of Hedge Fund Holders: 51

Gartner, Inc. (NYSE:IT) is one of the 12 Best Stocks to Buy in Falling Markets According to Hedge Funds.

On August 6, 2025, UBS analyst Joshua Chan downgraded Gartner, Inc. (NYSE:IT) to ‘Hold’ with a price target of $270, citing sluggish growth in the company’s fundamental client value (CV) indicators. Q2 results were severely below forecasts, prompting Gartner to reduce its 2026 organic growth prediction from 6% to 3%, while CV growth in 2025 is now projected at 2.5%, down from 5.1%.

Although Gartner, Inc. (NYSE:IT)’s stock is still cheaply priced at 12 times 2026 EBITDA and 16 times free cash flow, discretionary spending cuts and a reset in near-term growth limit immediate potential. Investors should assess long-term strategic value against short-term challenges in research subscriptions, consulting, and conferences.

Gartner, Inc. (NYSE:IT) is a global provider of research, advisory, and consultancy services that provide actionable insights and solutions for IT, digital transformation, and business strategy. It is included in our list of the Best Bear Market Stocks.

7. The AES Corporation (NYSE:AES)

Decline in Share Price Over Past 12 Months: 24.63%

Number of Hedge Fund Holders: 52

With a one-year share price decline and significant hedge fund interest, The AES Corporation (NYSE:AES) secures a spot on our list of the 12 Best Stocks to Buy in Falling Markets According to Hedge Funds.

On August 4, 2025, Morgan Stanley analyst David Arcaro reiterated his ‘Buy’ rating on The AES Corporation (NYSE:AES) with a $23 price target, noting the company’s solid financial performance and strategic positioning. AES reported Q2 earnings per share and adjusted EBITDA far above forecasts, and management reaffirmed its 2025 guidance.

The renewables segment’s growth is strong, driven by considerable bookings and a solid backlog, while the U.S.-based supply chain strategy and avoidance of federal land projects improve stability. Positive momentum in the utility business strengthens the company’s growth prospects, boosting investor confidence in The AES Corporation (NYSE:AES)’s ability to deliver consistent performance across both traditional and renewable energy portfolios.

The AES Corporation (NYSE:AES) generates and distributes electricity globally, operating power plants and utilities using coal, gas, hydro, wind, solar, biomass, and renewable energy storage technologies. It is included in our list of the Best Bear Market Stocks.

6. BILL Holdings, Inc. (NYSE:BILL)

Decline in Share Price Over Past 12 Months: 18.60%

Number of Hedge Fund Holders: 53

BILL Holdings, Inc. (NYSE:BILL) is one of the 12 Best Stocks to Buy in Falling Markets According to Hedge Funds.

On August 21, 2025, BTIG reiterated its ‘Buy’ rating and $60 price target on BILL Holdings, Inc. (NYSE:BILL), ahead of the company’s Q4 FY25 earnings announcement. While BTIG cited macroeconomic challenges on small and midsize business clients, notably in the wholesale, construction, and non-profit sectors, transaction volume per customer is likely to decline by about 2% year on year.

Despite this, the investment firm emphasized BILL Holdings, Inc. (NYSE:BILL)’s potential for growth through pricing initiatives, improved supplier experiences, and cross-selling opportunities, estimating core revenue growth of roughly 15% in FY26, comparable to the 15.3% increase in FY25. BTIG continues to rate Bill.com as a top small-cap option, citing strong client additions and the company’s ability to capitalize on its large total addressable market.

BILL Holdings, Inc. (NYSE:BILL) offers a cloud-based financial operations platform that automates accounts payable and receivable, spend management, and supplier-customer interaction for small and medium-sized enterprises worldwide. It is included in our list of the Best Bear Market Stocks.

5. Charter Communications, Inc. (NASDAQ:CHTR)

Decline in Share Price Over Past 12 Months: 23.21%

Number of Hedge Fund Holders: 59

With a one-year share price decline and significant hedge fund interest, Charter Communications, Inc. (NASDAQ:CHTR) secures a spot on our list of the 12 Best Stocks to Buy in Falling Markets According to Hedge Funds.

Charter Communications, Inc. (NASDAQ:CHTR)’s Spectrum announced a huge extension of its Seamless Entertainment experience on August 21, 2025, including FOX’s new streaming service FOX One, the ESPN DTC Unlimited plan, and the Disney+, Hulu Bundle for no additional cost to eligible TV subscribers.

These offers, totaling more than $100 per month in retail value, join AMC+, HBO Max, Paramount+, ViX Premium, Peacock, and others that have already been featured. Customers may activate the services using the My Spectrum App or spectrum.net, while the Xumo Stream Box combines live TV and streaming into a single search-and-watch experience. Charter Communications, Inc. (NASDAQ:CHTR)’s Spectrum also highlighted its online Savings Calculator, which demonstrates how households can save hundreds to more than $1,000 per year by bundling Spectrum Internet and Mobile services.

Charter Communications, Inc. (NASDAQ:CHTR) offers Spectrum, which provides broadband, TV, mobile, and voice services to over 57 million homes and companies in the United States. It is included in our list of the Best Bear Market Stocks.

4. Fair Isaac Corporation (NYSE:FICO)

Decline in Share Price Over Past 12 Months: 23.08%

Number of Hedge Fund Holders: 68

Fair Isaac Corporation (NYSE:FICO) is one of the 12 Best Stocks to Buy in Falling Markets According to Hedge Funds.

On August 20, 2025, analytics software giant Fair Isaac Corporation (NYSE:FICO) announced a multi-year relationship with Chelsea Football Club, becoming the club’s official U.S. partner. The collaboration will center on increasing financial literacy, emphasizing the necessity of understanding credit and credit ratings in achieving financial security.

The announcement coincides with Chelsea’s global triumph, which saw them win their second FIFA Club World Cup title with a 3-0 victory against Paris Saint-Germain, a momentum that the club aims to carry over to its off-field educational projects. Fair Isaac Corporation (NYSE:FICO) will incorporate its Score A Better Future® programs and tools, expanding access to financial literacy materials for U.S. customers, particularly younger generations who are still unsure about money management. Together, FICO and Chelsea hope to inspire and encourage fans to take control of their financial destinies.

Fair Isaac Corporation (NYSE:FICO) is a global analytics leader that pioneered predictive data science and offers decision-making solutions that promote financial inclusion, risk management, and operational performance across sectors. It is included in our list of the Best Bear Market Stocks.

3. Fiserv, Inc. (NYSE:FI)

Decline in Share Price Over Past 12 Months: 16.98%

Number of Hedge Fund Holders: 72

With a one-year share price decline and significant hedge fund interest, Fiserv, Inc. (NYSE:FI) secures a spot on our list of the 12 Best Stocks to Buy in Falling Markets According to Hedge Funds.

Fiserv, Inc. (NYSE:FI) announced on August 4, 2025 that its July Small Business Index increased by one point to 149, showing solid consumer spending in the United States. Sales increased 3.6% year on year, while transactions increased 3.0%, with essentials exceeding discretionary expenditure. Month-over-month revenue rise (+1.0%) ended a three-month downturn; however, it was mostly driven by greater ticket sizes rather than increased foot traffic.

Restaurant visits and sales fell, indicating consumer caution, but the health care and wholesale industries grew.

Building on its position as a payments technology pioneer, Fiserv, Inc. (NYSE:FI) announced its title sponsorship of the Sixth Annual PBC Conference in Washington, D.C. on August 21, demonstrating its growing influence in shaping the future of cannabis banking and compliance.

Fiserv, Inc. (NYSE:FI) is a global payments and financial technology provider that provides digital banking, merchant acquiring, e-commerce, and Clover® point-of-sale solutions to financial institutions and businesses worldwide. It is included in our list of the Best Bear Market Stocks.

2. MongoDB, Inc. (NASDAQ:MDB)

Decline in Share Price Over Past 12 Months: 16.47%

Number of Hedge Fund Holders: 72

MongoDB, Inc. (NASDAQ:MDB) is one of the 12 Best Stocks to Buy in Falling Markets According to Hedge Funds.

On August 20, 2025, Citizens JMP reiterated a ‘Market Outperform’ rating on MongoDB, Inc. (NASDAQ:MDB) with a $345 price target, indicating confidence in the database software company amid inconsistent sales indications. Analyst Patrick Walravens identified two positive indicators: sales employees exceeded quarterly attainment goals, albeit with lesser increases in Q2 compared to Q1.

Offsetting this, the firm identified one negative data point: a salesperson’s departure to a human resource management organization. Despite noting the mixed picture, Citizens JMP remained enthusiastic, highlighting MongoDB, Inc. (NASDAQ:MDB)’s solid execution and growth prospects. The research note demonstrates continued confidence as MongoDB expands its cloud-based database platform in a competitive market.

MongoDB, Inc. (NASDAQ:MDB) offers a general-purpose database platform, including the multi-cloud service MongoDB Atlas, to organizations worldwide, providing scalable, developer-friendly database solutions. It is included in our list of the Best Bear Market Stocks.

1. Comcast Corporation (NASDAQ:CMCSA)

Decline in Share Price Over Past 12 Months: 16.56%

Number of Hedge Fund Holders: 81

With a one-year share price decline and significant hedge fund interest, Comcast Corporation (NASDAQ:CMCSA) secures a spot on our list of the 12 Best Stocks to Buy in Falling Markets According to Hedge Funds.

On August 20, 2025, Comcast NBCUniversal and the Local Media Association (LMA) introduced the 2025-2026 Economic Opportunity Lab, a historic effort aimed at strengthening local journalism centered on economic mobility. The program will help 48 newsrooms and 10 NBC and Telemundo stations produce multimedia reporting based on Opportunity Insights’ research on inequality and mobility. Journalists will use resources such as the Opportunity Atlas to investigate how neighborhoods, schools, housing, and policies influence access to opportunity.

Participating sites in Chicago, DC/Baltimore, Miami, and the Bay Area will also work with

Philadelphia’s Journalism Collaborative to increase impact. The Lab, funded by Comcast Corporation (NASDAQ:CMCSA)’s $1 billion Project UP, aims to raise awareness, elevate community voices, and promote ideas that close opportunity gaps across the country.

Comcast Corporation (NASDAQ:CMCSA) is a multinational media and technology firm that provides broadband, wireless, video, streaming, film, television, and theme park services through its various business segments. It is included in our list of the Best Bear Market Stocks.

While we acknowledge the potential of CMCSA 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 CMCSA and that has 100x upside potential, check out our report about this cheapest AI stock.

READ NEXT: 12 Cheap Value Stocks to Buy Now According to Seth Klarman and 13 Hot Oil Stocks to Buy Now.

Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email below.