On October 22, Vios Advisors’ Michael Bapis and BNY’s Alicia Levine joined CNBC’s ‘Closing Bell’ to discuss the latest news affecting markets. Levine mentioned the recent ‘vol’ scare briefly shaved 3% off the top of the market but ultimately proved that corporates are resilient. She also mentioned that the tariff conversation was quickly absorbed by the markets. Talking about what advice was being given to clients, Bapis described the current situation as a huge juggling act for the markets. He pointed out the skepticism surrounding the incoming CPI numbers due to the government shutdown, contrasted with the strong and resilient earnings reported by many companies. For clients, the advice is to maintain a balanced portfolio where alternatives are very important. Bapis also emphasized that the AI phenomenon is not being discussed enough, calling it the potential global revolution on the level of infrastructure advancements like railroads, and asserting that this technological step is only in its first or second inning.

The combination of strong earnings, a resilient economy, and rate cuts makes it hard to bet against the market, even with concerns around the edges. Levine believes that the presence of these concerns is viewed as healthy, suggesting a desirable two-way conversation in the market rather than a straight rocket ship up. The previous 3% pullback ten days prior provided this necessary conversation. It was agreed that if earnings continue to exceed expectations and the AI trade remains intact, the market will see its next leg higher. Technically, however, the S&P 500 needs to decisively pass the 6,800 level to convince analysts of this next leg, though Levine believes it will reach that point fundamentally. Bapis also pointed out that the fact that the dual challenges to the bull case only resulted in a 3% pullback meant the market did not get the necessary reset lower. The necessary reset may instead have to occur sector by sector, evidenced by some speculative stocks moving down on the day.

That being said, we’re here with a list of the 12 hot stocks to buy with huge upside potential.

Our Methodology

We sifted through different stock screeners to compile a list of hot stocks with the highest performance over the past 3 months (over 100%) and with high upside potential (over 55%). 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 22. 

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 Hot Stocks to Buy with Huge Upside Potential

12. Mobilicom Limited (NASDAQ:MOB)

3-Month Performance as of October 22: 100.54%

Number of Hedge Fund Holders: 3

Average Upside Potential as of October 22: 55.83%

Mobilicom Limited (NASDAQ:MOB) is one of the hot stocks to buy with huge upside potential. On October 20, ThinkEquity analyst Ashok Kumar raised the firm’s price target on Mobilicom to $12 from $5 and kept a Buy rating on the shares. This sentiment came out as the firm noted that the company is transitioning to a more profitable and scalable business model around its OS3 cybersecurity platform for AI-powered drones.

ThinkEquity believes that the defense market’s rapid pivot to unmanned systems in the middle of geopolitical and policy tailwinds will drive a revenue inflection for Mobilicom.

Mobilicom Limited (NASDAQ:MOB) provides hardware products and software and cybersecurity solutions for drones, small-sized unmanned aerial vehicles/SUAV, and robotics in Israel, the US, Canada, and internationally.

11. Nektar Therapeutics (NASDAQ:NKTR)

3-Month Performance as of October 22: 151.34%

Number of Hedge Fund Holders: 18

Average Upside Potential as of October 22: 61.86%

Nektar Therapeutics (NASDAQ:NKTR) is one of the hot stocks to buy with huge upside potential. On October 22, Nektar Therapeutics announced that new data from the ongoing REZOLVE-AD Phase 2b study of rezpegaldesleukin was accepted for a late-breaking oral abstract presentation. Rezpegaldesleukin is an IL-2 pathway agonist and regulatory T-cell/Treg proliferator being investigated for the treatment of atopic dermatitis.

The REZOLVE-AD Phase 2b study enrolled 393 patients with moderate-to-severe AD who had no prior treatment with biologic or JAK inhibitor therapies. Patients were enrolled across ~110 sites globally. The study’s primary endpoint is the mean improvement in EASI score at the end of the 16-week induction period.

Rezpegaldesleukin is a potential first-in-class resolution therapeutic wholly owned by Nektar Therapeutics, which is focused on addressing the underlying immunological dysfunction in autoimmune and chronic inflammatory diseases. The drug is a novel, first-in-class regulatory T cell stimulator being developed as a self-administered injection for multiple autoimmune and inflammatory conditions, including atopic dermatitis, which affects ~30 million people in the US.

Nektar Therapeutics (NASDAQ:NKTR) is a biopharmaceutical company that discovers and develops therapies that selectively modulate the immune system to treat autoimmune disorders in the US and internationally.