In this piece, we discuss the 13 Best Extremely Profitable Stocks to Invest in According to Hedge Funds.
A unique combination of disruption and resilience shaped the landscape for stocks, including highly profitable ones in 2025. As discussed in Reuters’ year-end report, significant changes in technology, geopolitics, and trade policy, along with macro headwinds rather than traditional fundamentals, drove equity performance for the year.
Among the most important developments was President Donald Trump’s announcement of import tariffs in April 2025, which increased U.S. trade policy uncertainty to an all-time high. This resulted in an effective tariff rate of nearly 17%, the highest since 1935. The U.S. economy showed resilience despite many challenges, with GDP growing at an annualized rate of 4.3% in the third quarter of 2025.
Amid broader market headwinds, certain industries even delivered exceptionally strong profitability during the year. Some industries witnessed tailwinds that supported their share price performances. For example, within the precious metals sector, the standout performers, gold and silver, ended the year 72% and 178% higher, respectively. Strong industrial demand, supply shortages, and a sharp decline in the dollar’s value helped silver reach $80 per ounce for the first time on December 29.
That said, the macroeconomic environment remains challenging, but broader market momentum remains strong. In 2025, the S&P 500 and the NASDAQ Composite gained 17.9% and 21.2%, respectively. Last month, Treasury Partners CIO Richard Saperstein spoke with Yahoo Finance, citing easing inflation, strong economic conditions, and a cooling job market as major contributors to earnings growth. Meanwhile, BNY Wealth highlighted broader-based market gains and potential corporate tax relief in 2026 as additional growth drivers.
With this context in mind, we will now shift our attention to the list of the 13 best extremely profitable stocks to invest in according to hedge funds.
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Our Methodology
To curate our list of the best extremely profitable stocks to invest in according to hedge funds, we used screeners to identify stocks with a net income (profit) margin exceeding 30%. Next, we narrowed the list to companies that have consistently delivered strong profitability over the past five years. Finally, we assessed hedge fund sentiment toward these stocks, ranking the list in ascending order by the number of hedge funds holding stakes in each stock. To assess hedge fund ownership, we used Insider Monkey’s hedge fund database, which tracks 978 stocks as of Q3 2025.
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).
13. VICI Properties Inc. (NYSE:VICI)
Number of Hedge Fund Holders: 44
As of February 2, 2026, the consensus price target for VICI Properties Inc. (NYSE:VICI) is $35.00, which implies a 24.64% upside potential. Meanwhile, 80% of analysts remain bullish on the stock.
The latest analyst update came on January 30, 2026, when Scotiabank analyst Greg McGinniss downgraded VICI Properties Inc. (NYSE:VICI) from ‘Outperform’ to Sector Perform with a $30 price target.
Earlier in the month, on January 5, 2026, Cantor Fitzgerald reduced its price target from $35 to $33, while maintaining its ‘Overweight’ rating. While discussing key catalysts, the firm cited VICI’s stable fundamentals, strong balance sheet, and well-covered dividend yield of nearly 4%. It also mentioned improving macro conditions heading into 2026 and a possible acceleration in REIT-focused M&A activity.
In early January 2026, VICI Properties Inc. (NYSE:VICI) drew Barclays’ attention, which lowered its price target on the stock from $37 to $33, reiterating its ‘Overweight’ rating. The revised target reflects tenant-related risks tied to the updated net lease assumptions. At the same time, Evercore ISI also downgraded the stock from ‘Outperform’ to ‘In Line’, cutting its price target to $32. The firm’s cautious stance stems from uncertainty around the Caesars regional gaming lease.
VICI Properties Inc. (NYSE:VICI), a gaming-focused real estate investment trust, generates consistent, long-term rental income by owning and leasing casino, hospitality, and entertainment properties across the United States.
12. Novo Nordisk A/S (NYSE:NVO)
Number of Hedge Fund Holders: 50
According to a January 28, 2026, Reuters report, Novo Nordisk A/S (NYSE:NVO) increased its advertising spending for its GLP-1 medication in the U.S. In the first nine months of 2025, the company allocated nearly $500 million to promote Wegovy and Ozempic. The allocated budget is more than twice Eli Lilly’s spending on rival treatments.
As supply constraints eased and competitive pressures increased, Novo spent $316 million on Wegovy and $169 million on Ozempic, according to MediaRadar. This highlights year-over-year increases of 54% and 44%, respectively.
The increased advertising reflects Novo’s efforts to defend its market position after Eli Lilly’s Zepbound showcased greater weight-loss efficacy in late 2024 trial data, surpassing Wegovy in U.S. prescription volume. Novo’s management also plans to immediately promote its upcoming oral version of Wegovy and boost distribution through cash-pay and direct-to-consumer channels.
On the prior day, Citi initiated coverage of Novo Nordisk A/S (NYSE:NVO) with a ‘Neutral’ rating and a DKK 400 price target, noting that the company’s valuation appears fair at current levels despite continued high demand for obesity treatments.
Novo Nordisk A/S (NYSE:NVO), a global pharmaceutical company, specializes in treating rare diseases, diabetes, and obesity.
11. Agnico Eagle Mines Limited (NYSE:AEM)
Number of Hedge Fund Holders: 57
On January 30, 2026, UBS maintained a ‘Neutral’ rating on Agnico Eagle Mines Limited (NYSE:AEM), raising its price target to $240 from $190.
Agnico Eagle Mines Limited (NYSE:AEM) announced on January 28, 2026, that Agnico Sweden, its owned subsidiary, agreed to sell its remaining 55% stake in Gunnarn Mining AB to Goldsky Resources. The agreement includes a 2% net smelter return royalty on the Barsele project, alongside $20 million in cash and 75.51 million Goldsky shares valued at C$2.64. This transaction is part of Agnico Eagle’s strategy to prioritize higher-quality internal projects, allowing it to maintain upside exposure while shifting development focus to Goldsky. Agnico Eagle now owns about 32.5% of Goldsky as a result of the agreement.
On January 26, 2026, Scotiabank reaffirmed its ‘Outperform’ rating, increasing its price target for Agnico Eagle Mines Limited (NYSE:AEM) to $276 from $219. The firm’s bullish stance reflects increased projections for gold and silver, driven by geopolitical and economic uncertainty.
Additionally, on January 29, 2026, JPMorgan initiated coverage of Agnico, assigning a ‘Neutral’ rating and a $248 target, noting that Agnico’s valuation appears fairly full at current levels despite favorable gold fundamentals.
Agnico Eagle Mines Limited (NYSE:AEM), a global gold producer, operates mines across Canada, Australia, Finland, and Mexico.
10. Copart, Inc. (NASDAQ:CPRT)
Number of Hedge Fund Holders: 59
On January 26, 2026, Copart, Inc. (NASDAQ:CPRT) strengthened its financial flexibility by announcing a new $1.25 billion unsecured senior revolving credit facility, signed on January 23, 2026. This replaces and fully repays the previous facility with options for two one-year extensions. With the agreement maturing on January 23, 2031, the company plans to advance its acquisitions, capital expenditures, share repurchases, and global expansion initiatives. Thanks to this agreement, the company now looks to capitalize on increased foreign-currency borrowing capacity and a discretionary incremental facility of up to $500 million.
Prior to its financing decision, the company experienced notable equity weakness. On January 2, 2026, Copart, Inc. (NASDAQ:CPRT)’s share price dropped to its 52-week low of $38.17, representing a 30.49% decline over the previous year. The decline reflects investor caution toward the auto-remarketing space amid broader market volatility. Even so, 60% of analysts continue to hold bullish ratings, with sell-side sentiment remaining moderately constructive.
With a consensus price target of $47.00, the stock boasts an upside potential of roughly 15.82%. This will contribute to the creation of longer-term value as market conditions stabilize, given that Copart’s scale, liquidity, and strategic flexibility remain supportive.
With a global online vehicle auction marketplace, Copart, Inc. (NASDAQ:CPRT) offers remarketing, inspection, logistics, and vehicle processing services to insurers, dealers, dismantlers, and exporters worldwide.
9. KLA Corporation (NASDAQ:KLAC)
Number of Hedge Fund Holders: 61
On January 30, 2026, KLA Corporation (NASDAQ:KLAC) attracted increased attention from analysts when Citi increased its price target from $1,450 to $1,800 while reiterating a ‘Buy’ rating. The bullish analyst stance comes amid a persistent Phase 2 upcycle in wafer fab equipment and potential upside as investor focus continues into 2027.
According to Citi, KLA Corporation (NASDAQ:KLAC)’s commentary on wafer fabrication equipment was largely in line with that of peer Lam Research. This bolstered analyst confidence in the durability of industry spending.
On the same day, RBC Capital reiterated its ‘Sector Perform’ rating on KLA Corporation (NASDAQ:KLAC) and raised its price target from $1,550 to $1,600. Although it noted that management’s low double-digit WFE growth outlook lagged behind Lam Research’s more optimistic expectations, the firm described KLA’s second-quarter performance as solid.
These analyst actions followed the company’s January 29, 2026, fiscal second-quarter earnings release. The quarter featured non-GAAP net income of $1.17 billion, or $8.85 per diluted share, reflecting sequential stability and year-over-year growth. Meanwhile, its differentiated product portfolio and solid company execution helped KLA Corporation (NASDAQ:KLAC) record revenue of $3.30 billion, above the midpoint of the guidance range of $3.225 billion +/- $150 million.
Looking into the third quarter, KLA Corporation (NASDAQ:KLAC) expects revenue of $3.35 billion +/- $150 million and non-GAAP EPS of $9.08 +/- $0.78. Management’s optimism reflects continued momentum driven by AI-related semiconductor investment.
KLA Corporation (NASDAQ:KLAC) provides process control, inspection, metrology, and yield management systems, which are critical to advanced semiconductor manufacturing.
8. Arista Networks, Inc. (NYSE:ANET)
Number of Hedge Fund Holders: 92
On January 15, 2026, Arista Networks, Inc. (NYSE:ANET) sparked fresh investor interest after announcing that it would release financial results for the quarter ended December 31, 2025, after the U.S. market close on February 12, 2026.
Expectations ahead of the report are still driven by the guidance issued with fiscal third-quarter 2025 results. Management projected fiscal Q4 2025 revenue of $2.30–$2.40 billion, a non-GAAP gross margin of 62–63%, and a non-GAAP operating margin of 47–48%, accounting for continued strength in hyperscaler demand and AI-driven networking.
Heading into the release, analyst sentiment remains positive.
Melius Research maintained a Buy rating with a $200 price target on January 5, 2026. On the same day, Piper Sandler upgraded Arista Networks, Inc. (NYSE:ANET) to ‘Overweight’ from ‘Neutral’, increasing its price target from $145 to $159. The firm declared 2026 to be a “Year of Refresh,” citing catalysts such as enterprise spending, AI exposure, and stable market share dynamics.
Giverny Capital Asset Management expressed long-term confidence in its fourth-quarter 2025 investor letter, highlighting Arista Networks, Inc. (NYSE:ANET) as a top contributor to performance. The firm pointed toward the company’s strong positioning in hyperscale and cloud data centers, evident from the 27.12% share price gain over the previous 52 weeks as of January 30, 2026. On that day, the shares closed at $141.74, taking the company’s valuation to $178.49 billion. The firm hinted at growing investor confidence in Arista’s role in AI-driven network infrastructure.
Arista Networks, Inc. (NYSE:ANET) develops cloud networking solutions, including EOS software and high-speed Ethernet switching and routing platforms. The company serves hyperscale, enterprise, and cloud customers across core, software, and service offerings.
7. Eli Lilly and Company (NYSE:LLY)
Number of Hedge Fund Holders: 114
On February 2, 2026, Reuters reported that long-standing expectations that the global obesity drug market would reach $150 billion over the next decade are being reconsidered amid declining U.S. prices for GLP-1 therapies and intensifying competition. The new projections indicate that the market will reach closer to $100 billion by 2030, which is roughly 30% less than previous estimates. Furthermore, the $150 billion mark is not expected to be reached until 2035.
Citing pressure from cash-pay competition and faster-than-expected generic entry, Jefferies reduced its peak market estimate by 20% in January. The firm’s expected market size as of 2035 stands at $80 billion.
Even with these revised assumptions, LSEG’s consensus estimates still expect Eli Lilly and Company (NYSE:LLY) to deliver more than 21% revenue growth and more than 40% adjusted earnings growth in 2026 compared to 2025.
Against this backdrop of demand, Lilly outlined its strategic initiative two days earlier.
On January 30, 2026, Eli Lilly and Company (NYSE:LLY) announced that it would construct a $3.5 billion pharmaceutical manufacturing facility in Pennsylvania, which will be its fourth new location in the United States. As GLP-1 competition accelerates, the plant will work on injectable weight-loss drug production like retatrutide, with construction expected to begin this year and operations starting in 2031.
Eli Lilly and Company (NYSE: LLY) develops and commercializes innovative medicines across diabetes, obesity, oncology, immunology, and neuroscience.
6. Mastercard Incorporated (NYSE:MA)
Number of Hedge Fund Holders: 136
On February 1, 2026, BofA lowered its price target on Mastercard Incorporated (NYSE:MA) from $616 to $610, while retaining a ‘Neutral’ rating. Two days earlier, Bryan Bergin of TD Cowen raised the price target to $671 from $668, while reiterating a ‘Buy’ rating. The firm’s bullish stance reflects strong top-line growth driven by a stable consumer and solid organic VASS momentum. Considering the company’s strong earnings and optimistic outlook amid a volatile operating environment, JPMorgan reduced its target price to $655 from $685 while maintaining an ‘Overweight’ rating.
Announced on January 29, 2026, Mastercard Incorporated (NYSE:MA)’s fourth-quarter results featured adjusted EPS of $4.76, above the $4.25 consensus, alongside an upbeat revenue figure of $8.81 billion. During the quarter, gross dollar volume grew 7% amid resilient consumer spending. At the same time, cross-border volumes increased by 14%. Around 4% of the company’s workforce will be impacted by a strategic restructuring. This will result in a $200 million charge in the current quarter to reallocate funds to priority areas.
Founded in 1966 and headquartered in Purchase, New York, Mastercard Incorporated (NYSE:MA) offers payment solutions through credit, debit, prepaid, and commercial programs under the brands Mastercard, Maestro, and Cirrus, as well as cyber and intelligence services.
5. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 183
The consensus price target for Broadcom Inc. (NASDAQ:AVGO) is $460 as of February 2, 2026, representing 38.55% upside. Nearly all analysts remain bullish on the stock.
The latest analyst update came from Wolfe Research, which raised its price target to $400 and upgraded Broadcom Inc. (NASDAQ:AVGO) from ‘Neutral’ to ‘Buy’. The bullish stance reflects the growing demand for Alphabet’s Tensor Processing Units (TPUs), which Wolfe forecasts could reach 7 million units annually by 2028.
The firm positions Broadcom Inc. (NASDAQ:AVGO) as a key beneficiary of structural change in the AI chip market, driven by Google’s plan to provide TPUs to external clients. Moreover, Wolfe improved its long-term outlook, expecting $154.5 billion in revenue and $16 EPS by 2027. Meanwhile, this year, AI networking revenue is anticipated to grow by 75%, and AI chip revenue is projected to reach $44 billion in 2026.
Wells Fargo strengthened the bullish case on January 15, 2026, upgrading Broadcom Inc. (NASDAQ:AVGO) to ‘Overweight’ and raising its price target to $430. The firm’s more optimistic stance stems from sustained AI semiconductor momentum and robust infrastructure software growth. Broadcom’s leadership in networking, data centers, and AI computing solutions continues to drive analyst confidence.
Broadcom Inc. (NASDAQ:AVGO) focuses on designing and supplying semiconductors and infrastructure software for data centers, networking, AI computing, and enterprise technology platforms worldwide.
4. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 194
As of February 2, 2026, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) maintains bullish analyst sentiment, with a consensus price target of $410. This implies upside potential of 24.03%, after the stock has already surged 40.54% over the past six months and over 10% in 2026. Nearly all the analysts maintain a bullish rating on the stock.
As a sign of confidence in the company’s long-term AI-driven demand, Bloomberg reported on January 15, 2026, that Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) plans capital spending of $52–$56 billion in 2026, an increase of at least 25% compared to 2025. The company’s U.S.-listed ADRs are expected to increase by 5.6% in 2026, with revenue growth projected to reach roughly 30%, which beats average analyst expectations.
Amid strong broader analyst sentiment, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) drew TD Cowen’s attention on January 16, 2026, when the firm increased its price target to $370 from $325 while keeping a ‘Hold’ rating. The update came in response to strong production execution and better-than-expected quarterly results.
Furthermore, Morgan Stanley raised its target by 5% to NT$2,088 on the same day, pointing to strong gross margins, rising demand for AI, and increased capital spending for advanced-node expansion. Meanwhile, Barclays raised its target to $450 with an ‘Overweight’ rating, describing the fourth-quarter results as strong across all areas.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) manufactures advanced integrated circuits and semiconductors for AI, computing, communications, automotive, and consumer electronics worldwide.
3. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 234
On January 26, 2026, according to Reuters, NVIDIA Corporation (NASDAQ:NVDA) significantly strengthened the case for faster, more efficient weather forecasting by releasing three open-source artificial intelligence models. These models are a part of NVIDIA’s broader strategy to expand its open-source AI software ecosystem beyond conventional compute workloads.
The models were unveiled at the annual meeting of the American Meteorological Society in Houston. NVIDIA plans to move away from costly and time-intensive physics-based simulations, replacing them with AI-driven alternatives that deliver faster results while keeping affordability in check.
According to management, a significant commercial use case is insurance, where firms are increasingly using large-scale simulations to assess the risks posed by extreme weather events such as hurricanes and floods. Insurance companies can now run large-scale simulations with thousands of scenarios, thanks to NVIDIA Corporation (NASDAQ:NVDA)’s AI models, which can run up to 1,000 times faster once trained.
Historically, high computational costs have been associated with the preparation of detailed ensemble forecasts. Featuring models for 15-day weather forecasts, short-term severe-storm prediction, and multi-sensor data integration, NVIDIA’s Earth-2 suite is expected to expand potential applications in commercial risk modeling and climate science.
NVIDIA Corporation (NASDAQ:NVDA) focuses on developing graphics processors and artificial intelligence platforms for use in gaming, data centers, networking, automotive systems, and advanced simulation and computing applications worldwide.
2. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 243
On January 30, 2026, it was reported by Reuters that Alphabet Inc. (NASDAQ:GOOGL)’s Google managed to convince a federal judge in San Francisco to dismiss a $2.36 billion penalty. The case relates to the company’s past collection of app activity data from users who had turned off a tracking feature.
By refusing to impose restrictions on advertising practices or order the disgorgement of alleged profits, U.S. District Judge Richard Seeborg left in place a September jury verdict that awarded plaintiffs $425 million in damages, far less than the $31 billion originally sought. Google’s request to decertify the class of 174 million devices and 98 million users was also rejected by the judge. Meanwhile, Google intends to appeal the ruling, denying any misconduct.
At the same time, investor sentiment surrounding the company’s outlook remains constructive. After the company reported strong Q4 2025 results on February 4, several analysts, including those from KeyBanc, Goldman Sachs, and Piper Sandler, raised their price targets to factor in solid execution and robust cloud growth. KeyBanc analysts noted that Alphabet is “more of a revisions than multiple expansion story,” implying that more upside will come from better earnings rather than multiple expansion.
Ahead of the results release, Roth Capital had raised its price target on the stock to $365 from $310 on January 27, 2026, while maintaining its ‘Buy’ rating. Following the results, the target was further raised to $395. Tensor processing unit partnerships, new Waymo city launches, Gemini app growth, potential Gemini 4.0 updates, and significant international events such as the FIFA World Cup and Winter Olympics were among the near-term catalysts the firm had mentioned in its earlier report. These factors are expected to support advertising demand, positioning Alphabet Inc. (NASDAQ:GOOGL) well to modestly beat consensus expectations.
Alphabet Inc. (NASDAQ:GOOGL) and its subsidiaries offer internet search, advertising, cloud computing, AI, and self-driving car solutions to consumers and businesses worldwide, leveraging AI and data-driven platforms.
1. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 273
Reuters reported on January 30, 2026, that Meta Platforms, Inc. (NASDAQ:META) is preparing to go to trial in New Mexico for allegedly exposing kids and teens to sexual exploitation on WhatsApp, Instagram, and Facebook.
The lawsuit has been filed by General Raúl Torrez, who claims that Meta turned a blind eye toward predators’ reach to minors, resulting in physical abuse and mental health harms. In the Santa Fe District Court, jury selection was scheduled for Monday, while the trial is expected to take about seven to eight weeks. Using its safety protocols and First Amendment rights, Meta has denied the accusations and plans to appeal the September verdict that granted $425 million in damages.
Amid these challenges, Meta Platforms, Inc. (NASDAQ:META) continues to advance its strategic initiatives.
On January 27, 2026, the company announced a multi-year deal with Corning valued at up to $6 billion. The partnership aims to expand AI data center infrastructure in the United States.
At the same time, analyst sentiment remains positive.
On January 29, 2026, KeyBanc increased its price target from $835 to $855 while reiterating an ‘Overweight’ rating. The bank attributed its bullish stance to Q4 results, alongside productivity gains driven by AI, and projected revenue growth of over $90 billion between 2025 and 2027.
Meta Platforms, Inc. (NASDAQ:META) owns several social media platforms, including Facebook, Instagram, WhatsApp, and Messenger. Its Reality Labs segment develops social media, immersive, and AI-driven technologies while expanding digital communication and AI infrastructure globally.
While we acknowledge the potential of META 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 META and that has 100x upside potential, check out our report about this cheapest AI stock.
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