“It seems like the momentum stocks that have got us here still remain in favor with our customers.” This was highlighted by Steve Sosnick, Chief Strategist at Interactive Brokers, in a late December 2025 interview with CNBC. Sosnick said the market environment is marked by continuous retail inflows, while citing data from his firm’s platform. According to this data, in most weeks, the vast majority of the 25 most actively traded stocks on the platform are net buys, meaning more clients are buying than selling. Popular stocks include Tesla, NVIDIA, Micron Technology, Oracle, Broadcom, and Palantir Technologies.
The broader market environment also supports momentum stocks. The S&P 500 Index has already closed in on the 7,000 level, up 1% year to date, and several Wall Street strategists’ estimates over the last two to three months indicate it could reach as much as 7,800 this year.
READ ALSO: 11 Best Machine Learning Stocks to Buy According to Analysts and 12 Best Software Infrastructure Stocks to Buy According to Hedge Funds.
Despite index-level strength, select momentum names are still trading at valuation discounts relative to their earnings growth. In a February 19, 2026, interview, Tom Lee, Head of Research at Fundstrat, said he believes the S&P 500 could rise toward 7,300 in the near term. Lee said that a large percentage of companies have exceeded earnings expectations, but stock prices have not fully reflected that strength due to pressure on valuation multiples. He argued:
”I think the stocks haven’t reflected that, because we’ve had a huge beat, a large percentage of companies beating. It has shown up, I guess, in small caps.” He added further, “I mean, there’s this old adage that it takes a whole lot of E to offset PE. Meaning like you’re right, the earnings have been good, but things that have affected multiples are what’s causing the market to come in. You know, AI, a new Fed chair, potential war. So, you’re right. I think the fundamental anchoring is actually good. So that means stocks eventually kind of re-anchor to that and we go higher.”
Finally, Lee suggested that NVIDIA’s upcoming earnings could be important. A strong report could help calm fears about AI spending and potentially mark a turning point, especially for software stocks that have been in decline.
Within this context, momentum stocks that continue to post strong results but trade at discounts to their recent peak multiples stand out. In some cases, technology names are now trading at relative valuations below historical levels despite maintaining strong competitive positions and benefiting from structural themes such as AI adoption and digital transformation.
With that backdrop, let’s explore our selection of the 15 undervalued momentum stocks that are taking off.
Our Methodology
To identify undervalued momentum stocks that are taking off, we first compiled a list of U.S.-listed stocks with a market capitalization of at least $2 billion that have returned at least 20% over the last three months. From this universe, we shortlisted stocks with a forward PE below 15 and with the 50-day moving average above the 200-day moving average, indicating a bullish trend. We then used Q3 2025 data from Insider Monkey’s database to determine hedge fund ownership and narrowed the list to the 15 most widely held names. Finally, the stocks were ranked 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).
15. Liberty Energy Inc. (NYSE:LBRT)
Number of Hedge Fund Holders: 44
Citi increased its price target on Liberty Energy Inc. (NYSE:LBRT) to $32 from $21, according to a report on February 17. The firm cited two reasons for this revision: first, its confidence that the company will achieve and exceed the 2029 capacity target of 3 gigawatts (GW), driven by strong demand from hyperscale companies. Second, the company’s competitive positioning amid the increasing need to make residential utility bills affordable.
In an early February report, Goldman Sachs maintained its Neutral rating on Liberty Energy Inc. (NYSE:LBRT) but raised its price target to $26 from $20, citing growing confidence in the company’s power solutions segment. In that regard, the first factor the firm highlighted was the company’s recent power reservation agreements, which support growth. Secondly, similar to Citi, Goldman now expects the company to support the deployment of 3GW of power capacity by 2029, up from earlier expectations.
According to Goldman, both developments indicate that Liberty’s data center power strategy is gaining momentum, as evidenced by the recent deal with Vantage Data Centers.
The aforesaid deal with Vantage was announced in early January 2026, under which Liberty’s subsidiary, Liberty Power Innovations (LPI), and Vantage will collaborate to deliver up to 1GW of power agreements between LPI and end-users of Vantage’s data centers over the next five years.
Such developments and views have supported Liberty Energy Inc.’s (NYSE:LBRT) recent share price gains. Its stock has gained around 45% since the start of 2026, as of February 20, a strong performance after a 7% decline in 2025.
Before Goldman, Josh Silverstein at UBS raised Liberty’s price target from $23 to $34, the highest among analysts covering the stock, and implying a 27% upside from the February 20 close. Silverstein reaffirmed his Buy rating as well.
Liberty Energy Inc. (NYSE:LBRT) is an energy services company and one of the largest providers of completion services and technologies to onshore oil, natural gas, and enhanced geothermal energy producers in North America. Liberty also owns and operates Liberty Power Innovations LLC, providing advanced distributed power and energy storage solutions.
14. Edison International (NYSE:EIX)
Number of Hedge Fund Holders: 45
On February 13, Edison International (NYSE:EIX) was downgraded from Buy to Neutral by UBS, which cited the company’s valuation as the primary reason. However, the firm raised its price target by about 11% to $78 (from $70), according to a TipRanks report.
UBS stated that Edison’s share price has appreciated by around 21% over the last six months, outperforming the Dow Jones Utility Index, which rose a mere 1% during the same period. This outperformance leaves little upside based on the firm’s estimates and is not sufficient to support a Buy rating; thus, UBS has stepped to the sidelines.
This report also notes that UBS believes the risk/reward is balanced in the near term. The analysts argue that the potential resolution of the Eaton fire liability is supportive, but the Phase 2 wildfire legislation would still take around six months, which would weigh on the share price in the near term. Moreover, the upcoming California gubernatorial election poses policy and regulatory risks, according to UBS.
After a strong rally since 2020, the share price peaked in late 2024 at around $88 and nearly halved by mid-2025. It closed 2025 down 25% but has partially recovered since the start of 2026, with gains of 23% so far.
The broader analyst consensus is cautious on Edison International (NYSE:EIX), with more analysts assigning a Hold or Sell rating (53%) than a Buy (47%). Based on these analysts’ estimates, the 1-year median price target of $73 implies a 1% downside.
Edison International (NYSE:EIX) is a public utility holding company that, through its subsidiaries, generates and distributes electric power. Its subsidiary Southern California Edison delivers electricity to 15 million residential, commercial, industrial, public authorities, agricultural, and other customers across Southern, Central, and Coastal California. The company also provides energy solutions to commercial and industrial users.
13. BorgWarner Inc. (NYSE:BWA)
Number of Hedge Fund Holders: 45
On February 12, Deutsche Bank upgraded BorgWarner Inc. (NYSE:BWA) to Buy from Hold and raised its price target substantially from $46 to $82, following the company’s Q4 2025 results. As the reason for the revision, Deutsche Bank believes that BorgWarner is undergoing a “pivotal shift” by entering the AI data center infrastructure market, which could substantially bolster the company’s growth prospects. In its note, Deutsche said:
“BorgWarner’s strategic entrance into the AI data center market, in our view, is a pivotal shift from being a traditional Tier-1 powertrain supplier to a more diversified multi-industrial entity – a move that warrants a valuation re-rate.”
These highly optimistic views followed the company’s February 11 announcement of an agreement with TurboCell, a subsidiary of full-stack data center infrastructure developer Endeavour, to supply a highly modular turbine generator system. The Company expects production to begin in 2027 with a target of 2 GW of initial installed capacity.
According to Deutsche Bank’s estimates, this project could add over $300 million in revenue in 2027. However, the analysts estimate that revenue would be substantially higher than initial estimates if the full 2 GW buildout over the next several years is accounted for.
On a further positive note, margins on this incremental revenue are expected to be in the mid-teens, which should significantly bolster earnings. Deutsche analysts argued:
“The revenue should increment at mid-teens margin to start, suggesting large scale isn’t even necessary for profitability.”
As of February 20, BWA shares are trading 16% below their 52-week high.
BorgWarner Inc. (NYSE:BWA) provides clean and efficient technology solutions for combustion, hybrid, and electric vehicles worldwide. Its products help improve vehicle performance, propulsion efficiency, stability, and air quality.
12. Citizens Financial Group Inc. (NYSE:CFG)
Number of Hedge Fund Holders: 48
According to a February 9 report from TipRanks, JPMorgan raised its price target on Citizens Financial Group Inc. (NYSE:CFG) to $71 from $62.50 while maintaining an Overweight rating, reflecting a constructive outlook on large-cap banks. The firm updated its sector assumptions to incorporate expectations of two rate cuts, while expecting long-term yields to “remain sticky with inflation concerns.”
According to JPM analysts, the current backdrop remains supportive for bank stocks. A favorable regulatory environment and accelerating consolidation trends across the industry are expected to provide additional tailwinds. JPMorgan also believes that bank stocks are well-positioned to benefit from ongoing sector rotation, supported by resilient economic conditions and steady underlying fundamentals.
Earlier this month, in the first week of February, Evercore ISI analyst John Pancari reaffirmed his Outperform rating on the stock and raised his price target from $69 to $77, reflecting updated estimates following the Q4 results.
Citizens Financial Group Inc. (NYSE:CFG) stock has performed strongly recently, with 33% returns in 2025 and nearly 12% year-to-date in 2026. At $65.3, the stock is trading near the top of its 52-week range and 5% short of its 52-week high of $68.8. Analyst consensus still remains strongly positive, with the majority (over 90%) of analysts rating the stock with a Buy or equivalent rating.
Citizens Financial Group Inc. (NYSE:CFG) operates as the bank holding company that provides retail and commercial banking products and services to individuals, small businesses, middle-market companies, large corporations, and institutions in the United States. At December 31, 2025, the company had total assets of $226.4 billion and total deposits of $183.3 billion.
11. KeyCorp (NYSE:KEY)
Number of Hedge Fund Holders: 48
In a recent note, JPMorgan analysts shared their constructive macro view on the large-cap banking space. With that supportive backdrop, the firm lifted its price target on KeyCorp (NYSE:KEY) to $24.50 from $22 on February 9, while maintaining a Neutral rating, according to The Fly. The firm revised its sector targets to reflect expectations for two rate cuts, with long-term yields likely to remain elevated amid continued inflation concerns.
JPMorgan believes that the broader banking environment remains constructive. In their view, a favorable regulatory stance and rising consolidation activity are expected to underpin the sector, while ongoing sector rotation and stable economic conditions are also expected to provide additional support. The firm also expects bank stocks to hold up on steady fundamentals.
Another analyst with a slightly more bullish view is Evercore ISI’s John Pancari. In his note from the first week of February, Pancari not only maintained an Outperform rating on KeyCorp (NYSE:KEY) but also raised the price target to $26 from $25 after revising his estimates following Q4 results.
KeyCorp (NYSE:KEY) stock is up 8% so far in 2026, after delivering a 20% return in 2025. At $22.2, it trades approximately 5% below its 52-week high, with a consensus median price target of $24, implying an additional 8%-9% upside.
KeyCorp (NYSE:KEY) is the parent holding company for KeyBank National Association, its principal subsidiary. Through KeyBank and certain other subsidiaries, the company provides a wide range of retail and commercial banking, commercial leasing, investment management, investment banking, and other financial services to individual, corporate, and institutional clients.
10. Olin Corporation (NYSE:OLN)
Number of Hedge Fund Holders: 48
Deutsche Bank raised its target price on Olin Corporation (NYSE:OLN) from $23 to $26 while maintaining its Hold rating, according to a February 10 report from The Fly. The rating was issued days after the company reported weaker Q4 2025 earnings and provided softer guidance for FY 2026.
For Q4, the company reported sales of $1.67 billion, which were flat year over year (YoY) compared with the same quarter last year. Sales in its largest segment, Chlor Alkali Products and Vinyls, were down 10% YoY, which weighed on overall sales. However, profitability also fell short of expectations, with adjusted EBITDA declining 65% YoY to $67.7 million. Reported net loss for the quarter widened to $85.7 million or $0.75 per share, down from a net income of $10.7 million or $0.09 per share. The consensus was expecting a loss of $0.62 per share.
With cost pressures expected to persist, the company expects its first-quarter 2026 adjusted EBITDA to be lower than fourth-quarter 2025 levels.
On the softer results, Ken Lane, President and Chief Executive Officer, said:
”During the fourth quarter, we experienced continued headwinds related to the trough market environment exacerbated by customer destocking as well as planned maintenance turnarounds and unplanned operating events.” On the positive side, he argued, “We have begun to see benefits from our Beyond250 initiative, realizing a $44 million reduction in structural costs in 2025. As a result of proactive actions taken, we generated $321.2 million of operating cash flow in fourth quarter 2025 and ended the year with net debt comparable to year-end 2024.”
The results have led analysts to adopt a cautious outlook, resulting in downward revisions to price targets. Among these firms, BMO Capital lowered its price target marginally from $25 to $24, while Citi and RBC Capital lowered theirs from $24 to $21.
Olin Corporation (NYSE:OLN) is a leading vertically integrated global manufacturer and distributor of chemical products and a leading U.S. manufacturer of ammunition. The chemical products produced include chlorine and caustic soda, vinyls, epoxies, chlorinated organics, bleach, hydrogen, and hydrochloric acid.
9. Toll Brothers Inc. (NYSE:TOL)
Number of Hedge Fund Holders: 51
On February 19, UBS analyst John Lovallo maintained his optimistic outlook on Toll Brothers Inc. (NYSE:TOL), assigning a Buy rating and increasing the price target to $198 from $181. According to the TipRanks report, the analyst said, “Better housing days lie ahead.”
Separately, on February 17, Toll Brothers Inc. (NYSE:TOL) reported steady first-quarter 2026 results. While Home Sales revenue was up 0.8% year over year (YoY) to $1.85 billion, total reported revenues for the quarter grew 15.4% year over year to $2.15 billion, ahead of the consensus expectation of $1.86 billion. The topline growth was supported by $290.6 million in land sales and other revenue, as compared to $18.4 million in Q1 2025.
Adjusted home sales gross margin for the quarter came in at 26.5%, 40 basis points below last year’s quarter and 25 basis points above the company’s guidance. GAAP EPS came in at $2.19, up from $1.75 in the same quarter of the prior year, and ahead of the consensus of $2.12 (TradingView data).
For 2026, Toll Brothers maintained its guidance for deliveries of 10,300–10,700 units and an average delivered price per home of $970,000-$990,000.
A week before the results announcement, on February 10, Oppenheimer had reaffirmed its Outperform rating on Toll Brothers Inc. (NYSE:TOL) and raised its price target to $177 from $155. The firm acknowledged Toll Brothers’ stock outperformance versus the broader market and believes that better supply-demand conditions are supporting the performance, along with benefits from the political backdrop and market rotation. Oppenheimer had expected the company to report in-line EPS for Q1.
Toll Brothers Inc. (NYSE:TOL) designs, builds, markets, sells, and arranges financing for a range of detached and attached homes in luxury residential communities in the United States. It serves first-time, move-up, active-adult, and second-home buyers. The Company also operates its own architectural, engineering, mortgage, title, land development, smart home technology, landscape, and building components manufacturing businesses.
8. Ovintiv Inc. (NYSE:OVV)
Number of Hedge Fund Holders: 52
On February 18, UBS reiterated Ovintiv Inc. (NYSE:OVV) as its top Oil E&P pick following the announcement of the $3 billion Anadarko Basin divestiture. The firm also raised its price target on the stock from $55 to $58 and reaffirmed a Buy rating.
The analyst noted that the combined impact of the NuVista deal and the Anadarko sale helps the company address investor concerns about crude and condensate inventory and leverage. Despite these structural improvements, Ovintiv continues to trade at one of the lowest valuation multiples within the E&P peer group. UBS argues that, in view of these changes, the current discount would be increasingly difficult to justify. Thus, the analyst appears to suggest scope for multiple expansion.
A day earlier, Ovintiv Inc. (NYSE:OVV) announced an agreement to sell its Anadarko assets in Oklahoma for $3.0 billion in cash to a buyer whose identity has not been disclosed. The divestiture includes roughly 360,000 net acres, representing substantially all of Ovintiv’s acreage in the play. The transaction is expected to close in early Q2 2026.
On the announcement, Brendan McCracken, Ovintiv President and CEO, stated:
”This transaction marks a significant milestone by focusing our portfolio, delivering on our debt target, and unlocking increased returns to our shareholders.” He further added, “We have built one of the deepest premium inventory positions in our industry in the two most valuable plays in North America, the Permian and the Montney. This positions us to deliver superior returns for our shareholders for many years to come.”
Management also plans to provide updated 2026 guidance and a revised shareholder return framework alongside Q4 and full-year 2025 results on February 23, 2026.
Ovintiv Inc. (NYSE:OVV) is a leading North American energy producer focused on developing its multi-basin portfolio of oil, natural gas liquids, and natural gas producing plays.
7. U.S. Bancorp (NYSE:USB)
Number of Hedge Fund Holders: 56
On February 9, JPMorgan reiterated its Underweight rating on U.S. Bancorp (NYSE:USB) but raised its price target from $55.5 to $62. This revision comes amid JPM’s estimate revisions across the large-cap banks, with the firm noting that markets continue to price in two rate cuts while long-term yields “remain sticky with inflation concerns.”
That said, JPM also acknowledged that bank stocks have demonstrated resilience, supported by sector rotation, stable economic conditions, and steady underlying fundamentals. They also see a supportive regulatory environment and ongoing bank consolidation activity as tailwinds to the sector.
Broader sentiment towards the stock remains cautious, as two other analysts have also reaffirmed their neutral stances during the first week of February despite raising their price targets. Around February 4, UBS raised its price target to $60 from $57 with a Neutral rating, and a day later, Evercore ISI analyst John Pancari also increased his price target on USB to $65 from $60 while keeping an In Line rating.
Overall, 50% of analysts who cover the stock rate it Buy or equivalent, and the consensus 1-year median price target of $62 implies a 6%-7% upside. With year-to-date returns of around 10%, the stock currently trades at $58.76, near the top of its 52-week range.
U.S. Bancorp (NYSE:USB), a financial services holding company, provides various financial services to individuals, businesses, institutional organizations, governmental entities, and other financial institutions in the United States. It operates in Corporate and Commercial Banking, Consumer and Business Banking, Wealth Management and Investment Services, Payment Services, and Treasury and Corporate Support segments.
6. The PNC Financial Services Group Inc. (NYSE:PNC)
Number of Hedge Fund Holders: 59
According to a February 9 report from The Fly, JPMorgan raised its price target on The PNC Financial Services Group Inc. (NYSE:PNC) from $228.50 to $251. The firm also maintained an Overweight rating as it continues to have a constructive outlook on large-cap banks. The firm updated its sector estimates to reflect expectations of two rate cuts, while expecting long-term yields to “remain sticky with inflation concerns.”
Besides The PNC Financial Services Group Inc. (NYSE:PNC), JPM has also reiterated a similar thesis for other large-cap banks, including KeyCorp, Citizens Financial Group, and U.S. Bancorp. The firm views current market conditions as supportive of bank stocks, driven by a favorable regulatory environment and accelerating industry consolidation. The firm also expects bank stocks to benefit from ongoing sector rotation, supported by resilient economic conditions and steady underlying fundamentals.
Earlier, on January 20, Oppenheimer increased its price target of the stock from $268 to $284 and maintained an Outperform rating, citing strong full-year 2025 results. The firm, which prefers commercial banks over investment banks, views PNC as benefiting from both organic and inorganic factors, including the recent acquisition of FirstBank.
The PNC Financial Services Group Inc. (NYSE:PNC) stock has performed steadily recently, with 8% returns in 2025 and nearly 12% year-to-date in 2026. At $232.7, the stock is trading around 5% below its 52-week high of $243.9.
The PNC Financial Services Group Inc. (NYSE:PNC) is one of the largest diversified financial institutions in the U.S., with businesses engaged in retail banking, including residential mortgage, corporate and institutional banking, and asset management.
5. Devon Energy Corporation (NYSE:DVN)
Number of Hedge Fund Holders: 59
Following Devon Energy Corporation’s (NYSE:DVN) Q4 2025 results, Nick Pope, an analyst at Roth Capital, raised his price target on the stock from $42 to $50 and reiterated a Buy rating on February 19. The analyst attributed the strong results to robust oil production, particularly by the Delaware Basin asset.
For Q4 reported on February 17, Devon Energy Corporation (NYSE:DVN) reported revenue of $4.12 billion, down 6.4% year over year but 14% ahead of the consensus of $3.61 billion. Adjusted EPS was $0.82, which was only slightly below the street expectation of $0.83. On production, the company averaged 390,000 barrels of oil per day in the fourth quarter, at the top end of its guidance. This accounted for 46% of total production, which stood at 851,000 barrels of oil equivalent per day (Boe/d). The company generated adjusted free cash flow of $702 million for Q4 (vs. $738 million in Q4/24) and $3.12 billion for the full year.
For Q1 2026, the impact of severe winter is expected to reduce production by 1%, or by 10,000 Boe/d. Capex is expected to be around $900 million. The company is also planning to increase its quarterly dividend rate by 31% to $0.315 per share following the merger with Coterra Energy. A new share repurchase authorization of over $5 billion is also being considered after the merger is completed.
Devon Energy Corporation (NYSE:DVN) is a leading U.S. oil and gas producer with a diversified multi-basin portfolio, led by its Delaware Basin assets.
4. Tenet Healthcare Corporation (NYSE:THC)
Number of Hedge Fund Holders: 65
Following Tenet Healthcare Corporation’s (NYSE:THC) Q4 update, Wells Fargo lifted its target from $229 to $265 and maintained its Overweight rating on February 16. The firm noted that the investor reaction after the Q4 results was somewhat “surprising,” given that EBITDA had been largely pre-announced and guidance had come in broadly in line with expectations. The stock had rallied 17% after the company announced Q4 results on February 11.
According to Wells Fargo, the strong move was not due to incremental earnings revisions, but rather to improving investor conviction around capital return potential and Tenet’s alignment with prevailing market narratives, which “appear to be important drivers.”
In its Q4 update on February 11, the company reported revenue of $5.53 billion, 1% above the consensus of $5.47 billion. Adjusted EPS grew 37% year over year and came in at $4.70, which was ahead of the street expectation of $4.05. For FY 2026, the company guided for revenue of $21.5-$22.3 billion and adjusted EBITDA of $4.485-$4.785 billion. EPS for the year is expected to be in the range of $16.19-$18.47, which was again ahead of the consensus of $16.46 at the mid-point.
Several other analysts raised their price targets after the results. Among them, Morgan Stanley raised its price target to $260 from $247, RBC Capital to $277 from $253, and KeyBanc to $250 from $225.
After strong 57% returns in 2025, the stock has rallied another 16% so far in 2026. At $230, the stock currently trades close to its 52-week high of $235.8, as of February 20.
3. Revolution Medicines Inc. (NASDAQ:RVMD)
Number of Hedge Fund Holders: 71
JPMorgan added Overweight-rated Revolution Medicines Inc. (NASDAQ:RVMD) to its “Positive Catalyst Watch” list as per a February 17 report. The development came ahead of the RASolute 302 second-line pancreatic ductal adenocarcinoma readout expected in H1 2026.
According to the report, JPMorgan is confident in Daraxonrasib, citing encouraging performance trends for the drug relative to the historical chemotherapy benchmark. The firm sees a positive outcome as median overall survival in the 9–10 months range, alongside a hazard ratio in the mid-0.6-low-0.7 range.
Before this update, early in the first week of February, JPMorgan analyst Brian Cheng had raised his price target on Revolution Medicines Inc. (NASDAQ:RVMD) by around 33% to $122 (from $92), citing updates to the company’s financial model. The firm maintained an Overweight rating.
Earlier, at the end of January, Oppenheimer analyst Jay Olson doubled his price target on the stock from $75 to $150, as the firm believes that Revolution Medicines Inc. (NASDAQ:RVMD) could be an attractive acquisition candidate in 2026, particularly as the company is expected to see multiple milestones this year.
Revolution Medicines shares have performed well, with over 140% returns in the past year and gains of 28% in 2026 as of February 20. However, the stock currently trades 18% below its 52-week high of $124.5.
Revolution Medicines Inc. (NASDAQ:RVMD) is a late-stage clinical oncology company developing novel targeted therapies for patients with RAS-addicted cancers. It has several RAS(ON) inhibitors currently in clinical development, including daraxonrasib (RMC-6236).
2. Newmont Corporation (NYSE:NEM)
Number of Hedge Fund Holders: 74
Following the company’s Q4 results on February 19, BMO Capital Markets reduced its price target on Newmont Corporation (NYSE:NEM) from $145 to $140 but maintained its positive outlook with an Outperform rating. However, the analysts highlighted some concerns over the outlook, including elevated costs and lower production.
In its Q4 2025 results, Newmont topped consensus EPS estimates of $2.00 (LSEG) by reporting earnings of $2.52 per share or $2.8 billion, which almost doubled year over year (YoY). Despite 14% lower production on a YoY basis, FY 2025 results were bolstered by a 45% higher average realized gold price. The company also reported a record $2.8 billion in free cash flow in Q4, bringing the year’s total to $7.3 billion. In addition, it reduced its debt by $3.4 billion in 2025, ending the year with a net cash position of $2.1 billion, including $7.6 billion in cash.
For FY 2026, Newmont Corporation (NYSE:NEM) guided for attributable production to be approximately 5.3 million gold ounces, down from 5.89 million in 2025. While production is impacted by planned mine sequencing and lower contribution from some mines, management expects to continue focusing on lowering costs through its cost and productivity programs. The management further noted:
”2026 represents a trough in our production cycle due to planned mine sequencing across several operations as we position the portfolio to return to production growth in 2027 and beyond, maintaining our longer-term outlook of approximately 6 million ounces of gold and 150,000 tonnes of copper annually.”
Newmont Corporation (NYSE:NEM) shares have performed strongly, with over 168% returns in the past year and over 22% gains in 2026 as of February 20. The stock currently trades 10% below its 52-week high of $134.9.
Newmont Corporation (NYSE:NEM) is the world’s leading gold company and a producer of copper, zinc, lead, and silver. The company’s portfolio of assets is focused on mining jurisdictions in Africa, Australia, Latin America & Caribbean, North America, and Papua New Guinea.
1. Micron Technology Inc. (NASDAQ:MU)
Number of Hedge Fund Holders: 105
According to a February 9 report, TD Cowen raised its long-term earnings outlook for Micron Technology Inc. (NASDAQ:MU). The firm now expects that MU’s EPS may reach as much as $60 in 2026, above its prior bull-case assumption of $50. The revision reflects the firm’s view that structural supply capacity issues in the DRAM market are likely to persist for multiple years. This implies that the company may continue to witness stronger pricing and margin development, better than previously anticipated.
TD Cowen outlines a “gradual re-rating path” toward a 12x multiple applied to a normalized earnings base of roughly $50 per share, which underpins its longer-term upside thesis. According to the firm’s estimates, better-than-expected earnings growth could lead to a stock price of $600 over time.
Micron Technology Inc. (NASDAQ:MU) received a further boost when its management strongly backed its HBM4 product at Wolfe Research’s Autos/Semis conference on February 11. Notably, the leadership said they expect to start shipping the product in the current quarter rather than next, as previously guided. They also mentioned that demand is “significantly higher” than its supply capacity, thus underpinning demand trends beyond 2026.
The performance of Micron Technology Inc. (NASDAQ:MU) shares has been stunning, with 240% returns in 2025 and 50% rally so far in 2026. The stock currently trades 6% below its 52-week high of $455.5.
Micron Technology Inc. (NASDAQ:MU) designs, develops, manufactures, and markets memory and storage products, including dynamic random-access memory (DRAM), flash memory (NAND), solid-state drives (SSDs), and High Bandwidth Memory (HBM) globally.
While we acknowledge the potential of MU 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 MU and that has 100x upside potential, check out our report about this cheapest AI stock.
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