Communication Services is an attractive universe where investors can gain exposure to underlying services such as Media, Telecommunication, Entertainment, and Information Sharing. They can also benefit from technological advancements across various domains that offer growth opportunities and diversification. The sector has become attractive due to widespread digital connectivity and strong integration with AI capabilities.
One factor that will heavily influence business outcomes within the Communication Services is AI advancements. However, many businesses are still struggling when it comes to optimal utilization of AI technologies. On December 10, Deloitte published its Tech Tends 2026 report, which also addressed the so-called AI dilemma. As per the report, apart from adapting AI capabilities in data, models, applications, and infrastructure, businesses should also focus more on AI-enabled defense systems against cyber threats. The report included the following comments from Broadcom’s CIO:
”Without focusing on a specific business problem and the value you want to derive, it could be easy to invest in AI and receive no return.”
Despite these challenges, the sector still offers lucrative growth opportunities in select areas. In a mid-December report, Cartesian, a specialist consulting firm focused on the global telecommunications, media, and technology (TMT) industries, said that “the lines between linear, streaming, and social media consumption have blurred”. For Telecoms, they argued that operators will increasingly focus on retaining market share through enhanced streaming bundles, content integration, and upgrade incentives. Agentic AI will help optimize network capabilities, and AI-driven customer experience will partially shape operators’ engagement and operational strategies.
That said, the S&P 500 Communication Services Sector Index has outperformed the S&P 500 for the past three consecutive years, with gains of 32.4%, 38.9%, and 54.4% in 2025, 2024, and 2023, respectively.
With that background, let’s explore our 20 Most Favored Communication Services Stocks According to Hedge Funds.
Copyright: bluebay / 123RF Stock Photo
Our Methodology
To identify relevant stocks for this article, we began by screening U.S.-listed companies within the communication services sector having market capitalizations above $2 billion. We then added a filter to exclude companies with share prices below $5 to avoid penny stocks. We also shortlisted only stocks with at least 10% upside potential according to TipRanks consensus. Therefore, some well-known names, such as Alphabet or Comcast, may not appear on this list.
In the final part of the screening, we identified the number of hedge funds that held positions in these stocks as of the end of the third quarter of 2025. Finally, we selected 20 stocks with the highest number of hedge funds holding stakes and ranked them in ascending order.
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).
20. Imax Corporation (NYSE:IMAX)
Sector/Industry: Communication Services (Entertainment)
Share Price: $34.13
Potential Upside: 28.9%
Number of Hedge Fund Holders: 25
IMAX Corporation (NYSE:IMAX) is one of the best communication services stocks according to Hedge Funds.
On January 5, Mike Hickey from Benchmark Co. reiterated his Buy rating for IMAX Corporation (NYSE:IMAX). The analyst set a price target of $42, which results in an upside of 23%. He labeled the stock as a 2026 Entertainment & Digital Media (EDM) Top Idea, based on several structural factors, including a favorable outlook on the company’s global box office share that currently stands above $1.25 billion.
Hickey also referred to the company’s rising operating leverage and network expansion that backs his bullish stance, following a record performance during 2025. These factors have pushed the company’s adjusted EBITDA margins up to the mid-40% range. He sees IMAX’s differentiation in its asset-light platform, which offers high utilization and strong free cash flow conversion rates.
On December 18, Wells Fargo analyst Omar Mejias also reaffirmed his Buy rating for the company. Based on his bullish views, he raised the stock’s price target from $40 to $47. His revised estimates give investors an attractive upside potential of almost 38%.
Mejias increased his price target based on the company’s diversified business model that is strongly positioned to benefit from evolving trends within the industry. The analyst highlighted an accelerated demand for premium, event-driven cinema and local-language hit-making. Mejias sees Imax Corporation (NYSE:IMAX) as being well prepared to capitalize on such a noticeable shift, given their enhanced visibility, expansion of total addressable market, and a high level of operating leverage.
IMAX Corporation (NYSE:IMAX) operates within the entertainment industry and functions as a technology platform. The company runs globally through content, technology, and services segments. They specialize in motion-picture technologies, as well as large-format motion-picture presentations. Other offerings include film remastering, streaming technology software, film and digital cameras, and post-production services.
19. StubHub Holdings Inc. (NYSE:STUB)
Sector/Industry: Communication Services (Internet Content & Information)
Share Price: $12.56
Potential Upside: 89.5%
Number of Hedge Fund Holders: 29
StubHub Holdings Incorporated (NYSE:STUB) is one of the best communication services stocks according to Hedge Funds.
On December 19, Wedbush analyst Scott Devitt reiterated his bullish stance on StubHub Holdings Inc. (NYSE:STUB). Devitt assigned a Buy rating to the stock but lowered his price target from $22 to $18. Despite the revision, the stock still gives an upside of over 43%.
Devitt noted the robust 2025 returns across the broader consumer internet universe. The year saw stocks rally, with the analyst’s 24 covered companies averaging 23% returns, outperforming the NASDAQ’s 19% return. However, he anticipates 2026 will be different in that regard, as investors will factor several key trends into their decision-making. Some of the relevant ones for the consumer internet space include AI monetization, accelerating the adoption of agentic AI, and autonomous vehicle (AV) disruption.
Consensus views on StubHub Holdings Inc. (NYSE:STUB) indicate an upside of above 89% from the prevailing level. The stock has a 1-year median price target of $23.80 as of December 7 closing. It has received coverage from 13 analysts, including 8 Buy and 5 Hold ratings.
StubHub Holdings Inc. (NYSE:STUB) is a ticket exchange and resale marketplace. They operate the StubHub website and an online application, Viagogo. Users are able to buy and sell tickets for sports, concerts, theater, and other live events. The company leverages data intelligence and AI capabilities to offer an efficient user experience.
18. Warner Music Group (NASDAQ:WMG)
Sector/Industry: Communication Services (Entertainment)
Share Price: $29.79
Potential Upside: 23.1%
Number of Hedge Fund Holders: 32
Warner Music Group (NASDAQ:WMG) is one of the best communication services stocks according to Hedge Funds.
On December 18, Morgan Stanley analyst Cameron Mansson-Perrone assigned a Buy rating to the stock, with $37 price target. The analyst labeled the stock as a “2025 laggard”, but remains optimistic based on expectations of accelerated payments on streaming services during the first quarter of 2026. His estimates imply over 24% upside from the current level.
Peter Supino of Wolfe Research also reaffirmed his outperform rating on Warner Music Group (NASDAQ:WMG). Supino gave a Buy call on December 15; however, he cut down his price target from $40 to $36. Following this revision, there is now around 21% upside potential for investors.
Supino’s bullish views for Warner Music Group (NASDAQ:WMG) are based on Wolfe Research’s 2026 projections for media & entertainment. Based on the outlook, the firm remains overweight on live entertainment and music businesses.
Warner Music Group (NASDAQ: WMG) is a music entertainment company and record label conglomerate. It is the third-largest music recording company in the world, and operates through music publishing and recorded music. They also engage in the promotion, distribution, and licensing of music, as well as the search for new talent.
17. Cinemark Holdings (NYSE:CNK)
Sector/Industry: Communication Services (Entertainment)
Share Price: $22.55
Potential Upside: 49.3%
Number of Hedge Fund Holders: 38
Cinemark Holdings (NYSE:CNK) is one of the best communication services stocks according to Hedge Funds.
Mike Hickey from Benchmark & Co reiterated his optimism on Cinemark Holdings (NYSE:CNK), rating the stock as Buy on December 10. Hickey has set a $35 price target for the stock, implying over 55% upside for investors.
Hickey spoke of the ongoing sale process involving Warner Bros. and Discovery, which is benefiting theater exhibition businesses in general. He pointed out the aggressive intentions of bidders involved in the process, who plan to generate a larger volume of films, maintain a stable slate output, and deliver ongoing support for traditional theater windows.
According to Hickey, such indications are creating optimism around the broader industry, and in particular for Cinemark Holdings (NYSE:CNK). Backing that up is the fact that the company management is currently executing a share repurchase program despite a comparatively high Price-to-Book ratio of 7.48x. This signals a strong management view of the business for the foreseeable future, and could spark investor interest.
As of December 7 closing, consensus views remain strong for Cinemark Holdings (NYSE:CNK). With an estimated 1-year median price target of $33.67, the stock offers a highly impressive upside of over 49%. It has received Buy ratings from 5 of the 6 analysts covering it, with just 1 Hold rating.
Cinemark Holdings (NYSE:CNK) operates one of the largest motion picture exhibition chains in the world. They run various brands such as Cinemark, Cinemark XD, Tinseltown, and Rave. They are renowned for offering premium entertainment experiences, with a highly diverse circuit in the U.S., Central, and Latin America.
16. Genius Sports Limited (NYSE:GENI)
Sector/Industry: Communication Services (Internet Content & Information)
Share Price: $10.36
Potential Upside: 54.4%
Number of Hedge Fund Holders: 40
Genius Sports Limited (NYSE:GENI) is one of the best communication services stocks according to Hedge Funds.
Benchmark & Co analyst Mike Hickey reaffirmed his bullish stance on Genius Sports Limited (NYSE:GENI), assigning a Buy rating to the stock on December 30. The analyst has estimated a price target of $16, which implies an upside potential of over 54%.
Hickey attributed his outperform rating on Genius Sports Limited (NYSE:GENI) to various structural factors. One of them is the company’s rising fixed cost basis, which leads to its increasing operating leverage. Besides that, the company has a unique edge in media monetization. Instead of banking on traditional routes of content licensing, they are able to monetize content in real-time through advertising and highly interactive data-driven engagement methods.
Hickey also acknowledged management’s multi-year guidance during the Investor Day presentation, where they forecasted $1.2 billion in revenues by 2028. The company is also expected to achieve approximately 30% adjusted EBITDA margins and an approximately 60% free cash flow conversion ratio.
On December 4, Citizens had also revised its target price for Genius Sports Limited (NYSE:GENI) from $15 to $17. Rating the stock as Buy, the firm projected a strong cash flow conversion ratio of 9% in the upcoming year-end results, leading to $12 million in free cash flows.
Genius Sports Limited (NYSE:GENI) is a sports data, analytics, and technology company that delivers data management and technology-enabled solutions for fans, sports leagues, and media companies. They also engage with bookmakers in the betting market, where they leverage their data management capabilities to optimize betting markets.
15. Omnicom Group (NYSE:OMC)
Sector/Industry: Communication Services (Advertising Agencies)
Share Price: $77.58
Potential Upside: 17.9%
Number of Hedge Fund Holders: 42
Omnicom Group (NYSE:OMC) is one of the best communication services stocks according to Hedge Funds.
On December 16, Thomas Yeh of Morgan Stanley initiated coverage of Omnicom Group (NYSE:OMC) with an Equal Weight rating. Yeh cited the company’s post-deal integration risks related to their merger with IPG as the basis for his cautious rating. He has forecasted a target price of $88, which offers an upside of 13.5% from the current level.
Citi analyst Jason Bazinet reiterated his optimism on Omnicom Group (NYSE:OMC) by assigning a Buy rating on December 9. He also set a $103 price target for the stock, which implies that it currently offers almost 33% upside.
Bazinet holds a favorable outlook on Omnicom Group (NYSE:OMC), and his optimism stems from the broader industry’s evolving dynamics. The analyst pointed out that changing demands within the digital marketing realm, led by agency clients. This bodes well for Omnicom Group (NYSE:OMC), which is expected to deliver strong returns in the coming year.
Omnicom Group (NYSE:OMC) is a media, communications, sales, and marketing company that operates through its various subsidiaries. They deliver services such as advertising, branding, precision marketing, content marketing, CSR consulting, public relations support, and more. They integrate their technical expertise with data management and analytics to deliver superior value to customers.
14. InterActiveCorp (NASDAQ:IAC)
Sector/Industry: Communication Services (Internet Content & Information)
Share Price: $38.58
Potential Upside: 24.7%
Number of Hedge Fund Holders: 47
InterActiveCorp (NASDAQ:IAC) is one of the best communication services stocks according to Hedge Funds.
On December 15, Jason Helfstein of Oppenheimer assigned a Hold rating to InterActiveCorp (NASDAQ:IAC) due to valuation concerns. Looking at the company’s sum-of-parts discount, Helfstein sees limited growth potential in the stock. However, his target price of $45 still offers nearly 17% upside.
The stock was subject to an upward price target revision by Jefferies analyst Brent Thill on December 11. The analyst reaffirmed his bullish stance by assigning a Buy rating and also raised his price target from $41 to $45.
Jefferies shared its “2026 Internet Playbook” note with investors, reflecting on some of the challenges ahead for Internet stocks. One of the key areas of emphasis was incremental investments by companies that could pose a risk to business margins. Another critical factor discussed relates to AI disintermediation within the industry, which is a notable headwind. Given these potential issues, the firm recommended that investors remain selective with Internet stocks.
Despite the caution, Thill’s Buy rating on InterActiveCorp (NASDAQ:IAC), along with an upward revision in target price, indicates his confidence in business fundamentals.
InterActiveCorp (NASDAQ:IAC) is a media and internet holding company that produces digital content in various forms, including images, videos, and illustrations. They also publish lifestyle and women-oriented magazines under various brand names. Some of the names include FOOD & WINE, Verywell, BYRDEI, Better Homes & Gardens, and Investopedia.
13. Match Group (NASDAQ:MTCH)
Sector/Industry: Communication Services (Internet Content & Information)
Share Price: $32.59
Potential Upside: 14.1%
Number of Hedge Fund Holders: 50
Match Group (NASDAQ:MTCH) is one of the best communication services stocks according to Hedge Funds.
On January 5, Shweta Khajuria from Wolfe Research reaffirmed her stance on Match Group (NASDAQ:MTCH), giving a Buy call. Khajuria revised her price target from $42 to $43, implying about 32% upside.
She highlighted the outperformance of Internet stocks over the last 3 years, and expects the trend to continue despite some fears of stretched multiples. She predicts AI advancements and relevant product development spending to remain some of the major drivers, along with strong macroeconomic forecasts.
On December 10, RBC Capital analyst Brad Erickson also reiterated his optimistic forecast for Match Group (NASDAQ:MTCH). He assigned a Buy rating with a target price set at $37, leading to an upside of around 13.5%.
Erikson’s rating came after his discussions with senior leadership, which revolved around the turnaround strategy for Tinder. Management emphasized that their focus will be on brand restoration, product improvements, and some level of demonetization to achieve a sustainable recovery.
Match Group (NASDAQ:MTCH) is an internet and technology company that primarily operates several online dating platforms. It offers digital technologies to help people build personal connections, and operates through its four distinct segments. Some of the renowned brands include Tinder, OurTime, Plenty of Fish, Hinge, Match, Meetic, OkCupid, and Pairs.
12. Live Nation Entertainment (NYSE:LYV)
Sector/Industry: Communication Services (Entertainment)
Share Price: $143.96
Potential Upside: 22.2%
Number of Hedge Fund Holders: 61
Live Nation Entertainment (NYSE:LYV) is one of the best communication services stocks according to Hedge Funds.
Kutgun Maral from Evercore ISI reaffirmed his outperform rating on Live Nation Entertainment (NYSE:LYV). The analyst gave a Buy call on December 23 and also raised his target price from $168 to $188. His revised estimates imply nearly 31% upside.
Maral’s rating, despite the stock’s high P/E multiple of 102.66, is supported by strong anticipated growth in consolidated adjusted operating income (AOI). Projected AOI annual growth figures from 2025 to 2028 are 10%, 13%, 13.8% and 14.2%. Maral also expects accelerated demand for live events that offer enhanced revenue visibility for the company’s venue development platform, Venue Nation. These factors make Live Nation Entertainment (NYSE: LYV) a top choice in the Media industry.
On December 8, Bernstein SocGen Group analyst Ian Moore also reiterated his Buy rating for the stock, with a $185 target price. At the current level, this leads to an upside of more than 28%. Moore also maintains a view of double-digit AOI growth in 2026 despite recent concerns regarding the Ticketmaster division.
Live Nation Entertainment (NYSE:LYV) is a multinational entertainment company that was formed after a merger between Live Nation and Ticketmaster. It currently operates through three distinct segments, i.e., Concerts, Ticketing, and Sponsorship & Advertising. Through these segments, it promotes live global events, festivals, ticket sales, and venues, and also engages in advertisements, sponsorships, and promotions.
11. Liberty Media Corporation (NASDAQ:FWONK)
Sector/Industry: Communication Services (Entertainment)
Share Price: $92.72
Potential Upside: 26.2%
Number of Hedge Fund Holders: 62
Liberty Media Corporation (NASDAQ:FWONK) is one of the best communication services stocks according to Hedge Funds.
Peter Supino from Wolfe Research reiterated his bullish views on Liberty Media Corporation (NASDAQ:FWONK), assigning a Buy rating to the stock on December 15. Supino also revised his target price estimate for the stock from $121 to $123, implying 33% upside.
This upward revision came after Wolfe Research shared its 2026 positive outlook for the media & entertainment vertical. With favorable prospects for live events business models, Liberty Media Corporation (NASDAQ:FWONK) is expected to thrive.
On December 2, JPMorgan analyst David Karnovsky raised his price target on the stock from $120 to $122 and assigned an overweight rating. As per his estimates, the stock offered almost 32% upside from the prevailing level at that time. Karnovsky reflected on the company’s investor day presentation, which indicated strong growth prospects beyond 2026. He also saw fundamental strength within the F1 ecosystem, which backs his bullish views.
Liberty Media Corporation (NASDAQ:FWONK) operates in the motorsports business, through its subsidiaries, across the U.S. and the United Kingdom. They have the commercial rights for the FIA Formula One World Championship and are also responsible for its promotion. Other services they offer include ticketing, hospitality packages, licensing, and television production.
10. Pinterest Inc. (NYSE:PINS)
Sector/Industry: Communication Services (Internet Content & Information)
Share Price: $27.49
Potential Upside: 38.6%
Number of Hedge Fund Holders: 66
Pinterest Inc. (NYSE:PINS) is one of the best communication services stocks according to Hedge Funds.
Shweta Khajuria from Wolfe Research reiterated her bullish views on Pinterest Inc. (NYSE:PINS), assigning a Buy rating on January 5. Despite a downward revision in the target price from $36 to $33, Khajuria still expects a 20% upside potential.
The analyst expects a continued rally in Internet stocks following 3 years of outperformance. She expects a favorable sentiment driven by macroeconomic growth, AI-linked developments, and larger spending on products.
BMO Capital analyst Brian Pitz also reaffirmed his outperform rating on Pinterest Inc. (NYSE:PINS) on December 16. Pitz gave a Buy call and estimated a $35.00 price target, which leads to an upside of over 27%.
Pitz shed light on the company’s recent strategic acquisition of tvScientific, which allows advertisers to connect with high-intent customers through connected TV (CTV) inventory. Moreover, this move will make advertising more effective by sending high-intent signals to advertisers through the company’s platform. Pitz also acknowledged a healthy balance sheet for Pinterest Inc. (NYSE:PINS), carrying more cash than debt.
Pinterest Inc. (NYSE:PINS) is an online visual search and discovery platform that operates globally. It enables creativity by allowing users to share and search for a wide range of ideas covering different topics. This could include fitness, style, recipes, art, and more. It also allows users to engage with advertisers, which is a key revenue source for the business.
9. Zillow Group (NASDAQ:ZG)
Sector/Industry: Communication Services (Internet Content & Information)
Share Price: $67.43
Potential Upside: 28.7%
Number of Hedge Fund Holders: 74
Zillow Group (NASDAQ:ZG) is one of the best communication services stocks according to Hedge Funds.
RBC Capital analyst Brad Erickson reiterated his bullish call on Zillow Group (NASDAQ:ZG). The analyst assigned a Buy rating on December 15, with a $95.00 price target. As per Erickson’s forecasts, investors should expect an upside of almost 41%.
Erickson’s outperform rating came after recent reports about Google showing search results for third-party real estate listings from ComeHome. This indicates Google is entering into the real estate advertising space, which poses a risk to Zillow Group (NASDAQ:ZG). However, Erickson sees such listings as a violation of several Multiple Listing Service (MLS) distribution rules, and predicts that it will shut down in the near future. Hence, he anticipates a very limited fundamental impact on Zillow Group (NASDAQ:ZG).
On December 15, Mike Ng from Goldman Sachs also highlighted the same issue and rated the stock as Hold. Ng also expects the near-term effect on Zillow Group (NASDAQ:ZG) to be limited, as this product is only available on mobile browsers across a very few markets. His price target of $78 for the stock still offers almost 16% upside.
Zillow Group (NASDAQ:ZG) is a technology-enabled platform for the real estate market, operating through websites and mobile applications. It offers marketplaces for rentals, construction, agents, and advertising of properties. Moreover, it also offers SaaS solutions for real estate transaction management. The company ensures a seamless experience for users who benefit from end-to-end real estate transaction solutions.
8. T-Mobile US Inc. (NASDAQ:TMUS)
Sector/Industry: Communication Services (Telecom Services)
Share Price: $197.29
Potential Upside: 34.5%
Number of Hedge Fund Holders: 81
T-Mobile US Inc. (NASDAQ:TMUS) is one of the best communication services stocks according to Hedge Funds.
On January 7, Maher Yaghi from Scotiabank reaffirmed his Buy rating for T-Mobile US (NASDAQ:TMUS). Yaghi has revised his target price from $278 to $270.5, which still yields over 37% upside for investors.
Yaghi’s rating is part of Scotiabank’s recent price target revisions for the broader Telecommunication Services universe. These updates are based on the firm’s estimates for the upcoming Q4 results. The firm noted decent revenue and EBITDA growth across the industry despite an increased level of promotional activity during the holiday season.
On December 15, Wolfe Research analyst Peter Supino also reiterated his bullish call on T-Mobile US (NASDAQ:TMUS). Supino assigned a Buy rating to the stock but also lowered his price target from $290 to $253. Even after this downward revision, Supino sees more than 26% upside potential for investors.
T-Mobile US (NASDAQ:TMUS) is a wireless carrier offering voice, data, and communication services through prepaid & postpaid mobile plans and business solutions. It is a subsidiary of the German company Deutsche Telekom, and has an extensive focus on 5G network.
7. AT&T Inc. (NYSE:T)
Sector/Industry: Communication Services (Telecom Services)
Share Price: $23.97
Potential Upside: 17.9%
Number of Hedge Fund Holders: 84
AT&T Inc. (NYSE:T) is one of the best communication services stocks according to Hedge Funds.
On January 5, KeyBanc Capital Markets described AT&T Inc. (NYSE:T) as one of its top Communications and IT Infrastructure picks for 2026. The firm assigned a Buy rating with a target price of $30, suggesting an upside potential of 25%.
KeyBank forecasts an EBITDA growth of 4% in the coming year, that will be followed by 4-5% range up to 2030. This overweight rating is also attributed to the company’s strategic focus towards fiber development that will further bolster its positioning within the Wireless/Cable sector.
Mike Ng from Goldman Sachs also reaffirmed his outlook on AT&T Inc. (NYSE:T). On December 19, Ng assigned a Buy rating to the stock with a downward revision in price target from $33 to $29. The stock now offers 21% upside, with approximately 8% cumulative growth in free cash flow through 2029.
Ng also emphasized the company’s increasing fiber footprint and believes that such ambitions will benefit the business through AI-driven traffic.
AT&T Inc. (NYSE:T) is a telecom and technology services provider that has worldwide operations. It provides 4G/5G-enabled wireless, fiber ethernet, broadband, managed professional services, and business solutions. It has two distinct segments, i.e., Communications and Latin America.
6. Roblox Corporation (NYSE:RBLX)
Sector/Industry: Communication Services (Electronic Gaming & Multimedia)
Share Price: $76.42
Potential Upside: 75.21%
Number of Hedge Fund Holders: 90
Roblox Corporation (NYSE:RBLX) is one of the best communication services stocks according to Hedge Funds.
Ken Gawrelski of Wells Fargo reaffirmed his bullish stance on Roblox Corporation (NYSE:RBLX). Gawrelski assigned a Buy rating on January 8, with a downward revision of the target price from $141 to $107. Despite that, the stock currently offers around 40% upside to investors.
The analyst has predicted 26% growth in the coming year’s booking, ranging between $7.9 billion $8 billion in total. These forecasts are now more aligned with consensus estimates, and the first quarter will most likely generate the highest growth.
On December 10, B. Riley Securities analyst Drew Crum also initiated his coverage on Roblox Corporation (NYSE:RBLX). The analyst gave a Buy call with an estimated price target of $125, resulting in an impressive 64% upside potential.
Crum cited his bullish views on the company’s long-run fundamental prospects, which are backed by its advanced entertainment platform. Crum views Roblox Corporation (NYSE:RBLX) as leveraging the social and content effects of its platform that are mutually reinforcing.
Roblox Corporation (NYSE:RBLX) is a virtual communication and connection platform that enables a highly immersive digital experience for users from around the world. Its offerings include Roblox Client, Roblox Studio, and Roblox Cloud. These tools allow users and developers to connect, work, play, and socialize in a 3D infrastructure.
5. Walt Disney Company (NYSE:DIS)
Sector/Industry: Communication Services (Entertainment)
Share Price: $112.91
Potential Upside: 22.0%
Number of Hedge Fund Holders: 107
Walt Disney Company (NYSE:DIS) is one of the best communication services stocks according to Hedge Funds.
On January 5, Bank of America Securities analyst Jessica Reif Ehrlich reaffirmed her Buy rating for Walt Disney Company (NYSE:DIS). She estimated a target price of $140, which yields nearly 24% upside from the current level.
Ehrlich predicts mixed results for the first quarter across various business segments. She predicts solid box office numbers for “Zootopia 2”, but at the same time, meager outcomes are expected from live-action releases. At the back end of the first quarter, the successful launch of Disney Adventure is also scheduled, which will be the company’s largest cruise ship so far. Despite attendance-related challenges, Ehrlich anticipates single-digit growth in revenues from the Experiences segment.
Wells Fargo analyst Steven Cahall also reiterated his outperform rating on Walt Disney Company (NYSE:DIS). Cahall gave a Buy call on the stock on January 5, with a price target of $152, leading to around 35% upside potential.
Wells Fargo also included Walt Disney Company (NYSE:DIS) on its Q1 2026 Tactical Ideas List. This is based on promising first-quarter demand expected during peak days at Parks. The analyst also reflected on stronger EPS figures for 2026, supported by the box office.
Walt Disney Company (NYSE:DIS) is a mass media conglomerate that produces entertainment and informational content. The company is also responsible for the distribution of its content globally. They operate through various segments that include Media Networks, Studio Entertainment, Direct-to-Consumer, and Parks, Experiences & Products. Moreover, the company also offers consumer products such as apparel, merchandise, and toys.
4. AppLovin Corporation (NASDAQ:APP)
Sector/Industry: Communication Services (Advertising Agencies)
Share Price: $632.92
Potential Upside: 20.5%
Number of Hedge Fund Holders: 110
AppLovin Corporation (NASDAQ:APP) is one of the best communication services stocks according to Hedge Funds.
BTIG analyst Clark Lampen reiterated his bullish stance on AppLovin Corporation (NASDAQ:APP), assigning a Buy rating on December 17. Lampen also raised his price target from $705 to $771, which now results in a potential upside of 22%. Lampen has a positive outlook for the gaming and gambling end markets in 2026, based on expectations of strong user acquisition trends.
On December 11, Mike Hickey of Benchmark & Co. also reaffirmed his bullish view on AppLovin Corporation (NASDAQ:APP). Hickey assigned a Buy rating and also revised his target price for the stock from $700 to $775. The stock is still viewed as “Best Idea” that offers a mix of profitability, sustainable margins, growth, and expansion of the total addressable market.
Hickey sees fundamental strength in the business that comes from the rise in e-commerce, more impactful prospecting campaigns, and the influence of Gen AI creative. He also noted management’s views related to optimal spending on AI infrastructure, international expansion plans, and advertiser density.
AppLovin Corporation (NASDAQ:APP) connects advertisers with publishers through an AI-enabled software platform. The software incorporates end-to-end solutions for businesses to monetize their content globally. Recently, the company tilted towards the adtech space in pursuit of lucrative margins, after divesting its mobile gaming segment.
3. Spotify Technology (NYSE:SPOT)
Sector/Industry: Communication Services (Internet Content & Information)
Share Price: $569.62
Potential Upside: 32.3%
Number of Hedge Fund Holders: 116
Spotify Technology (NYSE:SPOT) is one of the best communication services stocks according to Hedge Funds.
On December 19, Bank of America Securities analyst Jessica Reif Ehrlich reaffirmed her outlook on Spotify Technology (NYSE:SPOT). Ehrlich rated the stock as Buy with a target price of $900. As per the analyst’s estimates, the stock offered 58% upside potential from the prevailing level.
Ehrlich has predicted “continued momentum across KPIs” for the fourth quarter, following almost 12% topline growth in the previous 12 months. She mentioned successful price hikes being implemented in several markets without significant user churn. This shifts investor focus towards potential price hikes within the U.S. market.
Deutsche Bank also reiterated its bullish view on Spotify Technology (NYSE:SPOT), assigning a Buy rating on December 1. The firm set a price target at $775, which results in an upside of 36%. The firm also predicts strong profitability growth that could come from raising subscription prices. They quantified a $1 increase in monthly subscription fees to have a 2% incremental impact on the 2026 topline, along with a 5% jump in operating earnings.
Spotify Technology (NYSE:SPOT) provides a subscription-based audio streaming service to a worldwide audience. Through its two segments, i.e., Premium and Ad-Supported, the company offers its users access to its catalog of music and podcasts. The company leverages AI capabilities and content licensing to deliver a highly personalized, real-time experience to its users.
2. Netflix Inc. (NASDAQ:NFLX)
Sector/Industry: Communication Services (Entertainment)
Share Price: $90.73
Potential Upside: 44.1%
Number of Hedge Fund Holders: 154
Netflix Inc. (NASDAQ:NFLX) is one of the best communication services stocks according to Hedge Funds.
On December 17, James Heaney of Jefferies reiterated his optimism on Netflix, Inc. (NASDAQ:NFLX). Heaney assigned a Buy rating to the stock with a target price of $134. As per the analyst’s forecast, investors should expect an upside of almost 48% from the current level.
Heaney downplayed a potential bidding war scenario related to the company’s potential acquisition of Warner Bros. Discovery (WBD), given a strong likelihood of the deal being finalized. He believes that the market has yet to price in the full synergies that would result from this transaction. Besides that, Heaney is also confident about the company’s organic growth prospects.
Peter Supino of Wolfe Research also reaffirmed his Buy rating on Netflix Inc. (NASDAQ:NFLX) on December 15. Supino lowered his price target from $139 to $121, which still leads to a 33% upside potential. The revised rating is part of Wolfe Research’s 2026 outlook adjustments for media & entertainment and telecom & cable segments.
Netflix Inc. (NASDAQ:NFLX) is a subscription-based entertainment service provider that streams television shows, films, documentaries, and more. It uses advanced algorithms to offer device compatibility and personalization for its global users. Subscribers can access an extensive library of content through internet-connected devices such as set-top boxes, laptops, and mobile phones.
1. Meta Platforms (NASDAQ:META)
Sector/Industry: Communication Services (Internet Content & Information)
Share Price: $648.69
Potential Upside: 27.8%
Number of Hedge Fund Holders: 273
Meta Platforms (NASDAQ:META) is one of the best communication services stocks according to Hedge Funds.
Scott Devitt from Wedbush reiterated his bullish stance on Meta Platforms Inc. (NASDAQ:META). He assigned a Buy rating on December 19, with a downward revision of the price target from $920 to $880. This still leaves 36% upside potential in the stock.
Devitt highlighted some encouraging fundamental factors for Meta Platforms Inc. (NASDAQ:META) to back his stance. These include monetizing new channels, adapting to Advantage+, expected cost controls, and digital ad trends. Amalgamation of these factors has made the stock Wedbush’s top pick within the Advertising space for 2026.
On December 15, Citizens also reaffirmed its outperform rating on Meta Platforms Inc. (NASDAQ:META). They gave a Buy call with a target price of $900, yielding an impressive 39% upside. The firm based its rating on planned updates for 2026 that would generate higher engagement, app usage time, and impressions. These factors are critical for advertisements, which are the primary source of revenue.
Meta Platforms (NASDAQ:META) operates various communication and social media platforms that connect users all around the globe. Its business operates through two segments. First is called Family of Apps (FoA) that runs Facebook, WhatsApp, Threads, Instagram, and Messenger. The second one is the futuristic Reality Labs (RL) that includes metaverse and VR/AR hardware.
While we acknowledge the potential of META as an investment, 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.
READ NEXT: 15 Most Promising Mid-Cap Healthcare Stocks Under $50 and 11 Most Promising Small-Cap Industrial Stocks Under $50.
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 address below.
