In this article, we will list the 5 Best New Stocks to Invest In According to Hedge Funds. Please visit 10 Best New Stocks to Invest In According to Hedge Funds. to see the extended list and the methodology behind it.
5. Credo Technology Group Holding Ltd (NASDAQ:CRDO)
Number of Hedge Fund Holders: 69
Credo Technology Group Holding Ltd (NASDAQ:CRDO) is one of the best new stocks to invest in according to hedge funds. On April 13, Credo Technology Group entered into a definitive agreement to acquire DustPhotonics for ~$750 million in cash and stock, with additional performance-based milestones. This strategic move brings industry-leading Silicon Photonics Photonic Integrated Circuit/SiPho PIC technology in-house, positioning Credo as a vertically integrated provider.
The acquisition allows the company to address the full spectrum of AI infrastructure, spanning from copper to optical interconnects for 800G, 1.6T, and future 3.2T applications. The integration of DustPhotonics’ technology is expected to accelerate Credo’s optical roadmap and reduce reliance on external suppliers. By combining SiPho PICs with Credo’s existing SerDes and Digital Signal Processing/DSP expertise, the company aims to improve AI cluster reliability and energy efficiency.
These high-speed optical components are essential for hyperscale data centers, with Credo Technology Group Holding Ltd (NASDAQ:CRDO) projecting its optical business will generate over $500 million in revenue by FY27. The transaction is expected to close in the second quarter of calendar 2026, subject to regulatory approvals and customary closing conditions.
Credo Technology Group Holding Ltd (NASDAQ:CRDO) develops high-speed connectivity products and solutions for the data infra market (specifically optical and electrical Ethernet and PCIe applications), including SerDes chiplets, integrated circuits, and electrical cables.
4. Reddit Inc. (NYSE:RDDT)
Number of Hedge Fund Holders: 82
Reddit Inc. (NYSE:RDDT) is one of the best new stocks to invest in according to hedge funds. On March 24, Reddit announced a suite of new shopping tools to enhance its Dynamic Product Ads/DPA experience, aiming to capitalize on a 40% year-over-year increase in high-intent shopping conversations. The platform highlighted its role in driving buyer confidence, noting that 84% of researchers feel more secure in their purchases after using the site.
These updates follow data showing that businesses scaling their investment on the platform saw a 34% improvement in cost-per-purchase and significantly higher ROAS. The launch introduces Collection Ads, which allow retailers to pair a lifestyle hero image with shoppable product tiles in a single carousel. Early adopters of this format have reported an 8% lift in ROAS by bridging the gap between product discovery and purchase.
Additionally, Reddit is testing unique Community and Deal overlays (such as “Redditors’ Top Pick”) to surface social proof and automatic discount callouts directly within the ad experience. To streamline entry for new advertisers, Reddit Inc. (NYSE:RDDT) also unveiled a Shopify integration currently in alpha. This partnership simplifies catalog and pixel setup, allowing businesses to automatically target the right users with relevant products.
Reddit Inc. (NYSE:RDDT) operates a digital community across the US and globally. Its platform allows users to research new hobbies, engage in conversations, create new communities & experiences, explore passions, exchange goods & services, find belongings, and share laughs.
3. Robinhood Markets Inc. (NASDAQ:HOOD)
Number of Hedge Fund Holders: 83
Robinhood Markets Inc. (NASDAQ:HOOD) is one of the best new stocks to invest in according to hedge funds. On April 22, Robinhood Ventures Fund I/RVI announced a $75 million investment in OpenAI, marking one of the fund’s largest acquisitions to date. The transaction, which closed on April 17, involved the purchase of OpenAI common stock. This move aligns with Robinhood’s broader mission to provide retail investors with access to private, transformative companies that are typically reserved for institutional or accredited investors.
The fund, which began trading on the NYSE in March, is a closed-end vehicle designed to democratize access to the private sector. Sarah Pinto, President of RVI, noted that the investment underscores the fund’s commitment to giving everyday investors exposure to frontier AI. OpenAI joins a concentrated portfolio of other high-profile private firms, including Stripe, SpaceX, and Databricks, within the RVI holdings.
This investment comes at a time when the number of publicly traded companies in the US has significantly declined, while private firms continue to grow in value and remain private for longer periods. RVI is structured to eliminate traditional barriers to entry, such as investment minimums and accreditation requirements. By adding OpenAI, the fund aims to help retail investors capture the potential growth of the AI-native economy through a transparent, exchange-listed platform.
Robinhood Markets Inc. (NASDAQ:HOOD) operates a financial services platform. The company’s platform enables users to invest in exchange-traded funds/ETFs, options, cryptocurrencies, American Depository Receipts/ADRs, stocks, and gold. It also operates and owns a digital currency marketplace.
2. Talen Energy Corporation (NASDAQ:TLN)
Number of Hedge Fund Holders: 88
Talen Energy Corporation (NASDAQ:TLN) is one of the best new stocks to invest in according to hedge funds. On April 17, Talen Energy’s subsidiary, Talen Energy Supply/TES, priced a private placement of senior notes totaling $4 billion in aggregate principal. The offering consists of $1.5 billion in 6.125% senior notes due in 2031 and $2.5 billion in 6.375% senior notes due in 2033. The sale is expected to close on April 29, and the notes are being issued specifically to qualified institutional buyers and accredited investors.
Talen Energy Corporation (NASDAQ:TLN) plans to use the net proceeds to fund a major acquisition of 2,451 megawatts of power generation capacity. This includes the Lawrenceburg Power Plant, the Waterford Energy Center, and the Darby Generation Station. Additionally, a portion of the funds will be directed toward the full redemption of the company’s existing 8.625% senior secured notes due in 2030, effectively refinancing higher-interest debt with the new lower-coupon issuances.
The agreement includes a special mandatory redemption clause if the acquisition is not finalized by January 15, 2027 (subject to extension). If the deal fails to close by this “Outside Date,” a total of $2.8 billion of the aggregate principal across both sets of notes will be redeemed at 100% of the issue price plus accrued interest. This structure provides a financial safeguard for investors while the company works toward completing the merger agreement established earlier this year.
Talen Energy Corporation (NASDAQ:TLN) operates power infrastructure. The company produces and sells electricity, capacity, and ancillary services into wholesale power markets via its subsidiaries.
1. GE Vernova Inc. (NYSE:GEV)
Number of Hedge Fund Holders: 115
GE Vernova Inc. (NYSE:GEV) is one of the best new stocks to invest in according to hedge funds. On April 23, GE Vernova secured agreements to supply 71.5 MW of onshore wind turbines to BBWind and Greenvolt Power for multiple projects in Germany. These deals, originally booked in Q4 2025, highlight GE Vernova’s ongoing commitment to supporting the German energy transition.
The partnership reinforces a long-term relationship with community-wind developer BBWind and establishes a new collaboration with Greenvolt Power as GE Vernova expands its presence as a preferred technology partner in the region. The projects will use GE Vernova’s workhorse turbines, which are manufactured and engineered at the company’s 70,000-square-meter facility in Salzbergen, Germany.
This local manufacturing hub is central to the company’s European operations, producing machine heads, drive trains, and hubs. By using local production, GE Vernova Inc. (NYSE:GEV) is positioned to help Germany meet its national target of generating 80% of its electricity from renewable sources by 2030, following a year in which the country installed 4.6 GW of onshore wind capacity.
GE Vernova Inc. (NYSE:GEV) is a global energy company focused on Power, Wind, and Electrification. It also operates a set of accelerator businesses that support these segments. The company designs, manufactures, delivers, and services technologies aimed at building a more sustainable electric power system, with a focus on electrification and decarbonization.
While we acknowledge the potential of GEV 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 GEV and that has 100x upside potential, check out our report about the cheapest AI stock.
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