In this article, we are going to look at the 5 Best Performing Stocks of Q1 2026 to Watch for Q2. For a longer list and more details on how we picked these stocks, you can go to 10 Best Performing Stocks of Q1 2026 to Watch for Q2.
5. Enliven Therapeutics, Inc. (NASDAQ:ELVN)
Q1 2026 Performance: 152.25%
Enliven Therapeutics, Inc. (NASDAQ:ELVN) is one of the best-performing stocks of Q1 2026 to watch for Q2. On March 26, H.C. Wainwright increased its price target on Enliven Therapeutics, Inc. (NASDAQ:ELVN) from $48 to $56 and kept its Buy rating on the stock.
This increase in valuation came after Merck & Co., Inc. (NYSE:MRK) entered into a definitive agreement under which it will acquire Terns Pharmaceuticals, Inc. (NASDAQ:TERN), Enliven Therapeutics, Inc.’s (NASDAQ:ELVN) competitor, through a subsidiary for approximately $6.7 billion.
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Earlier, on March 24, Mizuho also lifted its price target on Enliven Therapeutics, Inc. (NASDAQ:ELVN) from $41 to $45 and maintained its Outperform rating on the stock.
The research firm pointed to recent Phase 1b data for ELVN-001 as the key factor for this increase in the price target. Mizuho sees Enliven Therapeutics, Inc. (NASDAQ:ELVN) as an under-rated asset in the chronic myeloid leukemia market. The firm added that it expects more data from ELVN-001’s Phase 1a/b trial in mid-year.
Enliven Therapeutics, Inc. (NASDAQ:ELVN) is a clinical-stage biopharmaceutical company focused on the discovery and development of small molecule kinase inhibitors for cancer treatment.
4. Fastly, Inc. (NASDAQ:FSLY)
Q1 2026 Performance: 185.18%
Fastly, Inc. (NASDAQ:FSLY) is one of the best-performing stocks of Q1 2026 to watch for Q2. On March 2, Fastly, Inc. (NASDAQ:FSLY) presented at the 47th Annual Raymond James Institutional Investor Conference, where it shared details about a strategic shift that has helped the company through significant financial and operational improvements.
Supported by a revamped go-to-market strategy and a focus on high-performance edge solutions, the company achieved record gross margins and steady profitability in 2025. Fastly, Inc. (NASDAQ:FSLY) reported gross margins of 64% and said it was profitable throughout 2025. It also generated positive free cash flow in all of 2025. In the fourth quarter of 2025, revenue growth re-accelerated to 23%, supported by its security, compute, and observability businesses.
Looking ahead, the company aims to raise its remaining performance obligation (RPO) commitments to about 70% to 80% of revenue. Fastly, Inc. (NASDAQ:FSLY) also sees short-term monetization opportunities from AI traffic and is looking at security mechanisms to manage agentic traffic. Managing AI traffic is becoming a key focus, and the company is developing tools like Bot Mitigation.
Additionally, Fastly, Inc. (NASDAQ:FSLY) has more than $350 million in cash on its balance sheet and is open to strategic mergers and acquisitions.
Fastly, Inc. (NASDAQ:FSLY) operates a programmable, high-performance edge cloud platform that delivers faster, safer, and more scalable sites and apps to customers.
3. AXT, Inc. (NASDAQ:AXTI)
Q1 2026 Performance: 239.98%
AXT, Inc. (NASDAQ:AXTI) is one of the best-performing stocks of Q1 2026 to watch for Q2. On March 18, B. Riley said it is “incrementally cautious” on AXT, Inc. (NASDAQ:AXTI) after seeing negative data points in the indium phosphide (InP) supply chain.
According to the research firm, one major company rejected the idea that there is an InP bottleneck, while another confirmed a seven-year supply deal with Sumitomo, AXT, Inc.’s (NASDAQ:AXTI) main competitor. B. Riley has a Neutral rating on AXT, Inc. (NASDAQ:AXTI).
This news follows a disappointing fourth quarter in 2025 for the company. AXT, Inc. (NASDAQ:AXTI) said that it did not receive as many export permits in the quarter as it had hoped. However, it pointed out that it has already received some permits in 2026 and believes it is in a strong position to achieve sequential revenue growth in the first quarter of 2026. This growth is expected to be driven mainly by growth in indium phosphide used in building AI infrastructure.
Additionally, AXT, Inc. (NASDAQ:AXTI) said it is notably expanding its customer base to include Tier-1 companies to which it had limited exposure previously. The company is also on track to double its indium phosphide manufacturing capacity in 2026.
AXT, Inc. (NASDAQ:AXTI) is a material science company that develops and manufactures semiconductor substrate wafers. The company’s wafers are made up of indium phosphide (InP), gallium arsenide (GaAs), and germanium (Ge).
2. ImmunityBio, Inc. (NASDAQ:IBRX)
Q1 2026 Performance: 279.70%
ImmunityBio, Inc. (NASDAQ:IBRX) is one of the best-performing stocks of Q1 2026 to watch for Q2. On March 24, BTIG maintained its Buy rating on ImmunityBio, Inc. (NASDAQ:IBRX) with a price target of $13 after a recent regulatory action by the Food and Drug Administration (FDA).
The FDA’s Office of Prescription Drug Promotion sent a warning letter about promotional communications for ImmunityBio, Inc.’s (NASDAQ:IBRX) ANKTIVA. The agency believes promotional messages were false or misleading and lacked adequate risk presentation. The company has 15 days to respond and explain what steps it will take.
BTIG sees this as mainly a compliance and promotion matter that can likely be resolved. Based on the precedent set by the Office of Prescription Drug Promotion, the research firm does not expect legal action or product withdrawal. BTIIG also pointed out that the recent drop in the stock price presents a potential buying opportunity ahead of BCG-naïve bladder cancer data expected in the second half of 2026.
Earlier, on March 4, Piper Sandler increased its price target on ImmunityBio, Inc. (NASDAQ:IBRX) from $7 to $12 and kept an Overweight rating on the stock. The research firm forecasts US ANKTIVA net revenues to reach $195 million in 2026 after rising about 700% to $113 million in 2025.
ImmunityBio, Inc. (NASDAQ:IBRX) is a biotechnology company that is focused on developing and commercializing next-generation immunotherapies for cancer and infectious diseases.
1. Erasca, Inc. (NASDAQ:ERAS)
Q1 2026 Performance: 350.70%
Erasca, Inc. (NASDAQ:ERAS) is one of the best-performing stocks of Q1 2026 to watch for Q2. On March 12, H.C. Wainwright increased its price target on Erasca, Inc. (NASDAQ:ERAS) from $15 to $20 and kept its Buy rating on the stock.
The research firm pointed to Erasca, Inc.’s (NASDAQ:ERAS) clinical progress with its lead pan-RAS asset, ERAS-0015. As of January 2026, the drug showed encouraging results, with two confirmed partial responses and one unconfirmed partial response in patients with different tumor types and RAS mutations. These results were seen at doses above 8 mg once daily. The drug also showed consistent behavior across doses, with no dose-limiting toxicities observed.
Earlier, on March 10, Stifel also lifted its price target on Erasca, Inc. (NASDAQ:ERAS) from $10 to $20 and maintained its Buy rating on the stock. The research firm expects the company to generate about $3.2 billion in global revenue by 2035.
This update comes after Erasca, Inc. (NASDAQ:ERAS) announced the exercise of its option to expand its licensing agreement with Joyo Pharmatech to include China, Hong Kong, and Macau. This move gives the company full access to Joyo’s data, as well as global control over development and future data releases.
According to Erasca, Inc. (NASDAQ:ERAS), the number of patients treated in China so far is likely meaningfully higher than in the US. Stifel believes the company paid around $50 million for these expanded rights, although the exact figure was not disclosed. The firm sees this step as a strong indication of internal enthusiasm at Erasca, Inc. (NASDAQ:ERAS).
Erasca, Inc. (NASDAQ:ERAS) is a clinical-stage precision oncology company focused on discovering, developing, and commercializing therapies for patients with RAS/MAPK pathway-driven cancers.
While we acknowledge the potential of ERAS 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 ERAS and that has 100x upside potential, check out our report about the cheapest AI stock.
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Disclosure: None.
