10 Best Up and Coming Stocks To Invest In

Published June 6, 2022 at 11:06 am EDT Updated September 7, 2026 at 11:31 am EDT

In this article, we discuss the 10 best up and coming stocks to invest in.

With the first half of the year nearly in the books, investors on Wall Street are now facing new challenges that will test their patience and understanding of the market. Years of government payouts and supply chain disruptions have started to result in more inflation than the Fed is willing to accept, and the ramifications of stimulating the economy to offset the impact of the pandemic are starting to accumulate. The economy, especially in the United States, is dangerously close to a recession as all benchmark indexes are down year-to-date. The S&P 500 Index is down over 17.88% year-to-date, while the tech-friendly NASDAQ Composite has fallen approximately 27% since the start of the year, and 1,939 points since topping out in the third quarter of last year. In contrast to this, inflation in the U.S. hit a fresh 40-year record in March as consumer prices rose 8.5% from a year ago.

Under the threat of looming rate hikes, several investors and analysts have shifted their focus from tech stocks to growth stocks with actual revenues. As a result, a number of household names have been sold in an attempt to seek refuge from impending volatility. The sell-off in the technology sector reflects the investors’ anxiety within the current macro setup, forcing them to look toward higher-risk strategies to build wealth in the wake of a recession. With businesses tapping into new market opportunities, those who invest in emerging players often reap the highest rewards. While the analyst community expects market volatility to persevere in the near term, it also forecasts that stocks will rally this summer, even if it is only due to normal seasonal fluctuations.

In this regard, the best stocks to buy now are directly correlated to the Fed’s decisions around interest hikes. Consequently, the higher-rate environment won’t treat every company similarly, which means that the current economy will serve as a catalyst for some companies and an obstacle for many more. Given the changing market environment, some of the best up and coming stocks that investors should look out for include Northrop Grumman Corporation (NYSE:NOC), Coinbase Global, Inc. (NASDAQ:COIN), and CrowdStrike Holdings, Inc. (NASDAQ:CRWD), among others listed below.

Photo by Mohamed Hadji on Unsplash

Our Methodology

In order to pick the 10 best up and coming stocks to invest in, we did a careful assessment of several high-quality growth stocks that have upside potential. We also took into account company financials, most recent quarterly results, and the analyst and sentiment around these stocks.

The hedge fund sentiment around each stock was derived from Insider Monkey’s database which tracks 912 hedge funds as of the first quarter of 2022.

10 Best Up and Coming Stocks To Invest In

10. Krispy Kreme, Inc. (NASDAQ:DNUT)

Number Of Hedge Fund Holders: 11

Krispy Kreme, Inc. (NASDAQ:DNUT) is an American multinational doughnut company and coffeehouse chain that operates in more than 1,000 locations throughout the U.S. and in about 25 other countries. On May 16, Krispy Kreme, Inc. (NASDAQ:DNUT) declared a $0.035 per share quarterly dividend, in line with the previous, with a forward yield of 0.97%.

For the fiscal first quarter of 2022, Krispy Kreme, Inc. announced that its quarterly revenues came in at $372.53 million, outperforming the market by more than $3.85 million. The company also reported an EPS of $0.08, beating expert estimates by $0.01.

On May 12, Morgan Stanley analyst John Glass reiterated an Overweight rating on the shares of Krispy Kreme, Inc. alongside a $17 price target after the company reported “surprisingly robust” Q1 results. According to the analyst, the company’s 10%-12% year-over-year organic revenue growth targets “appear conservative.”

According to the first quarter database of Insider Monkey, 11 hedge funds held long positions in Krispy Kreme, Inc., compared to 13 funds in the previous quarter. The total stakes owned in Q1 amounted to $34.5 million. Richard Driehaus’ Driehaus Capital is the biggest shareholder in the company, with 860,863 shares worth approximately $12.78 million.

Much like Northrop Grumman Corporation, Coinbase Global, Inc., and CrowdStrike Holdings, Inc., Krispy Kreme, Inc. is a decent stock with plenty of upside potential.

9. Duolingo, Inc. (NASDAQ:DUOL)

Number Of Hedge Fund Holders: 14

Duolingo, Inc. (NASDAQ:DUOL) is an American language-learning website company that also operates a language learning application. The company provides digital language expertise tests based on written translation, reading and speaking comprehension, and short stories. Shares of the Pittsburgh-based online learning platform soared higher, marking gains of more than 17% at the pre-market highs on May 13.

Raymond James analyst Aaron Kessler upgraded Duolingo, Inc. to Outperform from Market Perform with a $98 price target on May 13. Based on the analyst’s remarks, the company reported a strong Q1, with an acceleration in monthly active users, daily active users, and paid subscribers as product innovations drove increased user engagement, retention, and conversion.

According to Insider Monkey’s Q1 data, 14 hedge funds held long positions in Duolingo, Inc., up from 12 funds in the last quarter. Henry Ellenbogen’s Durable Capital Partners held the largest stake in the company, consisting of 3.2 million shares worth about $309 million.

8. Monday.com Ltd. (NASDAQ:MNDY)

Number Of Hedge Fund Holders: 24

Based in Tel Aviv, Israel, Monday.com Ltd. (NASDAQ:MNDY) is a systems software firm that allows users to create their own applications and work management software. In the first quarter of the fiscal year 2022, monday.com Ltd. reported revenues of $108.5 million, up 84% compared to the year-ago period.

Earlier this May, Cowen analyst J. Derrick Wood lowered the price target on Monday.com Ltd to $200 from $240 and maintained an Outperform rating on the shares. According to Wood, the company’s metrics were all very strong. Based on his notes to investors, Monday.com Ltd. had a raised revenue growth guidance and he sees plenty of upside potential in the company.

At the end of the first quarter of 2022, 24 hedge funds in the database of Insider Monkey held stakes worth $681.3 million in Monday.com Ltd., compared to 25 in the preceding quarter. Chase Coleman and Feroz Dewan’s Tiger Global Management LLC is a leading shareholder in monday.com Ltd. with 2.07 million shares worth more than $328.12 million.

7. Opendoor Technologies Inc. (NASDAQ:OPEN)

Number Of Hedge Fund Holders: 35

Opendoor Technologies Inc. (NASDAQ:OPEN) is an online company for transacting in residential real estate. Headquartered in San Francisco, the company makes instant cash offers on homes through an online process, makes repairs on the properties it purchases, and relists them for sale. The company purchased nearly 37,000 homes in 2021, up almost 500% on a year-over-year basis, and sold nearly 22,000 of them by year-end.

Earlier this March, BTIG analyst Jake Fuller upgraded Opendoor Technologies Inc. to Buy from Neutral with a $15 price target. The analyst states that despite the tight housing inventory and investor concern around how the iBuyer model may fare, he continues to see robust demand for Opendoor Technologies Inc. on both the sell-side and buy-side with triple-digit mid-funnel traffic growth so far in Q1.

In the first quarter of 2022, 35 hedge funds reported owning stakes in Opendoor Technologies Inc. according to Insider Monkey’s records, collectively worth approximately $1.04 billion. Sylebra Capital Management held a prominent position in the company, with 24.8 million shares valued at $214.8 million.

Baron Opportunity Fund published its second-quarter investor letter and mentioned Opendoor Technologies Inc.. Here is what the fund said:

“Opendoor Technologies Inc. operates a digital platform for home purchases and sales on which buyers can tour homes, make offers, and secure financing, and sellers can receive next-day cash offers with flexible close dates. Shares were down in the quarter given rising mortgage rates and the potential knock-on effects to the housing environment. Despite investor concerns, the housing market remains robust. As the iBuying industry leader disrupting an enormous and highly inefficient industry, we believe Opendoor will grow regardless of the housing market environment.”

6. Teladoc Health, Inc. (NYSE:TDOC)

Number Of Hedge Fund Holders: 36

Teladoc Health, Inc. (NYSE:TDOC) is a multinational telemedicine and virtual healthcare company that provides telehealth, medical opinions, AI and analytics, telehealth devices, and licensable platform services. A global leader in whole-person virtual care, the company’s first quarter revenue grew 25% year-over-year to $565.4 million.

On May 13, Piper Sandler analyst Jessica Tassan raised her price target on Teladoc Health, Inc. to $42 from $21 and kept an Overweight rating on the shares. The analyst tweaked her BetterHelp and Chronic Condition estimates based on an evaluation of the direct-to-consumer behavioral healthcare market, interim app data, and a conversation with the company.

According to Insider Monkey’s database, Teladoc Health, Inc. was spotted on 36 investment portfolios by the end of the first quarter of 2022. The total stakes of these funds in the company amounted to approximately $1.96 billion. Catherine D. Wood’s ARK Investment Management is the most prominent investor in Teladoc Health, Inc. with stakes worth approximately $1.4 billion in the company.

Similar to Northrop Grumman Corporation, Coinbase Global, Inc., and CrowdStrike Holdings, Inc., Teladoc Health, Inc. is a stock investors should pay attention to.

Investment firm RiverPark Funds talked about Teladoc Health, Inc. in its Q1 2022 investor letter. Here is what they said:

“Teladoc is the largest telehealth provider in the US and has recently begun to expand internationally. TDOC’s platform enables an ever-expanding list of patient-doctor interactions (including those for primary health care, mental health issues and chronic condition management) to transition from an on-site visit to one that can be done remotely with full video- based interaction. TDOC provides its platform of services on both a business-to-business and direct-to-consumer basis, through monthly subscription-based relationships. For its core business-to-business clients, the company contracts with a wide range of entities, including large scale employers (the company currently contracts with over 50% of the Fortune 500), health plans, health systems, and medical insurance companies, which currently cover more than 50 million members. For these customers, the company provides a win-win-win, as patients spend no time traveling and less time waiting, doctors are more efficient seeing more patients in less time, and payers (employers and plan sponsors) save money while being able to offer a highly popular additional benefit for their employees. This B to B market is projected to be a +$100 billion market opportunity and TDOC is the clear global market leader. For its direct-to- consumer clients, the company provides a growing suite of services for individuals to have affordable access to on-demand and scheduled medical services, for which their current insurance does not provide reimbursement (such as extended mental health counseling).

Although the company has been growing steadily for well over a decade, the business has transformed over the past few years as the COVID pandemic caused a significant increase in the demand for virtual healthcare. In addition, the company’s 2020 acquisitions of Livongo, the leader in virtual chronic condition management, and InTouch a competitive telehealth platform, materially broadened the company’s product offerings. At its recent analyst day, management guided to 25-30% top line growth for each of the next three years, exiting 2024 with more than $4 billion in annual revenue. The company also anticipates expanding margins by 100-150 basis points per year in each of the next three years, while still accelerating its investments in marketing and R&D. As with many of our recent purchases, we took advantage of the decline in the company’s shares (down a breathtaking 70% from its 2021 high of almost $300 per share) to establish a small position in Teladoc.”

5. Northrop Grumman Corporation (NYSE:NOC)

Number Of Hedge Fund Holders: 39

Northrop Grumman Corporation is an American multinational aerospace and defense technology company that specializes in commercial aerospace, electronics, and information-technology products and services. In early April, the defense firm was awarded a $254.42 million firm-fixed-price modification to a previously awarded contract to exercise an option for production of its Surface Electronic Warfare Improvement Program Block 3 Hemisphere systems, which is expected to be completed by September 2025.

Northrop Grumman Corporation declared a quarterly dividend of $1.73 per share on May 17, which would be payable on June 15, 2022, to shareholders of record as of the close of business on May 31, 2022.

On May 12, Argus analyst John Eade raised the price target on Northrop Grumman Corporation to $495 from $420 and maintained a Buy rating on the shares. According to the analyst, the defense firm has consistently delivered positive surprises to investors on Wall Street in recent years, regardless of whether defense spending was rising or falling.

Based on Insider Monkey’s Q1 data, Northrop Grumman Corporation was found in the public stock portfolios of 39 hedge funds, up from 33 funds in Q4 2022. Donald Yacktman’s Yacktman Asset Management owned a sizable position in Northrop Grumman Corporation in the first quarter of 2022, with 435,159 shares worth $194.6 million.

In its Q1 2022 investor letter, LRT Capital Management, an asset management firm, highlighted a few stocks and Northrop Grumman Corporation was one of them. Here is what the fund said:

“Based in Virginia, Northrop Grumman Corporation is one of the world’s largest defense contractors with annual revenue of more than $30 billion. The company operates in a cozy oligopoly, that after decades of consolidation has resulted in the US defense market being controlled by five large companies: The Boeing Company (BA), General Dynamics Corporation (GD), Lockheed Martin Corporation (LMT), Northrop Grumman Corporation (NOC), and Raytheon Technologies Corporation (RTX).

Industry barriers to entry are immense, government procurement cycles are extremely long, and the consolidated industry structure reflects this. This has allowed Northrop Grumman Corporation to earn stable mid-teens returns on invested capital (ROIC) and grow earnings per share at a rate of over 13% per year in the past decade, despite a topline that has grown only in-line with inflation. Even after the recent run-up in the stock price, it trades at approximate 15x next year’s earnings estimates, far below the S&P 500 index, despite being an above average company. While nominally, there are five major defense contractors, the true industry concentration is even higher because not all companies compete in all possible business segments. General Dynamics’ submarine division, Electric Boat, is the sole supplier of nuclear power submarines in the United States. Lockheed Martin is the sole supplier of the F-18, the F-35 and the F-22. Northrop was the sole bidder on the contract to develop the next generation of intercontinental ballistic missiles; Raytheon dominates missile systems; and so on.

Northrop’s revenue growth over the past decade has been mediocre but even that has led to impressive shareholder returns that have far outpaced the S&P500. What’s more, we believe that revenue growth may accelerate in the next few years. A lot of ink is spilled every year about the “massive” U.S. defense budget that critics claim is “out of control”. Given this, you might be surprised to hear that U.S. defense spending as a share of GDP is at the lowest level in recorded history, at a mere 3.8%. In other words, U.S. military spending could double and not be out of line with historical norms. While we are not calling for a new Cold War, given the global instability we are witnessing, it is not unreasonable to expect U.S. defense spending to grow faster than GDP over the next decade.”

4. Coinbase Global, Inc. (NASDAQ:COIN)

Number Of Hedge Fund Holders: 46

Coinbase Global, Inc., is a Delaware-based company that operates a cryptocurrency exchange platform. Providing financial infrastructure and technology for the global crypto market, Coinbase Global, Inc. ended 2021 with an average of 11.4 million monthly transacting users, more than 300% above 2020’s level.

Cowen analyst Stephen Glagola on May 26 initiated coverage of Coinbase Global, Inc. with an Outperform rating and an $85 price target. According to the analyst, Coinbase Global, Inc. has a dominant spot volume exchange position in the U.S. and he expects it to be primarily an exchange/retail brokerage-driven story over the next several years. Additionally, he believes that the company can grow at a double-digit percentage compound annual growth rate for “the foreseeable future” and argues that its security infrastructure and regulatory adherence are a structural advantage over global competitors.

Among the hedge funds tracked by Insider Monkey, 46 funds were bullish on Coinbase Global, Inc. at the end of Q1 2022, down from 57 funds in the prior quarter. Cathie Wood’s ARK Investment Management is the biggest shareholder of the company, with close to 7 million shares worth $1.3 billion.

Here is what Longleaf Partners Fund has to say about Coinbase Global, Inc. in its Q4 2021 investor letter:

“We also have seen plenty of IPO/SPAC craziness showing both that private players need public markets more than they admit and that there is more volatility embedded in these newer companies than a private quarterly mark might admit. As for how efficient both the private and public markets are, we would encourage you to really delve into some of those multi-hundred-page S1s for many of the newest public companies to see the huge gap between the last valuation at which the company was funded and/or granted shares to its executives and the often much higher price at which the company went public – Coinbase is a prime example.”

3. Bill.com Holdings, Inc. (NYSE:BILL)

Number Of Hedge Fund Holders: 58

Bill.com Holdings, Inc. (NYSE:BILL) is a financial technology company that offers an AI-powered cloud software to simplify, digitize, and automate back-office financial operations for small and medium-sized businesses to optimize their payment systems.

JPMorgan analyst Tien-tsin Huang initiated coverage of Bill.com Holdings, Inc. with an Overweight rating and a $140 price target on May 20. According to Huang, the stock is off 67% from the November 2021 high, creating an opportunity to own what he calls a “bona fide growth stock with early-mover advantages and nascent cross-selling opportunities.”

Bill.com Holdings, Inc. reported its first quarter earnings on May 5, recording an EPS of -$0.08 which beat estimates by $0.08. Revenue stood at $166.9 million for the quarter, above estimates by $9 million and up 179% on a year-over-year basis.

According to Insider Monkey’s Q1 data, Bill.com Holdings, Inc. was part of 58 public hedge fund portfolios, down from 65 funds in the preceding quarter. Stephen Mandel’s Lone Pine Capital held a prominent stake in the company, consisting of 1.3 million shares worth $309.6 million.

Here is what Alger Mid Cap Focus Fund has to say about Bill.com Holdings, Inc. in its Q4 2021 investor letter:

“Bill.com Holdings, Inc., was among the top detractors from performance. Bill.com provides cloud-based software solutions that simplify, digitize, and automate complex back-office financial operations for small and medium size businesses. Its software helps customers to generate and process invoices, streamline approvals, send and receive payments, synchronize data with their accounting system and manage their cash.”

2. Cheniere Energy, Inc. (NYSE:LNG)

Number Of Hedge Fund Holders: 62

Cheniere Energy, Inc. (NYSE:LNG) operates as an energy infrastructure company in the United States. Engaged in liquified natural gas (LNG) related businesses, the company owns and operates LNG terminals, and develops, constructs, and operates liquefaction projects near Corpus Christi, Texas.

This May, Cheniere Energy, Inc. reported earnings for the fiscal first quarter of 2022. The company reported revenues of $7.48 billion, an increase of 142.20% on a year-over-year basis, and surpassed market forecasts by $1.92 billion.

On May 23, RBC Capital analyst Elvira Scotto raised the price target on Cheniere Energy, Inc. to $178 from $151 and maintained an Outperform rating on the shares after its Q1 results. While it remains well-positioned to benefit from growing demand for liquefied natural gas globally, he adds that in the near- term, given its open capacity, the company should benefit from strong margins as well.

According to Insider Monkey’s database, 62 hedge funds held stakes in Cheniere Energy, Inc. at the end of the first quarter of 2022. The total value of these stakes was approximately $3.2 billion. This is compared to 52 hedge funds in the fourth quarter of 2021 with stakes of $3.38 billion. Carl Icahn’s Icahn Capital LP is the most prominent shareholder in Cheniere Energy, Inc., owning more than 9.72 million shares of stock which amount to a stake of $1.34 billion.

ClearBridge Investments published its “Global Infrastructure Value Strategy” third-quarter 2021 investor letter, in which the firm mentioned Cheniere Energy, Inc.. Here is what they said:

“Cheniere Energy is an energy infrastructure company that owns and operates U.S. liquefied natural gas (LNG) export facilities. Strong quarterly results and the disclosure of capital allocation policies were positively received by the markets. In addition, continued supply and demand tightness in the LNG market created a favorable commodity price environment.”

1. CrowdStrike Holdings, Inc. (NASDAQ:CRWD)

Number Of Hedge Fund Holders: 80

CrowdStrike Holdings, Inc. is an American cybersecurity technology company based in Austin, Texas, that provides cloud workload and endpoint security, threat intelligence, and cyberattack response services. The company increased its annual recurring revenue (ARR) by 65% in its 2022 fiscal year to $1.7 billion, and forecasts a rise to $5 billion by its 2026 fiscal year.

On May 23, Stephens analyst Brian Colley initiated coverage of CrowdStrike Holdings, Inc. with an Overweight rating and a $232 price target. The analyst cites four key reasons behind this initiation, one of which is a “sizable underpenetrated opportunity in the cloud security market.”

80 out of the 912 hedge funds tracked by Insider Monkey held stakes in CrowdStrike Holdings, Inc. in the first quarter of 2022, worth $5.55 billion, compared to 74 in the preceding quarter, holding stakes in CrowdStrike Holdings, Inc. valued at $5.23 billion. Among these, New York-based investment firm Tiger Global Management LLC is a leading shareholder in CrowdStrike Holdings, Inc., with 8.8 million shares worth more than $2 billion.

Baron Funds, in its Q1 2022 investor letter, mentioned CrowdStrike Holdings, Inc.. Here is what the fund said:

“CrowdStrike, Inc. provides cloud-delivered, next generation security solutions via its Falcon platform consisting of end-point protection, advanced persistent threat, security information, event management, and cloud workload protection. Shares rose 11% in the first quarter, on the back of impressive quarterly results with net new annual recurring revenue (ARR) accelerating for the second straight quarter to 52% year-over-year and the company’s favorable unit economics driving 30% free cash flow margins. Moreover, key new disclosures highlight how non-end-point products are seeing momentum with cloud product-generated ARR surpassing $100 million, representing 8% of net new ARR in the quarter. With more workloads migrating to or starting in the cloud, we believe CrowdStrike is well positioned to compound at high growth rates for years given its unique product platform and attractive go-to-market business model.”

You can also take a look at 10 European Defense Stocks to Buy Now and 10 Growth ETFs to Buy Now.

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