In this article, we will take a look at the most promising education stocks according to hedge funds.

With positive digital learning dynamics and accelerated enrollment rates, education platforms are scaling globally. The trend first started when COVID-19 hit, prompting institutions to rush to adopt digital platforms. Since then, the global higher education market has been experiencing strong growth.

On February 3, Maximize Market Research published an article titled “Higher Education Market: Global Industry Analysis and Forecast (2025-2032),” according to which the global higher education market size is expected to surge at a CAGR of 12.66% during the forecast period 2025-2032. By 2032, the market is expected to reach approximately USD 2,117.61 billion, driven by growing demand for digital learning, rising EdTech adoption, strategic investments by leading institutions, program expansion, and higher enrollments.

The report advances by supporting the tech-powered higher education delivery. According to the publication, the institutions that are effectively employing educational technology are achieving increased student retention, enhanced academic outcomes, and greater reach.

Keeping this outlook in mind for the education space, we have compiled a list of the most promising education stocks according to hedge funds.

Our Methodology

For this article, we began by filtering for stocks in the education sector having a market capitalization of over $300 million. Next, we shortlisted stocks with an upside potential of more than 5% and the highest number of hedge fund holdings. We limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. These stocks are then ranked by the number of hedge fund holdings, based on Insider Monkey’s database, as of Q4 2025.

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).

7. Afya Limited (NASDAQ:AFYA)

Number of Hedge Fund Holders: 9

On February 24, BofA reduced the price target on Afya Limited (NASDAQ:AFYA) to $17 from $22, while downgrading it from Buy to Neutral. According to the firm, increased investments in non-core businesses will put pressure on shareholder returns in the short-term. The analyst now expects the company’s medical practice solutions to scale up more gradually than previously thought.

The firm projects a free cash flow-to-equity yield of about 10% for this year, down from the earlier forecast of 13%. While undergraduate programs continue to keep generating strong cash flow, thanks to solid profit margins and revenue, the medical practice solutions segment is witnessing a lagged ramp-up. This division represents 5% of Afya Limited (NASDAQ:AFYA)’s revenue.

Earlier, on February 13, Morgan Stanley said that investments required to grow other businesses will possibly weigh on margins. Afya Limited (NASDAQ:AFYA) also faces additional structural pressures, including established medical undergraduate seats, which the firm believes will result in slower volume growth. That said, the firm downgraded the company to Underweight from Equalweight and cut the price target to $16, down from $17.50.

Afya Limited (NASDAQ:AFYA) is a Brazilian medical education group operating in three segments: Undergrad, Continuing Education, and Digital Services. Incorporated in 1999, the company offers educational products and services, digital health services, printed and digital content, an online medical education platform, and practical medical training services.

6. McGraw Hill, Inc. (NYSE:MH)

Number of Hedge Fund Holders: 15

On February 12, TheFly reported that Baird trimmed the price target on McGraw Hill, Inc. (NYSE:MH) to $19 from $21 and maintained an Outperform rating. This follows the firm’s model adjustment driven by solid results and improved guidance.

On the same day, BMO Capital also lowered the price target on McGraw Hill, Inc. (NYSE:MH) to $19 from $21 and reiterated an Outperform rating. The downward revision comes even after the company’s “strong beat” in the third-quarter, thanks to the Higher Education segment. According to BMO, the division’s outperformance was driven by market share gains, market skew growth, and a strengthened product mix, among other factors.

On the other hand, UBS slightly lifted the price target on McGraw Hill, Inc. (NYSE:MH) to $17, up from $16, as it believes shares will appreciate because of robust Q3 results. Although execution has been strong and the stock offers an appealing normalized free cash flow yield, concerns about AI’s impact in the long haul could constrain multiple expansion, the firm noted, adding that it remains neutral.

McGraw Hill, Inc. (NYSE:MH) is an Ohio-based provider of information solutions for K-12, higher education, and professional markets. Incorporated in 1888, the company operates through three segments: K-12, Higher Education, Global Professional, and International.