In this article, we will be taking a look at the 7 Most Promising Psychedelic Stocks According to Hedge Funds.
The psychedelic industry is poised to have a significant “second wave,” transforming from a speculative, counterculture-driven movement into a recognized cornerstone of the US healthcare system. The industry has prioritized rigorous clinical studies, regulatory engagement, and structured therapy models over early-stage hype, mostly due to the growing mental health burden that costs the U.S. economy an estimated $282 billion yearly.
The U.S. now accounts for roughly 45% to 53% of the global psychedelic market. It is valued at approximately $4.51 billion in 2024, and the market is projected to reach $15.62 billion by 2032, reflecting a strong 16.8% compound annual growth rate. Psilocybin remains the industry’s “North Star.” Meanwhile, consumer demand continues to rise: an estimated 11 million U.S. adults used psilocybin in 2025, and nearly 10 million reported microdosing, intensifying the need to bridge underground use with clinical oversight.
The primary turning point is still regulation. Since the FDA has already rejected MDMA-assisted therapy, 2026 is mainly seen as a pivotal year. Regulatory submissions for the treatment of treatment-resistant depression are anticipated to be impacted by late-stage clinical readouts from businesses like Compass Pathways and Definium Therapeutics, which was previously known as MindMed.
Investor attention has simultaneously turned to commercial feasibility. Given the 6–8 hour supervised sessions needed for treatment, capital-strong and scalable therapist training models are increasingly essential. The safe operation of regulated adult-use frameworks is being demonstrated by state-led programs in Colorado and Oregon, which are promoting broader legislative momentum across the country.
With that being said, let’s now take a look at the most promising psychedelic stocks.
Photo by Florian van Duyn on Unsplash
Our Methodology
For this article, we began by filtering psychedelic stocks from etf’s like PSIL. From this list, we selected stocks with positive analyst upside and ranked them in ascending order based on their total number of hedge fund holders as of Q3 2025, as tracked by the Insider Monkey database.
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).
Here is our list of the 7 most psychedelic stocks according to hedge funds.
7. Cybin D/B/A Helus Pharma (NASDAQ:HELP)
Number of Hedge Fund Holders: 14
Price Target Upside: 667.97%
The seventh stock on our list of most promising stocks is Cybin D/B/A Helus Pharma (NASDAQ:HELP).
TheFly reported on February 2 that Jefferies initiated coverage of HELP with a Buy rating and a $22 price target and also highlighted significant upside potential. The firm has identified three key catalysts for 2026 which includes the recent appointment of a permanent CEO, which is seen as a crucial operational and strategic milestone supporting stock appreciation; the lead asset, HLP003, an oral d-psilocin therapy for adjunct major depressive disorder, has a roughly 60% probability of success in its Phase III trial, which could drive a 100%-200% share rally; and HLP004, an intramuscular d-DMT therapy, is anticipated to report de-risking Phase II data in Q1.
Furthermore, Cybin D/B/A Helus Pharma (NASDAQ:HELP) announced Q3 fiscal 2026 results on February 13 for the quarter that concluded on December 31, 2025, showing $195.1 million in cash on hand before any post-quarter adjustments. To advance a multi-asset neuroscience portfolio throughout many stages of development, the business placed a strong emphasis on maintaining disciplined execution across its clinical and operational priorities. The HLP003 Phase 3 and HLP004 Phase 2 studies are still making progress, with an emphasis on clinical strategies that are repeatable and scalable. HELP is well-positioned to deliver on future clinical milestones and generate long-term shareholder value thanks to its solid balance sheet and continuous clinical advances.
Cybin D/B/A Helus Pharma (NASDAQ:HELP) is a clinical‑stage psychedelic biotechnology company developing innovative psilocybin‑based and novel psychotherapeutic compounds and delivery systems to treat mental health conditions with science‑driven, evidence‑based approaches.
6. GH Research PLC (NASDAQ:GHRS)
Number of Hedge Fund Holders: 17
Price Target Upside: 128.98%
GH Research PLC (NASDAQ:GHRS) is placed sixth on our list.
TheFly reported that on January 23, RBC Capital raised its price target on GHRS to $40 from $33 and maintained an Outperform rating. RBC stated that it was growing more hopeful about GHRS’s long-term sales potential, particularly GH001, following the company’s Psychedelics Symposium and discussions with physicians, healthcare payers, and management.
Earlier on January 5, GH Research PLC (NASDAQ:GHRS) announced that the FDA had lifted the clinical hold on its IND for GH001, which allows U.S. patient enrollment and advancing global development plans. This permission allows the company to agree with the FDA on the trial design and puts it in a position to launch its key Phase 3 program in 2026. The Phase 2b results of GH001 demonstrated quick and long-lasting antidepressant benefits; 73% of patients maintained remission at six months with infrequent dosing, and 57.5% of patients experienced remission by Day 8. The treatment demonstrated its potential as a transformative therapy for depression that is resistant to treatment because it was well-tolerated, didn’t require psychotherapy, and facilitated a speedy patient discharge.
GH Research PLC (NASDAQ:GHRS) is a biotech company focused on developing innovative psychedelic‑derived therapies, advancing novel compounds to treat mental health disorders through rigorous clinical research and evidence‑based approaches that expand therapeutic options.
5. Bright Minds Biosciences Inc. (NASDAQ:DRUG)
Number of Hedge Fund Holders: 18
Price Target Upside: 48.23%
Bright Minds Biosciences Inc. (NASDAQ:DRUG) is among the most promising stocks.
TheFly reported on February 13 that Baird lowered its price target for DRUG to $126 from $142 and maintained an Outperform rating on the shares. The update follows the company’s fourth-quarter results and reflects adjustments to the firm’s model as Bright Minds prepares for upcoming epilepsy and PWS trial initiations.
Separately, earlier on January 6, Bright Minds Biosciences Inc. (NASDAQ:DRUG) announced positive topline results from its Phase 2 BREAKTHROUGH trial, which is assessing BMB-101. It is a selective 5-HT2C biased agonist, in adults with developmental and encephalopathic epilepsies (DEE) and drug-resistant absence seizures. In both patient cohorts, the study met its major effectiveness goals, which show significant reductions in seizures while also preserving a good safety and tolerability profile.
The reports show that the patients in the DEE group saw a median reduction of 63.3% in severe motor seizures, and a median reduction of 73.1% in seizures lasting three seconds or more in the Absence Seizure cohort. Beyond seizure management, the research also showed a noteworthy 90% increase in REM sleep without impacting overall sleep length, indicating possible cognitive advantages.
Bright Minds Biosciences Inc. (NASDAQ:DRUG) is a biotech psychedelics company developing next‑generation serotonin‑based therapies that harness the therapeutic benefits of psychedelic compounds for treatment‑resistant depression, epilepsy, PTSD, and other neuropsychiatric disorders, aiming to improve safety and efficacy over first‑generation psychedelics.
4. COMPASS Pathways plc (NASDAQ:CMPS)
Number of Hedge Fund Holders: 27
Price Target Upside: 91.08%
COMPASS Pathways plc (NASDAQ:CMPS) is given fourth position on our list of most promising stocks.
TheFly reported on February 14 that LifeSci Capital was bullish on CMPS, as the firm initiated coverage on the stock with a Buy rating and a $15 price target. In a similar move, earlier on January 23, RBC Capital raised its price target on CMPS to $21 from $16 and maintained an Outperform rating on the shares. The update follows the firm’s recent Psychedelics Symposium, with adjustments made to the CMPS model to better reflect key opinion leaders’ views on pricing and potential barriers to generic entry in the emerging psychedelic therapy market.
Separately, earlier on January 7, COMPASS Pathways plc (NASDAQ:CMPS) announced that the FDA had approved its IND application for COMP360, enabling a late-stage Phase 2b/3 trial in patients with PTSD. In addition to treatment-resistant depression (TRD), this is the company’s first foray into another significant psychiatric indication with a significant unmet need. In order to promote the smooth transition of COMP360 into clinical settings, Compass has bolstered partnerships with interventional psychiatry networks, including Radial, and expedited hiring for its commercial and regulatory teams in anticipation of a possible 2027 launch for TRD.
The corporation also highlighted that the operational cash burn remained consistent and within forecast, despite the GAAP net loss of $137.7 million appearing to be substantial. This is mainly due to the accounting treatment of warrants. As the firm progresses toward late-stage development and possible COMP360 commercialization, management emphasized that these strategic and operational actions allow the company to accelerate its clinical programs while maintaining financial flexibility.
COMPASS Pathways plc (NASDAQ:CMPS) is a clinical‑stage mental health company developing psilocybin‑based therapies and digital therapeutics to treat treatment‑resistant depression, advancing evidence‑based psychedelic medicine through rigorous research, scalable protocols, and personalized care models.
3. Definium Therapeutics, Inc. (NASDAQ:DFTX)
Number of Hedge Fund Holders: 29
Price Target Upside: 78%
The third stock on our list of most promising stocks is Definium Therapeutics, Inc. (NASDAQ:DFTX).
TheFly reported on January 30 that Jefferies initiated coverage of DFTX with a Buy rating and a $30 price target. The firm highlighted that a single dose of DT120, which is the company’s lead candidate, achieved a 48% remission rate in a Phase IIb trial for generalized anxiety disorder. The company’s growth potential in the GAD therapy landscape is further supported by Jefferies’ 65%–75% confidence that DT120 will produce best-in-class efficacy in the two Phase III trials that are scheduled to start in Q2.
Earlier on January 29, Baird increased its price target on Definium Therapeutics, Inc. (NASDAQ:DFTX) to $37 from $16 and maintained an Outperform rating. With hope for the candidate’s clinical impact and the company’s future growth, the firm revised its financial model to include DT120’s potential for treating major depressive disorder.
Moreover, on January 29, DFTX announced that it has appointed Roger Adsett, currently Chief Operating Officer of Insmed (INSM), to its Board of Directors. This addition expands the board from six to seven members, strengthening the company’s leadership team.
Definium Therapeutics, Inc. (NASDAQ:DFTX), formerly known as MindMed, is a clinical‑stage biotech applying scientific rigor to psychedelic‑inspired therapies for psychiatric and neurological disorders, advancing late‑stage LSD‑based and novel treatments with multiple Phase 3 programs to transform mental health care.
2. Neurocrine Biosciences, Inc. (NASDAQ:NBIX)
Number of Hedge Fund Holders: 60
Price Target Upside: 42.04%
Neurocrine Biosciences (NASDAQ:NBIX) takes second position on our list of most promising stocks.
TheFly reported on February 12 that Needham lowered its price target on NBIX to $185 from $187 and maintained a Buy rating. The company is still hopeful about Crenessity’s growth in 2026 and anticipates robust double-digit growth for Ingrezza, which is in line with consensus forecasts of $2.72 billion. The firm also emphasized Neurocrine’s pipeline, which is backed by two active Phase 3 programs and could offer a new medication every two years.
Earlier on February 11, Neurocrine Biosciences (NASDAQ:NBIX) reported fourth-quarter revenue of $805.5 million, which exceeded the $789.3 million consensus estimate. The management emphasized that the 2025 results show the commercial portfolio’s robustness and the company’s ongoing progress toward diversification as a biopharmaceutical business. The business intends to advance a pipeline led by late-stage initiatives and drive steady growth from INGREZZA and CRENESSITY (crinecerfont) through 2026. Osavampator for major depressive disorder and direclidine for schizophrenia are important Phase 3 assets. NBIX’s growing commercial base and developing clinical pipeline, according to the leadership, put it in a position to create long-term value for stakeholders and increase its influence on patients across a range of neuropsychiatric diseases.
Neurocrine Biosciences (NASDAQ:NBIX) is a neuroscience‑focused biopharmaceutical firm developing innovative psychiatric and neurological treatments. While not a classic psychedelic company, it still explores next‑generation mental health therapies with psychedelic‑like mechanisms targeting depression and schizophrenia through novel neuropsychiatric drug research.
1. AbbVie Inc. (NYSE:ABBV)
Number of Hedge Fund Holders: 93
Price Target Upside: 7.95%
AbbVie Inc. (NYSE:ABBV) tops our list for being one of the most promising stocks.
TheFly reported on February 4 that Evercore ISI lowered its price target on ABBV to $228 from $232 and maintained an Outperform rating. The firm noted that although Tremfya is gaining market share, AbbVie’s 2026 guidance and current consensus estimate still appear achievable, with similar expectations for 2027. But Evercore said that buy-side projections have been outpacing consensus for a while, which may limit the size of future earnings gains. The company went on to say that investor concerns are becoming more focused on AbbVie’s growth trajectory after 2028, especially as more rival treatments are anticipated to hit the market.
Additionally, AbbVie Inc. (NYSE:ABBV) reported full-year adjusted EPS of $10 on the same day that it closed 2025 with record performance, above its initial guidance midpoint by $0.54 (excluding IPR&D expenses). Overall sales increased 8.6% year over year despite a significant U.S. Humira decline, and total net revenue reached $61.2 billion, more than $2 billion above initial expectations.
In order to expand its pipeline across immunology, oncology, neuroscience, and obesity, the company completed almost $5 billion in business development deals, advanced about 90 clinical studies, and boosted adjusted R&D investment by almost $1 billion.
ABBV anticipates a 9.5% increase in overall revenues in 2026, mainly due to Skyrizi and Rinvoq, which are expected to generate a combined revenue of over $31 billion, surpassing previous long-term expectations.
Abbvie Inc. (NYSE:ABBV) is a global biopharmaceutical company expanding into psychedelic-inspired mental health treatments by acquiring and developing novel compounds like bretisilocin for major depressive disorder and partnering on next-gen neuroplastogen research, signaling strategic innovation beyond its traditional therapies into emerging psychiatric medicine.
While we acknowledge the potential of ABBV 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 ABBV and that has 100x upside potential, check out our report about this cheapest AI stock.
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