Despite the broader industry’s cyclical nature and the regulatory and supply chain risks that underlie companies, allocating investments to auto stocks can provide exposure to an expanding industry that is also innovative. The automotive industry has undergone a massive transformation toward electric vehicles and autonomous driving. Moreover, the adoption of hybrid technology has driven significant demand for more fuel-efficient, lower-emission vehicles.
Yet there are rising concerns for the U.S. auto businesses regarding consumer affordability. On January 26, CNBC published an article on the U.S. automotive industry, which, despite exhibiting resilience during the post-Covid era, is now expected to enter into a renewed phase of uncertainty. The industry was able to navigate through challenges over the last 6 years, which erupted due to supply chain issues, raw material shortages, and tariffs. However, the foreseeable future is likely to be characterized by lackluster consumer demand and affordability concerns, which will be slightly more difficult to tackle.
The article highlighted comments from Ford Motors CEO Jim Farley, who said:
“Anyone in the auto industry… we should all be very careful about consumer demand, that’s really important.”
It also referred to Hyundai North America CEO Randy Parker, who commented:
“We’ve got to plan for the worst and hope for the best, that’s the situation that we’re in right now.”
Given affordability concerns across the broader auto industry, it is fair to say that auto parts businesses will also come under pressure. However, there is potential for investors to identify interesting opportunities in this segment. With that background, let’s explore our selection of 8 best Auto Parts stocks according to Hedge Funds.
Copyright: microolga / 123RF Stock Photo
Our Methodology
To identify relevant stocks for this article, we screened U.S.-listed auto parts companies with market capitalizations above $2 billion. We then added a filter to exclude companies with share prices below $5 to ensure we do not include penny stocks on our list. We also shortlisted only stocks with at least 5% upside potential according to TipRanks consensus as of the January 29 close.
In the final part of the screening, we identified the number of hedge funds that held positions in these stocks as of the end of the third quarter of 2025. Finally, we selected 8 stocks with the highest number of hedge funds holding stakes and ranked them in ascending order.
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).
8. Advance Auto Parts (NYSE:AAP)
Number of Hedge Fund Holders: 32
Advance Auto Parts (NYSE:AAP) is one of the best Auto Parts stocks according to Hedge Funds.
On January 21, Aaron Reed from Northcoast Research indicated his optimism around Advance Auto Parts (NYSE:AAP). He upgraded his rating on the stock from Neutral to Buy, and estimated a price target of $55, which yields an upside of over 14%. Reed’s rating is based on his expectations of strong demand trends during 2026, following the ongoing performance enhancements.
On the flip side, TD Cowen analyst Max Rakhlenko reduced his price target on the stock substantially, from $62 to $46, and reiterated his Hold rating, according to The Fly. The revision was part of the analyst’s target adjustments across his hardlines group coverage.
Back on December 16, Greg Melich of Evercore ISI had reaffirmed his In-Line rating for Advance Auto Parts (NYSE:AAP). In the process, he revised his target price estimate for the stock from $58 to $56. Despite this downward revision, the stock still offers over 16% upside potential to investors from the prevailing level.
Advance Auto Parts (NYSE:AAP) provides automotive aftermarket parts such as batteries, brake pads, chassis parts, clutches, engine parts, exhaust systems, and more. Serving both professional installers and DIY customers with a balanced sales mix, the company operates more than 4,700 Advance Auto Parts and Carquest stores.
7. Autoliv Inc (NYSE:ALV)
Number of Hedge Fund Holders: 32
Autoliv Inc (NYSE:ALV) is one of the best Auto Parts stocks according to Hedge Funds.
On January 14, Baird analyst Luke Junk reaffirmed his Neutral rating for Autoliv Inc (NYSE:ALV). The analyst, however, raised his price target for the stock from $133 to $137.
Junk’s upward revision was part of Baird’s broader adjustments across vehicle technology and mobility group, in line with the fourth quarter results preview. The firm remains selective in its picks over the short run, given some skepticism regarding supply chain disruptions that are having an impact on auto affordability.
On January 12, Emmanuel Rosner from Wolfe Research maintained an Outperform rating on Autoliv Inc (NYSE:ALV), with a downward revision of the price target from $149 to $143. Despite the revision, the estimates still lead to over 13% upside from the current level.
Rosner reflected on the potential for management to share its 2026 guidance that might exceed Wall Street consensus. Based on underlying drivers such as automation, digitalization, headcount reductions, CPV growth, and productivity gains, he anticipates 2026 guidance of roughly 11% in adjusted operating margins, compared to consensus estimates of 10.8%.
Autoliv Inc (NYSE:ALV) is the largest supplier of automotive safety systems in the world, predominantly serving car manufacturers. It delivers passive safety systems as well as mobility safety solutions. Some of the offerings include airbags, seatbelts, pedestrian protection, inflator technologies, and battery cut-off switches.
6. Visteon Corp (NASDAQ:VC)
Number of Hedge Fund Holders: 33
Visteon Corp (NASDAQ:VC) is one of the best Auto Parts stocks according to Hedge Funds.
On January 15, Goldman Sachs analyst Mark Delaney reiterated his Buy rating on Visteon Corp (NASDAQ:VC), while lowering the price target from $130 to $120. The revised target leads to an upside potential of almost 30% at the current level.
Delaney’s rating is based on recent data for auto sales, along with growth expectations for the coming year. Projections remain favorable for the sector amid comments from various suppliers during the last quarter’s conferences.
On January 14, Luke Junk from Robert W. Baird also maintained an Outperform rating on Visteon Corp (NASDAQ:VC), while reducing his price target from $141 to $126. Despite the downward revision, Junk’s forecast yields an impressive 36% upside for investors.
Junk’s rating came at the back of Baird’s adjustments to vehicle technology and mobility stocks based on the fourth quarter earnings preview. The analyst noted certain headwinds related to supply chain disruptions.
Visteon Corp (NASDAQ:VC) is a leading automotive technology company, engaged in engineering and selling digital cockpit electronics, automotive electronics, and connected car solutions. With operations spanning across 18 countries, the company primarily serves vehicle manufacturers, offering instrument clusters, cockpit domain controllers, information displays, and infotainment solutions.
5. Garrett Motion (NASDAQ:GTX)
Number of Hedge Fund Holders: 37
Garrett Motion (NASDAQ:GTX) is one of the best Auto Parts stocks according to Hedge Funds.
As of the close of play on January 29, sentiment remains highly bullish around Garrett Motion (NASDAQ:GTX). The stock had received coverage from 3 analysts, all of whom assigned Buy ratings. With a median 1-year price target of $22, it offers more than 20% upside potential from the prevailing level.
On December 17, Ryan Brinkman from JPMorgan initiated his coverage on Garrett Motion (NASDAQ:GTX), assigning an Overweight rating to the stock. He forecasted a target price of $23, which implies a 26% upside potential.
Brinkman attributed his stance to potential tailwinds from the company’s latest zero-emission vehicle offerings, along with a lower risk profile for the company’s internal combustion engine (ICE) business. He also acknowledged the company’s impressive free cash conversion ability and best-in-class leverage position. Another critical factor backing such an optimistic outlook is the company’s end-markets that appear less cyclical relative to other auto parts suppliers.
Garrett Motion (NASDAQ:GTX) develops and sells turbocharging, electric boosting, and air & fluid compression technologies. It primarily serves commercial vehicle OEMs and aftermarket distributors, aiming to improve powertrain efficiency and reduce emissions. It is also involved in the development of technologies for zero-emission mobility and industrial space.
4. Goodyear Tire & Rubber (NASDAQ:GT)
Number of Hedge Fund Holders: 39
Goodyear Tire & Rubber (NASDAQ:GT) is one of the best Auto Parts stocks according to Hedge Funds.
As of January 29 closing, Goodyear Tire & Rubber (NASDAQ:GT) carried moderately bullish consensus views. Out of 5 analysts who provided coverage on the stock, 3 assigned Buy ratings and 1 gave a Hold call. With just 1 Sell call, it has a median 1-year price target of $10.26, which results in almost 7% upside potential.
On January 22, Edison Yu from Deutsche Bank maintained his Buy rating on Goodyear Tire & Rubber (NASDAQ:GT), prior to the upcoming quarterly earnings announcement. He assigned a price target of $12, which results in an upside potential of almost 25%.
Yu anticipates strong potential for Goodyear in the replacement tire market, as the long-awaited low-cost inventory digestion has kicked in at retailers. He also projects stronger-than-expected results from the company despite a meager 4% reduction in tire volumes, in line with guidance.
Goodyear Tire & Rubber (NASDAQ:GT) is a global manufacturer and seller of tires and related products and services. These products and services have automotive, commercial, and specialty applications. The company offers a variety of rubber tires for aircraft, buses, cars, industrial equipment, motorcycles, and trucks. It operates under prominent brands such as Goodyear, Cooper, Dunlop, Roadmaster, Fulda, and Remington.
3. Aptiv PLC (NYSE:APTV)
Number of Hedge Fund Holders: 40
Aptiv PLC (NYSE:APTV) is one of the best Auto Parts stocks according to Hedge Funds.
On January 14, Joseph Spak from UBS reaffirmed his Neutral rating on Aptiv PLC (NYSE:APTV), while adjusting his estimated price target from $94 to $99. With almost 26% upside potential based on the revised target, the analyst remains cautious about the stock prior to earnings announcements.
On January 8, Aptiv PLC (NYSE:APTV) was subject to a ratings upgrade, from Neutral to Overweight, by Piper Sandler analyst Alexander Potter. He also adjusted the target price estimate from $87 $103, resulting in an upside potential of almost 31%.
Potter noted the company’s pragmatic strategy in recent years, which has now led to a more realistic value proposition and growth milestones. Based on sum-of-the-parts valuation, Potter finds the stock to be priced at an attractive range. Moreover, Aptiv PLC (NYSE:APTV) has been identified by Piper Sandler as its “top supplier idea for 2026.”
Aptiv PLC (NYSE: APTV) offers advanced electrical and active safety technologies that enable safer, greener mobility solutions. Operating through 2 segments, Signal & Power Solutions, and Advanced Safety & User Experience, it develops and sells vehicle components for automotive and commercial vehicles.
2. Mobileye Global (NASDAQ:MBLY)
Number of Hedge Fund Holders: 43
Mobileye Global (NASDAQ:MBLY) is one of the best Auto Parts stocks according to Hedge Funds.
On January 23, George Gianarikas from Canaccord Genuity reaffirmed his Buy rating for Mobileye Global (NASDAQ:MBLY). Although the analyst revised his price target estimate from $30 to $24, it still results in a lucrative upside potential of almost 159%.
Gianarikas did highlight certain areas that led to reservations regarding the company’s long-term earnings potential. These include a cycle of guidance cuts and perceived halts on next-generation OEM partnerships. Despite these issues, the analyst has a favorable outlook on the stock.
On January 23, Raymond James analyst Brian Gesuale maintained his Outperform rating on Mobileye Global (NASDAQ:MBLY) after the company announced its fourth-quarter results. He set a price target of $16, which yields an upside potential of almost 73%.
The company registered $446 million in revenues, which was an outperformance relative to expectations. It shipped 8.3 million systems at an average unit price of $50.80, yielding benefits from SuperVision products within the overall mix. Management has dubbed 2026 a transition year, and Raymond James expects some catalysts to emerge during the later stages of 2026.
Mobileye Global (NASDAQ:MBLY) develops advanced driver assistance systems (ADAS) and autonomous driving technologies (AV). It delivers end-to-end solutions comprising Base ADAS, Cloud-Enhanced ADAS, and Surround ADAS. It also offers safety features, including collision warning, lane departure warnings, headway monitoring, speed limit indicator, blind spot detection, and more.
1. AutoZone Inc (NYSE:AZO)
Number of Hedge Fund Holders: 60
AutoZone Inc (NYSE:AZO) is one of the best Auto Parts stocks according to Hedge Funds.
On December 18, Christopher Horvers from JPMorgan maintained his Overweight rating on AutoZone Inc (NYSE:AZO), cutting down his price target estimate from $4,850 to $4,100 in the process. His revised target now leads to an upside potential of almost 11% at the current level.
Horvers kept his bullish outlook on AutoZone Inc (NYSE:AZO), even after the company’s weaker-than-expected sales figures reported for the fourth quarter. He also emphasized management’s ambitions to extend resources towards the acceleration of store growth, which he expects will persist longer than previously anticipated. Despite identifying some weather-related headwinds, given the company’s two polar vortexes, Horvers still remains positive on the company’s prospects.
Back on December 16, Wolfe Research analyst Spencer Hanus had downgraded his rating on AutoZone Inc (NYSE:AZO) from Outperform to Peer Perform.
However, the broader sentiment for the stock remains strongly bullish. It has received Buy ratings from 17 of the 20 analysts covering it as of the December 29 close. The stock offers a consensus upside of over 16%, based on a median 1-year target price of $4,282.
AutoZone Inc (NYSE:AZO) operates retail stores and a distribution network for automotive replacement parts, non-automotive products, accessories, and maintenance items. It offers products for cars, utility vehicles, light trucks, and vans, serving both DIY customers and commercial repair centers. The company manages a high-volume supply chain network for its private brands such as Duralast.
While we acknowledge the potential of AZO as an investment, 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 AZO and that has 100x upside potential, check out our report about the cheapest AI stock.
READ NEXT: 15 Most Promising Mid-Cap Healthcare Stocks Under $50 and 11 Most Promising Small-Cap Industrial Stocks Under $50.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
