In this article, we will look at the 8 Best Industrial Stocks to Buy in 2026.
Industrial stocks have been on a roll, outperforming the overall equity market, driven by strong gains in electrical equipment and commercial aerospace. The S&P Industrials Sector is already up by about 8% year to date, more than double the 3% gain of the broader S&P 500 benchmark.
The outperformance comes against the backdrop of concerns that higher oil prices due to the Iran war will ignite a fresh wave of inflation, making it difficult to transport goods to and from. There were also concerns that surging energy costs would lead to higher goods prices and reduced demand for construction and goods shipments.
“This sector is seen as cyclical, and with greater concern over macroeconomic conditions, this group is generally hit hard,” noted Mark Hackett, chief market strategist at Nationwide. “All in, given what we have been up against, I consider that resilience.”
Fast forward, and industrial stocks have rallied as investors rotate out of tech stocks and bet that manufacturers will benefit from strong economic growth. The rally looks set to continue due to the AI data center building boom, record commercial aerospace demand, and record military spending.
Dr. Ed Yardeni, the President and Chief Investment Strategist of Yardeni Research, remains bullish on Industrial stocks owing to impressive earnings growth prospects despite higher valuation multiples. The sentiment comes as Industrials remain the best-performing sector, right behind Energy and Materials.
On-shoring, supply-chain diversification, defense rearmament, and the energy infrastructure demands of AI are among the developments expected to drive a multi-year capex boom that should benefit Industrial stocks.
Our Methodology
To compile a list of the 8 Best Industrial Stocks to Buy in 2026, we used the Finviz screener and analyzed Industrials ETFs to identify Industrial stocks. We settled on Industrial companies listed on the market with market capitalizations above $2 billion that have achieved revenue growth exceeding 20% over the past five years. We trimmed the list to stocks with upside potential of more than 20%, and that are popular among elite hedge funds in Q4 2025. Finally, we ranked the stocks in ascending order by upside potential (as of April 22).
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research shows 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 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
Best Industrial Stocks to Buy in 2026
8. HEICO Corporation (NYSE:HEI)
Stock Upside Potential: 23.57%
Number of Hedge Fund Holders: 73
HEICO Corporation (NYSE:HEI) is one of the best industrial stocks to buy in 2026. On April 7, Jefferies reiterated its Buy rating on HEICO Corporation and maintained a $400 price target. The bullish stance is in response to the industrial company announcing that it has reached an agreement to acquire an 80% stake in Sherwood Avionics and Accessories.
With the acquisition, Heico gains access to a unit that has carved a niche as a maintenance, repair, and overhaul provider for defense and select commercial aviation platforms. The unit employs 150 people and generates an average of $45 million in revenue. Its capabilities include auxiliary power units (APUs), landing gear systems, avionics components, and related accessories.
Jefferies expects the acquisition to add about 1% to Heico’s total annual revenue and result in about a 1% increase in earnings per share. On the back of the acquisition, Jefferies expects Heico to achieve 12% revenue growth in 2026, with organic growth contributing about 7% points. Mergers and acquisitions are also expected to add about 5% points.
HEICO Corporation is a leading, technology-driven aerospace and electronics company that designs, manufactures, and distributes critical aircraft replacement parts, electronic components, and specialized systems. HEICO serves customers in the aerospace, defense, space, medical, and telecommunications industries, focusing on providing high-quality, cost-effective aftermarket alternatives.
7. Amentum Holdings Inc. (NYSE:AMTM)
Stock Upside Potential: 30.29%
Number of Hedge Fund Holders: 35
Amentum Holdings Inc. (NYSE:AMTM) is one of the best industrial stocks to buy in 2026. On April 16, Citizens reiterated a Market Outperform rating on Amentum Holdings Inc. and set a $40 price target.
The research firm has touted the company’s growth prospects and profitability opportunities following meetings with top management. The company remains well-positioned to capitalize on its status as one of the largest pure-play government services players. It boasts a competitive edge following its merger with Jacobs Solution’s Critical Mission Solutions and Cyber & Intelligence business segments.
Consequently, Amentum Holdings remains in a solid position to pursue large contracts vital to national security and critical infrastructure. Last year, it placed $35 billion in bids for contracts and is on course to repeat the feat.
Citizens sees significant upside potential in the stock as Amentum Holdings turns its attention to nuclear capacity build-out, space systems, and infrastructure development.
Amentum Holdings Inc is a global leader in advanced engineering, technology solutions, and project management for U.S. and allied government agencies, defense, intelligence, and energy markets. They offer specialized services, including nuclear power operations, environmental remediation, digital transformation, and critical infrastructure support, and operate in ~80 countries.
6. FTAI Aviation Ltd. (NASDAQ:FTAI)
Stock Upside Potential: 31.48%
Number of Hedge Fund Holders: 56
FTAI Aviation Ltd (NASDAQ:FTAI) is one of the best industrial stocks to buy in 2026. On March 24, Morgan Stanley reiterated an Overweight rating on FTAI Aviation Ltd and raised the price target to $293 from $266.
The price target hike comes amid expectations that the company is positioned for robust growth driven by its Aerospace Products segment. The investment bank expects the company’s market share to increase to 25% from 10%, given the underlying growth. In addition, the research firm has touted the company’s improving cost efficiencies, attributed to scaled manufacturing and increased PMA utilization.
Additionally, FTAI Aviation is poised for growth as its CFM56 module factory increasingly offers airlines a lower-cost MRO alternative. Earlier in the year, it signed a multi-year agreement with CFM International to provide repair and support services for CFM56 engines. The company’s power business plans to produce 100 CFM56 aero-derivative turbines annually and could generate $1 billion in adjusted EBITDA at scale.
FTAI Aviation Ltd. is a leading provider of aviation leasing and maintenance services, specializing in CFM56 and V2500 engine aftermarket support. The company operates a “Module Factory” to repair and overhaul engines, and also leases aircraft and engines. Recently, it has expanded into powering AI data centers by converting used jet engines through its FTAI Power subsidiary.
5. Redwire Corporation (NYSE:RDW)
Stock Upside Potential: 32.22%
Number of Hedge Fund Holders: 28
Redwire Corporation (NYSE:RDW) is one of the best industrial stocks to buy in 2026. On April 14, Redwire Corporation confirmed that it secured a purchase order valued at over $20 million in the first quarter. The order aligns with the company’s offering of services and systems to support the Navy and Marine Corps Small Tactical Unmanned Aircraft Systems Program Office.
Part of the contract entails the acquisition of the company’s Advanced Navigation version of the Stalker Block 30 unscrewed aerial system. The system is to join 250 existing Stalkers already deployed by the Marine Corps.
The system comes with air vehicles, ISR camera payloads, ground control stations, and associated support kits. The transition to Advanced Navigation configuration will ensure the US Marine Corps stays on the cutting edge of technology on an evolving modern battlefield.
Earlier in the month, Redwire Corporation expanded its UK presence by opening an office to support current and future programs for the UK Ministry of Defense. Backed by a local team, the company will be well-positioned to provide greater real-time support, rapid integration services, and localized lifecycle management for MOD initiatives.
Redwire Corporation is a space infrastructure and technology company that designs, manufactures, and supplies critical components, systems, and software for the spaceflight, satellite, and defense industries. Formed by consolidating several space firms, Redwire serves government agencies (like NASA and the Department of Defense), international space agencies, and commercial satellite operators.
4. QXO Inc. (NYSE:QXO)
Stock Upside Potential: 34.70%
Number of Hedge Fund Holders: 63
QXO Inc (NYSE:QXO) is one of the best industrial stocks to buy in 2026. On April 20, KeyBanc reiterated an Overweight rating on QXO Inc and raised the price target to $32 from $30.The price target hike is in response to the company reaching a $17 billion deal to acquire TopBuild.
The acquisition is poised to strengthen QXO’s prospects as the second-largest building products distributor in North America with more than $18 billion in combined company revenue. In addition, it will give the company scale in the insulation sector and expand its exposure to large, complex projects like data centers, where scale matters.
QXO has turned to acquisitions as part of its growth strategy. Last year, it completed an $11 billion acquisition of Beacon Roofing Supply. The company also tabled a bid for GMS and threatened a hostile takeover. KeyBanc raised its price target for the stock, impressed by the accelerated merger-and-acquisition activity that supports a higher earnings-growth trajectory.
QXO Inc. is a North American distributor of building products, specializing in roofing, waterproofing, and complementary materials. The company focuses on accelerating growth through technology, acquisitions, and scaling to become a leader in the $800 billion building products distribution market.
3. United Airlines Holdings, Inc. (NASDAQ:UAL)
Stock Upside Potential: 36.04%
Number of Hedge Fund Holders: 79
United Airlines Holdings Inc. (NASDAQ:UAL) is one of the best industrial stocks to buy in 2026. On April 14, United Airlines Holdings Inc. popped in the market amid reports that the company was considering a merger with American Airlines.
Reuters reports that United Airlines’ Scott Kirby has already pitched a potential merger of the two carriers to US President Donald Trump. A merger of the two would result in the largest-ever airline consolidation in more than a decade. The two airlines boast the largest fleets among US airlines, with more than 1,000 aircraft each.
In addition, the combined company would be in a better position to compete internationally, where foreign carriers control a majority of long-haul seat capacity to and from the US. Nevertheless, a merger of United Airlines and American Airlines won’t be easy. The deal is expected to face steep regulatory hurdles amid competition concerns, higher fares, and potential job losses. There are also concerns over route overlap in a concentrated US airline market.
United Airlines Holdings, Inc. is a major American airline holding company that operates United Airlines and provides global passenger and cargo air transportation. As one of the world’s largest carriers, it manages a vast global network, transporting passengers and cargo across six continents.
2. Alaska Air Group, Inc. (NYSE:ALK)
Stock Upside Potential: 38.06%
Number of Hedge Fund Holders: 45
Alaska Air Group Inc. (NYSE:ALK) is one of the best industrial stocks to buy in 2026. On April 20, Alaska Air Group Inc. suspended its 2026 financial guidance in response to the war in Iran triggering unpredictable changes in oil prices.
The airline expects oil prices to average $4.75 a gallon in April and $4.50 in the second quarter, which is expected to result in an additional $600 million in expenses. Higher energy prices will also result in a $3.60 headwind to earnings per share.
The warning came on the heels of the company delivering a wider-than-expected loss of $193 million, or $1.69 a share, compared to a loss of $166 million a year earlier. Revenue, on the other hand, was up 1% to $3.3 billion compared to $3.14 billion a year earlier, as premium demand continued to outperform. The first-quarter results were impacted by higher fuel prices and demand disruptions caused by rainstorms in Hawaii and civil unrest in Puerto Vallarta.
Alaska Air Group, Inc. is a major airline holding company parent to Alaska Airlines, Hawaiian Airlines, and Horizon Air that operates over 1,400 daily flights to more than 140 destinations across North America, Central America, Asia, and the Pacific. It provides passenger and cargo air transportation, focusing on West Coast connectivity and premium leisure travel.
1. Axon Enterprise, Inc. (NASDAQ:AXON)
Stock Upside Potential: 74.45%
Number of Hedge Fund Holders: 68
Axon Enterprise, Inc. (NASDAQ:AXON) is one of the best industrial stocks to buy in 2026. On April 15, TD Cowen reiterated its Buy rating on Axon Enterprise, Inc. and set a $825 price target. The positive stance comes amid expectations that the company is poised to deliver strong revenue growth, topping the 30% estimate.
The research firm is optimistic about the company’s growth metrics and believes the current guidance is conservative. The optimism stems from City Council checks showing strong adoption of the company’s new products. According to the research firm, there is significant uptake of AI, ALPR, Drones, and Fusus.
While Axon Enterprises has delivered 33% revenue growth over the past 12 months, TD Cowen sees the company as the best idea in the sector. That’s in part because of the highly durable end market, high-growth profile, and AI product growth.
RBC Capital analyst David Paige shares similar sentiments, reiterating an outperform rating on Axon Enterprises. According to the analyst, the company is well-positioned to achieve $6 billion in revenue and 28% EBITDA margins by fiscal 2028.
Axon Enterprise, Inc. develops technology and weapons for law enforcement, military, and commercial security, aiming to reduce gun-related deaths through non-lethal solutions. Their ecosystem includes TASER energy weapons, body-worn cameras drones, and the Evidence.com cloud platform.
READ NEXT: 10 Stocks Positioned for Breakout Growth and Top 30 S&P 500 Stocks by Index Weight.
