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 (NYSE:HEI) 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 (NYSE:HEI) 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. (NYSE:AMTM) 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 (NYSE:AMTM) 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.
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