In this article, we will look at the Top 10 Cheap Stocks With Strong Buy Ratings on Wall Street.
On June 1, Tom Lee, Fundstrat managing partner and head of research, and Fundstrat Capital CIO, appeared on CNBC’s ‘Squawk Box’ to talk about the latest market trends, the market outlook, and more.
June is when he expects market breadth to improve, and acknowledged that while it has indeed been a tough market, he was expecting 2026 to be a year where turbulence could happen. However, Lee believes that there are still some powerful tailwinds for America, with the AI story being one of them.
READ ALSO: 9 Best Inexpensive Stocks to Invest In Right Now AND 10 Best Stocks to Buy Now for Long Term Growth.
He added that we are now learning about energy independence; America can deal with higher oil prices because there is not going to be a shortage of it. Additional tailwinds are coming as well, as AI moves downstream are really benefiting American businesses. He thinks this is why S&P earnings came $10 higher in just the first quarter. That is $40 a year, and if you just put a 20 multiple, that adds 800 points to the S&P. He thus thinks that there is a lot of grounding for why stocks are able to recover.
With these broader market trends in view, let’s look at the top cheap stocks with Strong Buy ratings on Wall Street.
Our Methodology
We used the Finviz stock screener to identify the best stocks with a forward P/E below 15 and analyst consensus Strong Buy ratings. We then selected the top 10 stocks most popular among hedge funds as of Q1 2026, using the hedge fund sentiment data from Insider Monkey’s database. The stocks are arranged in ascending order of hedge fund sentiment.
Note: All data was recorded on June 3.
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. Insider Monkey’s quarterly newsletter strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
Top 10 Cheap Stocks With Strong Buy Ratings on Wall Street
10. NetEase, Inc. (NASDAQ:NTES)
Number of Hedge Fund Holders: 23
NetEase, Inc. (NASDAQ:NTES) is one of the top cheap stocks with Strong Buy ratings on Wall Street. Morgan Stanley lifted the price target on NetEase, Inc. (NASDAQ:NTES) to $158 from $154 on May 26 and maintained an Overweight rating on the shares. The firm stated that its revenue estimates are staying “largely unchanged”, but it is increasing its net profit estimates over 2026-28, incorporating the stronger gross profit margin in Q1 and better operating expense management.
The rating update came after NetEase, Inc. (NASDAQ:NTES) announced unaudited results for fiscal Q1 2026, reporting that net revenues were RMB30.6 billion (US$4.4 billion), reflecting a growth of 6.1% compared with the same quarter of 2025. Games and related value-added services net revenues came up to RMB25.7 billion (US$3.7 billion), up 6.9% compared to the prior year period. Management further reported that gross profit for the quarter was RMB21.2 billion (US$3.1 billion), up 14.8% compared to the prior year period, while total operating expenses were RMB8.6 billion (US$1.2 billion), up 6.5% compared with the same quarter of 2025.
NetEase, Inc. (NASDAQ:NTES) is an internet technology company that provides premium online services related to community, content, communication, and commerce. The company\s operations are divided into the following business segments: Online Game Services, Youdao, Cloud Music, and Innovative Businesses and Others.
9. Royal Bank of Canada (NYSE:RY)
Number of Hedge Fund Holders: 32
Royal Bank of Canada (NYSE:RY) is one of the top cheap stocks with Strong Buy ratings on Wall Street. Scotiabank lifted the price target on Royal Bank of Canada (NYSE:RY) to C$275 from C$252 on June 1 and maintained an Outperform rating on the shares. The company also received a rating update from Barclays on May 29. The firm lifted the price target on Royal Bank of Canada (NYSE:RY) to C$260 from C$245 and maintained an Overweight rating on the shares. The rating updates came after the bank reported financial results for fiscal Q1 2026 on May 28.
In its financial results for the quarter ended April 30, 2026, the company reported net income of $5.5 billion, up $1,119 million or 25% from the previous year. Diluted EPS rose 27% over the same period to $3.85, highlighting growth across each of Royal Bank of Canada’s (NYSE:RY) business segments. Adjusted net income and adjusted diluted EPS for the quarter were $5.6 billion and $3.90, up 23% and 25%, respectively, from the prior year.
Royal Bank of Canada (NYSE:RY) provides banking and financial services. The company’s operations are divided into the following segments: Personal and Commercial Banking, Wealth Management, Insurance, Capital Markets, and Corporate Support.
8. The Toronto-Dominion Bank (NYSE:TD)
Number of Hedge Fund Holders: 33
The Toronto-Dominion Bank (NYSE:TD) is one of the top cheap stocks with Strong Buy ratings on Wall Street. RBC Capital lifted the price target on The Toronto-Dominion Bank (NYSE:TD) to C$156 from C$138 on June 1 and maintained an Outperform rating on the shares.
The company also received a rating update from Jefferies on May 28, with the firm raising the price target on The Toronto-Dominion Bank (NYSE:TD) to C$151 from C$142 and maintaining a Hold rating on the shares. The firm stated that fiscal Q2 exhibited the company’s breadth, with solid contributions across the board, adding that further better-than-forecast capital markets results highlight that The Toronto-Dominion Bank (NYSE:TD) has enhanced that platform. It also noted that credit performance in the U.S. was compelling and management is confident that lending in the region should begin to pick up.
For reference, in its financial results for the quarter ended April 30, 2026, The Toronto-Dominion Bank (NYSE:TD) announced that reported diluted earnings per share were $2.43, compared with $6.27 in the prior year period, while adjusted diluted earnings per share were $2.38, compared to $1.97 in fiscal Q2 2025.
The Toronto-Dominion Bank (NYSE:TD) provides financial products and services. Its operations are divided into the following segments: Canadian Personal and Commercial Banking, U.S. Retail, Wealth Management and Insurance, Wholesale Banking, and Corporate segment.
7. Devon Energy Corporation (NYSE:DVN)
Number of Hedge Fund Holders: 58
Devon Energy Corporation (NYSE:DVN) is one of the top cheap stocks with Strong Buy ratings on Wall Street. Truist lifted the price target on Devon Energy Corporation (NYSE:DVN) to $66 from $63 on June 1, maintaining a Buy rating on the shares. The firm cited the Reuters report that suggested that the company received an $8 billion offer for its Marcellus asset. It further told investors in a research note that expectations had increased for a divestiture to materialize rather quickly post-merger close, given a hot ABS market and a generally supportive asset market.
Devon Energy Corporation (NYSE:DVN) also received a rating update from Mizuho on May 27, with the firm adjusting the price target on the stock to $68 from $62 while maintaining an Outperform rating on the shares. The firm anticipates the effects of the Iran crisis on global oil prices and refining cracks to be prolonged. It raised its 2026 and 2027 oil price outlook by 25% and 6%, respectively, while also lifting its forecast for U.S. refining cracks by 61% and 51%.
Devon Energy Corporation (NYSE:DVN) is involved in the development, exploration, and production of oil and natural gas properties. The company develops and operates the Delaware Basin, Eagle Ford, Heavy Oil, Barnett Shale, STACK, and the Rockies Oil.
6. Delta Air Lines, Inc. (NYSE:DAL)
Number of Hedge Fund Holders: 68
Delta Air Lines, Inc. (NYSE:DAL) is one of the top cheap stocks with Strong Buy ratings on Wall Street. Morgan Stanley lifted the price target on Delta Air Lines, Inc. (NYSE:DAL) to $105 from $90 on June 1 and reaffirmed an Overweight rating on the shares.
In a separate development, Delta Air Lines, Inc. (NYSE:DAL) announced on May 13 the expansion of its trans-Atlantic schedule this fall, with the addition of special flights to Madrid and Munich for two major international professional football games taking place in November. The airline stated that it will operate four additional round-trip flights between Europe and the United States, offering increased flexibility and options for customers during a peak travel period driven by strong demand.
Delta Air Lines, Inc. (NYSE:DAL) will add two additional nonstop flights to Madrid (MAD) from Atlanta, operating Nov. 4 and Nov. 5, with return service on Nov. 9. From Detroit, the airline will introduce two additional nonstop flights to Munich (MUC), both departing Nov. 11 and returning Nov. 16. All four flights will be operated on Delta’s Airbus A330 aircraft.
Delta Air Lines, Inc. (NYSE:DAL) provides scheduled air transportation for passengers and cargo. It operates through the Airline and Refinery segments.
While we acknowledge the potential of DAL 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 DAL and that has 100x upside potential, check out our report about the cheapest AI stock.
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