In this article, we will look at the Top 10 High Conviction Stocks to Buy According to Hedge Funds.
On June 17, Jeffrey Gundlach, DoubleLine Capital, appeared on CNBC’s ‘Closing Bell’ to talk about the Federal Reserve’s decision to leave the Federal Funds Rate unchanged.
He stated that there is a lot to digest here, as the Fed chair opened up by saying that he is committed to moving the Fed forward, and then laid out what that meant with the five “consultant task forces”, which is what he prefers to call them. Gundlach believes that the Fed chair is buying himself some time, but the real phrase of the day, according to him, is “we will deliver price stability”.
READ ALSO: 15 Best NASDAQ Stocks to Buy and Hold For 3 Years AND 12 Best NYSE Stocks to Buy for Long-Term Investment.
Gundlach further stated that one thing might be in the Fed chair’s favor, since he is buying himself time and talking about the task forces that might start working in the next several weeks and maybe get around to having some ideas, conclusions, or suggestions somewhere in the fall. That, to him, suggests that it is unlikely that rates will be changed until the fall. He also said that the good news is that, according to his model, inflation would be dropping along the way as we move towards the end of the year.
With these broader market trends in view, let’s look at the top high conviction stocks to buy according to hedge funds.
Our Methodology
We used stock screeners and online sources to identify the best fundamentally strong companies with an analyst upside potential of at least 30%. 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 16.
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 High Conviction Stocks to Buy According to Hedge Funds
10. Accenture plc (NYSE:ACN)
Number of Hedge Fund Holders: 64
Accenture plc (NYSE:ACN) is one of the top high-conviction stocks to buy according to hedge funds. JPMorgan cut the price target on Accenture plc (NYSE:ACN) to $201 from $247 on June 8 and reiterated an Overweight rating on the shares. The rating update came as part of a fiscal Q3 report preview, with the firm trimming the company’s estimates to be closer to the midpoint of its guidance.
Accenture plc (NYSE:ACN) also received a rating update from Berenberg on June 17, with the firm cutting the price target on the stock to $220 from $273 while maintaining a Buy rating on the shares. Berenberg stated that the IT services sector has underperformed the market with structural AI concerns driving an “indiscriminate de-rating.” The firm stated that it sees “limited scope” for a near-term sector re-rating, but added that it views Accenture plc (NYSE:ACN) as best positioned to monetize emerging AI value pools.
Accenture plc (NYSE:ACN) is a global professional services company that combines technology and leadership in data, cloud, and AI with functional expertise, industry experience, and global delivery capability. The company’s services include Strategy & Consulting, Technology, Operations, Industry X, and Song, and its operations are divided into the following geographical segments: North America, EMEA, and Growth Markets.
9. PDD Holdings Inc. (NASDAQ:PDD)
Number of Hedge Fund Holders: 66
PDD Holdings Inc. (NASDAQ:PDD) is one of the top high-conviction stocks to buy according to hedge funds. BofA cut the price target on PDD Holdings Inc. (NASDAQ:PDD) to $113 from $140 on June 15 and maintained a Neutral rating on the shares. The firm told investors that it lowered its 2026-27 revenue forecasts by 6% and adjusted its net profit view by 21%-22% to take into account the increased ecosystem investments, which include commission rebates, merchant traffic support, and platform-funded coupons booked as contra revenue.
PDD Holdings Inc. (NASDAQ:PDD) also received a rating update from Barclays on May 28. The firm downgraded the stock to Equal Weight from Overweight, bringing the price target on the stock down to $89 from $165. The firm told investors in a research note that PDD Holdings Inc. (NASDAQ:PDD) reported its lowest non-GAAP net margin in five years in fiscal Q1. Barclays believes that the company’s China revenue deceleration is likely to continue as its monetization faces headwinds, and added that PDD Holdings Inc. (NASDAQ:PDD) is entering the private label market, which could cause “friction” with merchants.
PDD Holdings Inc. (NASDAQ:PDD) is a Chinese multinational online commerce group and retailer that owns and operates a range of diverse businesses. It also has a strong logistics, sourcing, and fulfillment capabilities network that supports its operations. The company owns Pinduoduo, a popular online commerce platform in China, and also runs the fast-growing e-commerce marketplace Temu.
8. T-Mobile US, Inc. (NASDAQ:TMUS)
Number of Hedge Fund Holders: 85
T-Mobile US, Inc. (NASDAQ:TMUS) is one of the top high-conviction stocks to buy according to hedge funds. Reuters reported on June 4 that, according to a statement from an Indian state government, T-Mobile US, Inc. (NASDAQ:TMUS) has plans to employ nearly 1,000 people by 2027 following the recent opening of its global capability center (GCC) in India. Reuters also provided additional details, stating that the tech center was inaugurated in Hyderabad, where the company leased 250,000 square feet of space, according to the state’s IT ministry. Its employees at the GCC will build advanced capabilities across software engineering, product development, DevOps, cybersecurity, and data analytics, among others.
In a separate development, T-Mobile US, Inc. (NASDAQ:TMUS) announced on May 28 a multi-year partnership with the United States Golf Association (USGA), making the company the Official 5G Network Partner of the U.S. Women’s Open, U.S. Open, and additional USGA championships. Management stated that through the partnership, T-Mobile US, Inc. (NASDAQ:TMUS) is delivering the USGA’s first-ever mobile Rules Review, critical event connectivity, and exclusive member experiences.
T-Mobile US, Inc. (NASDAQ:TMUS) provides wireless communications services under the T-Mobile and MetroPCS brands. The company offers prepaid and postpaid wireless messaging, voice, and data services, along with wholesale wireless services.
7. Intuitive Surgical, Inc. (NASDAQ:ISRG)
Number of Hedge Fund Holders: 103
Intuitive Surgical, Inc. (NASDAQ:ISRG) is one of the top high-conviction stocks to buy according to hedge funds. Deutsche Bank cut the price target on Intuitive Surgical, Inc. (NASDAQ:ISRG) to $366 from $440 on June 2 while maintaining a Sell rating on the shares. The stock also received a rating update from BofA on May 12, with the firm cutting the price target on the stock to $515 from $520 and reiterating a Buy rating on the shares.
For additional reference, in its financial results for fiscal Q1, Intuitive Surgical, Inc. (NASDAQ:ISRG) reported that worldwide procedures for da Vinci and Ion combined grew around 17% compared to fiscal Q1 2025, with Da Vinci procedures growing approximately 16%, and Ion procedures growing approximately 39%. Revenue for the quarter came up to $2.77 billion, up 23% compared to $2.25 billion in the prior year period. The company also reported that it placed 431 da Vinci surgical systems, compared with 367 in fiscal Q1 2025.
Intuitive Surgical, Inc. (NASDAQ:ISRG) has an elaborate ecosystem of services and products that provide robotic-assisted surgical solutions and invasive care. Its products include the Ion Endoluminal and the Da Vinci Surgical systems.
6. Danaher Corporation (NYSE:DHR)
Number of Hedge Fund Holders: 110
Danaher Corporation (NYSE:DHR) is one of the top high-conviction stocks to buy according to hedge funds. HSBC cut the price target on Danaher Corporation (NYSE:DHR) to $230 from $270 on June 3 and maintained a Buy rating on the shares. The firm told investors in a research note that market expectations on life science tools “remain bearish”, with allocation tilted towards managed care and therapeutics within healthcare. It added that although the tools sector is priced for disappointment, the firm sees “green shoots of recovery,” notably in bioprocessing and quality assurance. HSBC adjusted target prices to reflect risk-adjusted return expectations, and the firm’s preferred ideas are Waters, IQVIA, and Sartorius.
In a separate development, Wolfe Research downgraded Danaher Corporation (NYSE:DHR) to Peer Perform from Outperform on June 1 without assigning a price target after assuming coverage of the name. It stated that growth forward and backward is similar, and Thermo Fisher is “a little cheaper on P/E”. It added that the Masimo (MASI) transaction “confused us about DHR’s identity.”
Danaher Corporation (NYSE:DHR) designs, manufactures, and markets professional, medical, industrial, and commercial products and services, making it a significant diagnostics stock. It operates through Diagnostics, Biotechnology, Life Sciences, and Environmental and Applied Solutions.
While we acknowledge the potential of DHR 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 DHR and that has 100x upside potential, check out our report about the cheapest AI stock.
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