Mid-cap stocks are demonstrating strong momentum and notable market resilience after lagging large-cap stocks in recent years. A fundamental change is in play as the S&P 400, which tracks mid-sized US companies, is up about 14% for the year, outperforming the broader index, which is up about 9%.
The outperformance has come amid robust earnings growth, which has strengthened investor confidence. Additionally, mid-cap stocks stand out because of their established business models and expansive market opportunities.
According to Oppenheimer’s 2026 market outlook, high-quality mid-cap stocks “have less debt and are less burdened by higher borrowing costs” and can “better navigate tariffs by passing through price increases or shifting supply chains.”
Goldman Sachs, in its 2026 outlook, reiterated that deal-making will be one of the catalysts driving small- and mid-cap stocks. The investment bank expects private equity activity and strategic corporate acquisitions to accelerate, with mid-cap stocks as the primary hunting ground due to compressed valuations and a permissive regulatory environment.
While large-cap stocks have dominated the investment landscape over the past 10 years, it’s becoming increasingly clear that it’s time to broaden bets to other parts of the capitalization spectrum. High-quality mid-cap stocks are increasingly providing compelling investment opportunities on the risk-reward front.
Against this backdrop, lets take a look at some mid-cap stocks to own for decades according to hedge funds.
Our Methodology
To create the list of the 10 Best Mid Cap Stocks to Buy According to Hedge Funds, we used the Finviz and Yahoo Stock Screener to identify a broad selection of US-listed mid cap companies. We defined a midcap company as one with a market capitalization between $2 billion and $10 billion. Next, we settled on mid-cap stocks with upside potential of more than 30% and are popular among elite hedge funds. The list is presented in ascending order of their hedge fund holdings.
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. Insider Monkey’s quarterly newsletter’s 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 Mid Cap Stocks to Own for Decades According to Hedge Funds
10. VinFast Auto Ltd. (NASDAQ:VFS)
Market Capitalization: $7.23 Billion
Stock Upside Potential: 76.28%
Number of Hedge Fund Holders: 4
VinFast Auto Ltd (NASDAQ:VFS) is one of the top mid-cap stocks to own for the long term, according to hedge funds. On June 18, VinFast Auto Ltd (NASDAQ:VFS) confirmed the availability of its VF 8 electric SUV across the United States.
The base Eco trim will retail for $39,900, while the Plus trim will retail for $44,900. VinFast is targeting families that want a capable, quiet, and well-equipped electric SUV with the new model. The VF8 comes with a 116.1-inch wheelbase to compete equally in the D-SUV segment. In its cabin rear passengers can sit upright without negotiating legroom. It also comes with an intuitive head-up display that projects key information directly onto the windshield.
Earlier, on June 10, VinFast announced domestic deliveries of 19,503 electric vehicles in May. Year to date the company has delivered 97,961 EVs in Vietnam affirming its dominance in the domestic market even as it eyes growth on the international scene. The Limo Green and the VF 3 are the company’s two best-selling models in Vietnam, with cumulative deliveries of 24,059 and 20,231 vehicles, respectively.
VinFast Auto Ltd. (NASDAQ:VFS) is a global automotive manufacturer specializing in the research, development, and production of smart electric vehicles (EVs), including battery-electric cars, electric motorbikes/scooters, and e-bikes.
9. D-Wave Quantum Inc. (NYSE:QBTS)
Stock Upside Potential: 59.54%
Number of Hedge Fund Holders: 26
D-Wave Quantum Inc. (NYSE:QBTS) is one of the top mid-cap stocks to own for decades, according to hedge funds. On June 30, D-Wave Quantum Inc. (NYSE:QBTS) was selected to receive a $1.57 million grant from the US National Science Foundation.
The $1.57 million grant supports the company’s participation in ERASE, a project developing technologies for fault-tolerant quantum computing. The program brings together researchers and industry organizations to advance the dual-rail gate model for quantum computing hardware, software, and applications.
Under the terms of the agreement, D-Wave Quantum is to provide access to its dual-rail gate model quantum computing technology. Erase researchers can access D-Wave Quantum’s platform through selected development interfaces.
D-Wave Quantum has already confirmed a letter of intent for $100 million in proposed CHIPS and Science Act funding to develop annealing- and gate-model quantum computing systems. The project is poised to extend the company’s relationship with Yale University, which is also spearheading the ERASE program.
D-Wave Quantum Inc. (NYSE:QBTS) builds and delivers quantum computing systems, software, and cloud services designed to solve complex computational problems. It is the first commercial supplier of quantum computers and uses a dual-platform approach spanning both annealing and gate-model technologies.
8. Full Truck Alliance Co. Ltd. (NYSE:YMM)
Market Capitalization: $8.78 Billion
Stock Upside Potential: 50.99%
Number of Hedge Fund Holders: 33
Full Truck Alliance Co Ltd ADR (NYSE:YMM) is one of the top mid-cap stocks to own for the long term, according to hedge funds. On June 27, Citi touted Full Truck Alliance Co Ltd ADR (NYSE:YMM) as one of the beaten down Chinese internet stocks worth buying on the dip.
According to the research firm Full Truck Alliance, like other Chinese internet giants, has dropped significantly as investors pour money into artificial intelligence chipmakers. The research firm argues that the stocks are trading close to their cheapest valuations in years after a significant pullback. In contrast they continue to generate significant cash flows which affirm why they are buys on the dip.
Citi insists that the broader China internet sector is down by 24% year to date in the aftermath of investors turning their attention to artificial intelligence hardware winners. Citi insists that Full Truck Alliance Co. Ltd. holds large cash reserves and continues to buy back shares, moves expected to support the share price and boost shareholder returns.
Full Truck Alliance Co. Ltd. (NYSE:YMM) is a digital freight platform—often referred to as the “Uber for trucks”—that connects shippers with commercial truck drivers. Operating primarily in China, it matches supply and demand for road freight, optimizes routes, and provides tools to increase transportation efficiency and reduce empty hauling.
7. Westlake Corp (NYSE:WLK)
Market Capitalization: $9.33 Billion
Stock Upside Potential: 52.17%
Number of Hedge Fund Holders: 34
Westlake Corp (NYSE: WLK) has been one of the top mid-cap stocks to own for decades, according to hedge funds. On June 15, Westlake Corp (NYSE:WLK) strengthened its Performance & Essential Materials business by completing the acquisition of a polyvinyl chloride and vinyl chloride monomer production site located in Wilhelmshaven, Germany.
The company completed the acquisition through its German subsidiary Westlake Vinnolit GmbH & Co. KG. The acquired polyvinyl chloride and vinyl chloride monomer production site has the potential to produce 380,000 metric tons of PVC per year, thereby expanding Westlake’s global chlorovinyl manufacturing footprint.
The acquired production site’s competitive edge stems from its advantageous logistical infrastructure, which includes a deep-water dock that enables efficient raw material supply. Consequently, it is expected to strengthen the company’s chlorovinyl production facilities in Europe and North America.
Meanwhile, on July 1, Mizuho reiterated a Neutral rating on the stock but lowered its price target to $88 from $110. The price target cut comes on the research firm lowering price targets for most of its basic chemical targets as focus shifts to technology material stocks.
Westlake Corp (NYSE:WLK) is a global industrial company that manufactures basic petrochemicals, polymers, and building products. They produce the raw chemical building blocks used in everyday items, such as food packaging, medical devices (like IV bags), clean-water piping, and automotive components.
6. Oklo Inc. (NYSE:OKLO)
Market Capitalization: $9.13 Billion
Stock Upside Potential: 73.61%
Number of Hedge Fund Holders: 36
Oklo Inc. (NYSE:OKLO) is one of the top mid-cap stocks to own for decades, according to hedge funds. On July 1, Oklo Inc. (NYSE:OKLO) sentiments received a significant boost after the U.S. Department of Energy approved the Documented Safety Analysis for its Groves Isotope Test Reactor in Texas.
Approved under the DOE’s Reactor Pilot Program, it marks an important milestone in the facility’s final safety basis. It also comes on the heels of an earlier approval of the Preliminary Documented Safety Analysis. The two approvals pave the way for the Groves Isotope Test Reactor to move from the documentation phase and into the final pre-startup review.
Success in the startup review phase will pave the way for Oklo to receive and load nuclear fuel to conduct startup testing at the facility. The company is already targeting first criticality for Groves in July.
The Groves facility strengthens Oklo’s isotope business, which seeks to enable a strong domestic supply chain for critical isotopes. It also positions the company to be a key supplier of isotopes for scientific research, space exploration, and national security applications.
Oklo Inc. (NYSE:OKLO) is an advanced nuclear technology company developing next-generation, fast-fission power plants designed to provide clean, reliable, and affordable energy.
While we acknowledge the potential of OKLO 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 OKLO and that has 100x upside potential, check out our report about the cheapest AI stock.
5. Domino’s Pizza, Inc. (NASDAQ:DPZ)
Market Capitalization: $9.95 Billion
Stock Upside Potential: 36.94%
Number of Hedge Fund Holders: 45
Domino’s Pizza Inc. (NASDAQ:DPZ) is one of the top mid-cap stocks to own for decades, according to hedge funds. On June 23, BTIG analyst Peter Saleh reiterated a Buy rating on Domino’s Pizza Inc. (NASDAQ: DPZ) but lowered the price target to $425 from $450. Despite the cut the new price target represents significant upside as the stock is trading at about $304 a share.
The price target cut is in response to the company’s announcement of the imminent retirement of chief executive officer Russell Wiener. He steps down after significant success during the four years at the helm, including turning around the company’s US business. Weiner is to take over as the executive Chairman on October 1.
Domino’s Pizza has already named Chief Operating Officer Joe Jordan as Russell’s successor. Jordan was selected because of his extensive experience with the company, which will be crucial in the uncertain economic environment characterized by tight consumer spending.
Domino’s Pizza, Inc. (NASDAQ:DPZ) operates as a multinational restaurant chain and franchise company. It primarily makes, sells, and delivers pizzas, pasta, wings, and side dishes. The company functions as both a franchisor (licensing the brand to independent owners) and an operator, while running central supply chain facilities that distribute ingredients to its stores.
4. Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS)
Market Capitalization: $9.95 Billion
Stock Upside Potential: 88.73%
Number of Hedge Fund Holders: 46
Kratos Defense & Security Solutions Inc. (NASDAQ: KTOS) is one of the top mid-cap stocks to own for decades, according to hedge funds. On July 1, Wedbush initiated coverage of Kratos Defense & Security Solutions Inc. (NASDAQ: KTOS) with an Outperform rating and an $85 price target.
The positive stance underscores the research firm’s confidence in the company’s prospects as a merchant arms supplier to the US defense complex. The company sells critical subsystems, engines, hypersonic vehicles and ground software to prime and new entrant players. While the market views Kratos as a drone company jostling for platform dominance, management has built a robust business across hypersonic missile defense space and microelectronics.
Kratos Defense & Security Solutions’ edge also stems from its decision to sell its solutions and products to every player in the defense sector rather than act as a prime contractor. The strategy is paying off as revenue has grown by 22% over the past 12 months.
Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) is an American technology company that develops and manufactures transformative, affordable systems for the U.S. Department of Defense, allied nations, and commercial enterprises. They specialize in hardware-software convergence, focusing on rapid development rather than traditional, lengthy military procurement cycles.
3. IAMGOLD Corporation (NYSE:IAG)
Market Capitalization: $9.13 Billion
Stock Upside Potential: 65.31%
Number of Hedge Fund Holders: 46
IAMGOLD Corporation (NYSE:IAG) is one of the top mid-cap stocks to own for decades, according to hedge funds. On June 18, IAMGOLD Corporation (NYSE:IAG) amended its secured revolving credit facility. It increased its total available commitments to $850 million from $650 million. It also extended the maturity date of the credit facility to June 17, 2030, from December 20, 2028.
The amended credit facility comes with an accordion feature of up to $250 million that allows IAMGOLD to further increase available liquidity, subject to lender approval. The much bigger credit facility will strengthen the company’s financial position while also lowering its cost of capital. In addition, it should provide meaningful flexibility as the mining giant advances its operating portfolio and pursues internal growth opportunities.
The strengthening of the financial position comes on the heels of IAMGOLD Corporation announcing 12% increase in mineral resources at its Côté Gold Mine in Ontario, Canada. The updated mineral resource now shows 20.3 million ounces of gold in measured and indicated categories.
IAMGOLD Corporation (NYSE:IAG) is a Canadian-based intermediate gold producer and developer with active mining operations and exploration projects across North America and West Africa. The company’s core activities focus on the exploration, development, and mining of gold.
2. Celsius Holdings Inc. (NASDAQ:CELH)
Market Capitalization: $8.15 Billion
Stock Upside Potential: 90.19%
Number of Hedge Fund Holders: 52
Celsius Holdings Inc. (NASDAQ:CELH) is one of the top mid-cap stocks to own for decades, according to hedge funds. On June 30, UBS reiterated a Buy rating on Celsius Holdings (NASDAQ:CELH) but lowered the price target to $50 from $55. Despite the cut, the new price target represents significant upside potential as the stock is trading at about $31 a share.
The price target cut comes on the research firm analyzing Core Celsius and Alani Nu brand trends through May and June. Its findings indicate that Traditional Fruit flavors were the only growing product line in the core Celsius portfolio. In contrast, Essentials continued to decline. In addition, Vibe products also slowed, with SKUs dropping by 17% in the four-week period ending June 13, compared to a 12% decline in May.
Meanwhile, the top 10 SKUs continue to offset the slowdown, with 6.2% growth over the last four weeks and 9% over the last 13 weeks. Additionally, Celsius Holdings is also progressing on SKU rationalization as it gains incremental shelf space.
Celsius Holdings Inc. (NASDAQ:CELH) is a global beverage company that develops, markets, and distributes functional, zero-sugar energy drinks. Positioned as a healthier alternative in the soft drink market, their products are formulated with clean-label ingredients, including green tea, guarana, ginger, and seven essential vitamins.
1. Chewy Inc. (NYSE:CHWY)
Market Capitalization: $8.43 Billion
Stock Upside Potential: 65.96%
Number of Hedge Fund Holders: 53
Chewy Inc. (NYSE:CHWY) is one of the top mid-cap stocks to own for decades, according to hedge funds. On June 30, BofA Securities reiterated a Buy rating on Chewy Inc. (NYSE:CHWY) and a $31 price target. Earlier on June 23, TD Cowen touted Chewy as the best mid cap idea for 2026 while reiterating a Buy rating and a $34 price target. The price target represent significant upside potential as the stock is trading at about $20 a share
The bullish stance comes on the heels of the company delivering solid first-quarter 2026 results, characterized by revenue and earnings growth, on June 10. The company continued to outperform the pet category while expanding profitability and free cash flow in the first quarter.
Net sales in the quarter were up 7.7% year over year to $3.36 billion, affirming strength in execution. Adjusted net income was up by $31 million to $179.9 million as adjusted diluted earnings per share increased by $0.08 to $0.43 a share.
Chewy Inc. achieved record profitability in the first quarter on the back of 200,000 net customer additions. According to Sumit Singh, Chief Executive Officer, the company is well positioned to gain market share and deliver profitable growth throughout the year. The focus is also on creating long term shareholder value.
Chewy Inc. (NYSE:CHWY) operates as a major e-commerce retailer that sells pet food, supplies, and healthcare products, primarily in the United States. The company combines the personalized service of a local pet store with the convenience of fast home delivery.
While we acknowledge the potential of CHWY 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 CHWY and that has 100x upside potential, check out our report about the cheapest AI stock.
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