Top Investors’ Stock Portfolio: 10 Mid-cap Stocks To Buy

In this article, we will take a look at 10 mid-cap stocks to buy according to top investors.

The Fed’s change from higher interest rates to rate cuts has caused what Amy Y. Zhang, portfolio manager of the Alger Mid Cap 40 ETF, refers to as a “headwind to tailwind” shift in mid-cap companies. In a January 23 piece for ETF Trends, the manager argues that the rate backdrop is more important than just valuation estimates. Lower borrowing costs may also reinvigorate M&A activity in 2026, with mid-cap companies positioned in what Zhang refers to as the “sweet spot.”

This sentiment would prove interesting in the current market, especially in light of President Trump’s appointment of Kevin Warsh to take over the Fed on January 30, which boosted the US dollar and alleviated worries about the central bank’s independence. Notably, the Fed’s choice to leave interest rates untouched on January 28 suggests that investors will not be worried about their cash yields falling.

Nonetheless, Zhang said that years of investor favor for a “barbell” approach, which pairs large-cap companies with small-cap forecasts while ignoring the middle, is reflected in the broader mid-cap potential. This trend has resulted in mid-cap equities trading at a historically wide discount of 28%.

Our Methodology

For this list, we started by screening for companies with a market capitalization between $2 billion and $10 billion. These equities were further narrowed down based on their popularity among elite hedge funds, as of Q3 2025.

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. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).

10. Western Alliance Bancorporation (NYSE:WAL)

Market Capitalization: $9.81 billion

Number of Hedge Fund Holders: 35

Western Alliance Bancorporation (NYSE:WAL) ranks among the mid-cap stocks to buy according to top investors. While retaining a Buy rating on Western Alliance Bancorporation (NYSE:WAL), DA Davidson increased its price target for the company’s shares from $104 to $105 on January 29. The revision comes after Western Alliance’s quarterly results, which, according to DA Davidson, slightly exceeded projections on a pretax basis. A lower tax rate for the quarter backed an improved after-tax beat.

The company raked in an EPS of $2.59, which was greater than the expected $2.39, resulting in an 8.37% surprise. Revenue also topped projections, reaching $980.9 million vs the estimated $913.4 million.

DA Davidson regarded Western Alliance’s initial 2026 projection to be in favor of its above-average EPS estimate, citing robust top-line revenue growth and strong year-over-year operating leverage. The firm also emphasized Western Alliance’s efforts to reduce non-performing asset (NPA) levels during the initial half of the year, which it expects would be favorably accepted by investors.

Western Alliance Bancorporation (NYSE:WAL) is a bank holding company for Western Alliance Bank, offering a range of banking services for businesses and individuals.