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.
9. Watts Water Technologies, Inc. (NYSE:WTS)
Market Capitalization: $9.93 billion
Number of Hedge Fund Holders: 36
Watts Water Technologies, Inc. (NYSE:WTS) ranks among the mid-cap stocks to buy according to top investors. On January 21, KeyBanc raised Watts Water Technologies, Inc. (NYSE:WTS) from Sector Weight to Overweight, with a target price of $340. The revision follows KeyBanc’s evaluation of coverage through 2026 and discussions with Watts Waters executives in December.
KeyBanc says Watts Waters’ outlook for 2026 is “too compelling to ignore,” especially given the stock’s subdued response to positive revisions.
In addition, Watts Water Technologies, Inc. (NYSE:WTS) has made two major acquisitions. Watts bought Saudi Cast, a drainage solution producer, for $20 million, expanding its operations in Asia-Pacific, the Middle East, and Africa. The company also finalized the acquisition of Superior Boiler, an entity that specializes in customized steam and hot water boilers and generates around $60 million in annual revenue.
Watts Water Technologies, Inc. (NYSE:WTS) is an American company based in North Andover, Massachusetts. It provides products such as leak protection equipment, valves, rainwater harvesting solutions, and water filtration equipment.
8. Pool Corporation (NASDAQ:POOL)
Market Capitalization: $9.46 billion
Number of Hedge Fund Holders: 41
Pool Corporation (NASDAQ:POOL) ranks among the mid-cap stocks to buy according to top investors. On January 12, Baird raised Pool Corporation (NASDAQ:POOL)’s rating from Neutral to Outperform while raising the price target to $320 from $345. Baird observed that the majority of Pool Corp’s revenues are periodic, and there are encouraging indicators for discretionary spending in the pool market.
The firm expects Pool Corporation (NASDAQ:POOL) to stabilize this year, with the company poised to see gains through 2027 as the market recovers from a three-year recession. Baird suggested Pool Corporation (NASDAQ:POOL) to small and mid-cap quality investors seeking growth who have a two- to three-year holding plan.
Additionally, Stifel analyst W. Andrew Carter maintained a Hold rating on POOL on December 16 while lowering his price objective from $295 to $240. The firm stated that it had “a positive overall bias” for building products in 2026, including home improvement stores, as part of its forecast for the year.
Pool Corporation (NASDAQ:POOL), also known as POOLCORP, is the world’s largest wholesale distributor of swimming pool equipment, parts, supplies, and outdoor living products.
7. Applied Industrial Technologies, Inc. (NYSE:AIT)
Market Capitalization: $9.71 billion
Number of Hedge Fund Holders: 42
Applied Industrial Technologies, Inc. (NYSE:AIT) ranks among the mid-cap stocks to buy according to top investors. KeyBanc reduced its price target for Applied Industrial Technologies, Inc. (NYSE:AIT) to $300 from $310 on January 28, keeping an Overweight rating on the industrial equipment distributor. The drop came after what KeyBanc indicated as “mixed” fiscal second-quarter earnings and a lower EBITDA margin forecast from the company.
The company posted Q2 revenues of $1.16 billion, an 8.4% increase over the previous year, with organic growth adding 2.2%, acquisitions contributing 6%, and currency effects delivering a 0.2% boost. Meanwhile, net income totaled $95.3 million, with earnings per share of $2.51.
KeyBanc noted higher LIFO (Last-In-First-Out) expenses during the quarter alongside volatile December demand trends as the key issues driving market reaction towards the earnings announcement. The firm highlighted that buy-side expectations were likely high ahead of the quarterly results.
Applied Industrial Technologies, Inc. (NYSE:AIT) is a value-added distributor and technical solutions provider of industrial motion, fluid power, flow control, automation technologies, and related maintenance supplies.
6. Axsome Therapeutics Inc. (NASDAQ:AXSM)
Market Capitalization: $9.29 billion
Number of Hedge Fund Holders: 42
Axsome Therapeutics Inc. (NASDAQ:AXSM) ranks among the mid-cap stocks to buy according to top investors. On January 20, H.C. Wainwright boosted its price target for Axsome Therapeutics Inc. (NASDAQ:AXSM) to $260 from $200 and kept a Buy rating on the biopharma’s shares. The spike comes after Axsome Therapeutics Inc. (NASDAQ:AXSM) announced interim unaudited financial results for the fourth quarter of 2025, with total product revenue projected to be about $196 million.
Axsome Therapeutics Inc. (NASDAQ:AXSM) expects overall product revenue to be around $638.5 million in fiscal year 2025, an improvement of 66% over fiscal year 2024 and higher than H.C. Wainwright’s prediction of $628.3 million. The company’s primary product, AUVELITY, is projected to bring in net sales of about $155.1 million in Q4 and $507.1 million in the full year 2025, far exceeding the firm’s annual sales estimate of $397 million.
The company’s other products also performed well, with SUNOSI projected to clock in $36.7 million in Q4 revenue and $124.8 million for the year.
Axsome Therapeutics Inc. (NASDAQ:AXSM) is a biopharmaceutical company that develops and delivers novel therapies for the management of central nervous system/CNS disorders in the US.
5. Modine Manufacturing Company (NYSE:MOD)
Market Capitalization: $9.72 billion
Number of Hedge Fund Holders: 49
Modine Manufacturing Company (NYSE:MOD) ranks among the mid-cap stocks to buy according to top investors. On January 30, DA Davidson boosted Modine Manufacturing Company (NYSE:MOD)’s price target to $255 from $200, maintaining a Buy rating on the stock. The increase reflects Modine’s previously announced PT spinoff/RMT deal and a considerably enhanced data center revenue target for fiscal year 2028.
DA Davidson boosted its optimism on the stock, noting “considerable further rerate potential” as Modine Manufacturing Company (NYSE:MOD) transitions into a pure-play data center company over the coming few years. The firm stated that Modine’s price-to-order rate of conversion “appears impressively high,” with pricing premiums being unchanged across its business.
The same day, KeyBanc Capital Markets boosted Modine Manufacturing Company (NYSE:MOD)’s price objective to $205, noting the company’s plans to spin off its PT segment, describing the move as “a meaningful positive step in the transformation story.” Analyst David Tarantino stated that the spin-off would enable Modine to zero in on “higher growth/margin Climate opportunities, namely Data Center,” which has a better long-term growth trajectory.
Modine Manufacturing Company (NYSE:MOD) operates as a tester, designer, manufacturer, engineer, and seller of mission-critical thermal solutions. The company operates through two segments: Performance Technologies and Climate Solutions.
4. Jazz Pharmaceuticals plc (NASDAQ:JAZZ)
Market Capitalization: $9.96 billion
Number of Hedge Fund Holders: 49
Jazz Pharmaceuticals plc (NASDAQ:JAZZ) ranks among the mid-cap stocks to buy according to top investors. Truist Securities increased its price target for Jazz Pharmaceuticals plc (NASDAQ:JAZZ) to $230 from $220 on January 12, preserving a Buy rating on the company. The rise follows practice-changing results from the HERIZON-GEA trial, which Truist used to justify adjusting its Ziihera estimations higher.
In order to get a broad label for first-line gastroesophageal adenocarcinoma (GEA) as both doublet and triplet therapy with priority review, Jazz Pharmaceuticals plc (NASDAQ:JAZZ) executives intends to file a supplemental Biologics License Application (sBLA) in the initial half of 2026.
After clearance based on clinical data, Truist Securities anticipates strong commercial adoption, probable adoption in NCCN guidelines, over 90% prescriber crossover between GEA and biliary tract cancer (BTC), and compatibility of PD-1 inhibitor selection.
Jazz Pharmaceuticals plc (NASDAQ:JAZZ) is a biopharmaceutical company that develops treatments for serious illnesses. Its key products include Xywav, Xyrem, Epidiolex, Rylaze, Zepzelca, Defitelio, and Vyxeos.
3. HF Sinclair Corporation (NYSE:DINO)
Market Capitalization: $9.56 billion
Number of Hedge Fund Holders: 53
HF Sinclair Corporation (NYSE:DINO) ranks among the mid-cap stocks to buy according to top investors. On January 16, Piper Sandler decreased its price target for HF Sinclair Corporation (NYSE:DINO) to $67 from $68 while maintaining an Overweight rating on the company’s shares. The firm highlighted “messy” West Coast operations as the key reason for downside adjustments to its fourth-quarter 2025 predictions.
Piper Sandler reduced its fourth-quarter 2025 earnings per share projections to $0.44 from $0.96, while also lowering its EBITDA forecast to $358 million from $473 million.
Despite a difficult quarter, Piper Sandler sees these West Coast difficulties as “non-recurring” and is optimistic on HF Sinclair Corporation (NYSE:DINO) for 2026, citing possible benefits from wider crude price differentials, an improving West Coast market, and “underappreciated SRE potential.”
The same day, Scotiabank lowered its price target for HF Sinclair Corporation (NYSE:DINO) from $66 to $62. The change is a component of the company’s revised price forecasts for the large-cap E&P, refining, and American integrated oil equities that fall under its umbrella.
HF Sinclair Corporation (NYSE:DINO) is an independent petroleum refiner in the United States with operations throughout the mid-continent, southwestern, and Rocky Mountain regions.
2. Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH)
Market Capitalization: $9.46 billion
Number of Hedge Fund Holders: 58
Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) ranks among the mid-cap stocks to buy according to top investors. On January 21, UBS analyst Robin Farley affirmed a Neutral rating and $27 price target for Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH). The update follows Norwegian’s December 23 announcement that all non-commissionable rates would be eliminated beginning December 26, 2023, for cruises sailing May 1, 2026 or beyond.
This adjustment substantially raises the commission levels paid to travel brokers, which one cruise marketer said might cut Norwegian’s net return by 200-300 basis points for its particular business. UBS emphasizes that the commission hike wouldn’t be applicable to more than half of the 2026 inventory sold before the beginning of the calendar year, nor to cruises sailing before May 1.
According to the firm, the commission rise only applies to the Norwegian brand, which accounts for around 85% of NCLH’s fleet, and has no bearing on cruises offered directly to customers, which UBS says make up more than half of sales for several large-ship brands.
Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) is a global cruise company offering itineraries to over 700 destinations. It operates Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises.
1. Maplebear Inc. (NASDAQ:CART)
Market Capitalization: $9.76 billion
Number of Hedge Fund Holders: 60
Maplebear Inc. (NASDAQ:CART) ranks among the mid-cap stocks to buy according to top investors. Stifel reduced its price target for Maplebear Inc. (NASDAQ:CART) to $46 from $49 on January 27, maintaining a Buy rating on the company’s stock. The firm cited persistent marketplace competition as impacting the stock, though it contends these issues have already been reflected in current market forecasts.
Stifel’s forecasts for Maplebear Inc. (NASDAQ:CART) remain constant, with the company expected to lose around 2 percentage points of its market share in the fourth quarter of 2025.
The same day, Maplebear strengthened its partnership with Allegiance Retail Services, with the goal of improving technological solutions for more than 125 independently owned grocers in the Northeast. The expanded relationship involves the introduction of Maplebear’s AI-powered Caper Carts at certain Foodtown outlets in New York, New Jersey, and Pennsylvania, with more rollouts planned for 2026.
Maplebear Inc. (NASDAQ:CART), doing business as Instacart, provides online grocery shopping services to households in North America. Its service can be provided through the company’s mobile application or website.
While we acknowledge the potential of CART 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 CART and that has 100x upside potential, check out our report about this cheapest AI stock.
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