10 Stocks Analysts Are Upgrading Right Now

8. Cloudflare (NYSE:NET)

Market Cap: $111.94 billion

Average Upside Potential: 10%

Number of Hedge Fund Holders: 87

DZ Bank upgraded Cloudflare to Buy from Sell on Tuesday with a $300 price target. Cloudflare runs a global network that speeds up and protects websites and, increasingly, hosts the code behind AI applications. Revenue grew 39% to $782.5 million, its fastest pace in nearly four years, and Chief Executive Officer Matthew Prince called it the best quarter in the company’s history. The number of developers on its platform grew from 7 million to 10 million in a single quarter.

Management also expects to reach GAAP profitability in the fourth quarter, years earlier than it said at its investor day. Gross margin slipped to 72.4%, down from a year earlier, because building out the network adds cost before the sales arrive, and free cash flow came to 10% of revenue against 13% a year ago. Whether the free users filling that network will ever pay is the question behind our look at how Cloudflare makes money when most users pay nothing.

7. American Airlines (NASDAQ:AAL)

Market Cap: $9.27 billion

Average Upside Potential: 12%

Number of Hedge Fund Holders: 42

Rothschild & Co Redburn analyst Gavin Tennant upgraded American Airlines to Buy from Neutral on Tuesday with a $17.50 price target, writing, “We have found it increasingly difficult to justify a Neutral rating on American.” He points to an improved network, investment in its hubs, a richer mix of premium seats, disciplined capacity, and room for margins and free cash flow to grow in later years, with fares expected to stay elevated through 2027.

American’s operations center on hubs such as Dallas Fort Worth, where it has been investing. Total unit revenue, which is what the airline earns per seat mile flown, rose 14.5% across every cabin and geography, and revenue from managed corporate accounts rose 28%. Higher fuel prices tied to the Iran war added $1.9 billion to third-quarter operating expenses, which is why the shares have lagged this year. Management says it is on pace for nearly $1 billion in annual savings by year-end to help offset that. We recently looked at how much work American’s premium push is doing for the rest of the plane.

6. Ross Stores (NASDAQ:ROST)

Market Cap: $76.35 billion

Average Upside Potential: 15%

Number of Hedge Fund Holders: 71

Cantor Fitzgerald analyst John Kernan initiated coverage of Ross Stores at Overweight on Tuesday with a $276 price target. He expects comparable-store sales and earnings per share to come in above consensus in the coming quarters, and argues the company is taking share in off-price retail, with room for roughly 1,220 more Ross and dd’s stores based on how many people each store serves in the best-penetrated states.

Ross sells brand-name clothing and home goods at discounts through those two chains across the United States. In the second quarter its comparable sales rose 10%, but earnings of $2.66 a share included $0.60 from tariff refunds, so the underlying beat was smaller than the headline suggests. Management guided comparable sales growth to slow in the second half, and it plans to keep opening stores this year while buying back shares. UBS upgraded the stock in late October, so Cantor is joining a bullish crowd rather than leading it. The next report is due on Nov. 19. Our earlier piece asked whether Ross’s blowout comp growth signals a bigger market share opportunity.

5. British American Tobacco (NYSE:BTI)

Market Cap: $129.80 billion

Average Upside Potential: 17%

Number of Hedge Fund Holders: 41

JPMorgan analyst Edward Hockin reinstated coverage of British American Tobacco at Overweight on Tuesday, after the firm previously rated it Neutral, with a price target of 5,300 pence on the London shares. JPMorgan calls the company an earnings-per-share compounder and argues that share gains in nicotine pouches and U.S. vapes can bring sales growth back to 3% to 5% at constant currency.

British American, which sells Lucky Strike and Newport cigarettes alongside Vuse vapes, says the U.S. volume share of its Velo pouch brand rose from 4.4% in January 2024 to more than 30%. Management guides to adjusted earnings per share growth of 5% to 8% over the next several years and has planned £1.3 billion of share buybacks for 2026. The company expects global volumes of combustible products to fall about 2.5% a year through 2030, with price increases and a richer mix keeping revenue growing. Management wants smokeless products to make up most of the business by 2035. Readers weighing the payout can find our look at whether its business can sustain a 6% dividend.