Wall Street had a rough week, and the damage came fast. Thursday’s sell-off erased $2.3 trillion in market value, pushed the Nasdaq into a correction and sent the VIX, the market’s fear gauge, up 70% to 28, Yahoo Finance reported on November 6. A chip-sector index that plunged 12% on Thursday bounced 4% the next day, and oil fell below $100 a barrel.
Politics added to the swings. The Dow roared back on Wednesday after the midterm results removed election uncertainty, and oil fell on hopes of a deal with Iran, according to Yahoo Finance on November 5, though the rally was already cooling.
Interest rates became the bigger worry. Payrolls rose by 165,000 in October, far above the 65,000 economists expected, while unemployment slipped to 4.1% from 4.2%, Reuters reported on November 6.
Hot Jobs Data Raises the Odds of a Rate Hike
Traders read the numbers as a sign the Federal Reserve is not done tightening. Bets on a rate hike at the next meeting rose to 78% from 70% before the report, and the 10-year Treasury yield climbed to 4.87%. The 30-year yield reached 5.27%.
Chief market economist Peter Cardillo said the labor market is at full employment and that the Fed has no choice but to raise rates in December. Chief investment strategist Susannah Streeter called the report hawkish and said she sees a couple of hikes before late next year, depending on the Iran conflict. Chief economic strategist Brian Jacobsen noted that wages rose 3.1% from a year earlier, yet real wages fell as inflation outpaced them, which he called the affordability crisis in one stat.
What Past Fear Spikes Have Meant for Stocks
Yahoo Finance’s Brian Sozzi pointed to CBOE data showing eight earlier VIX jumps of this size since 1991. The S&P 500 gained an average of 3.0% one month later and 14.7% one year later. Our list of oversold AI stocks where Wall Street analysts are spotting 50%+ upside covers names that have been through a similar reset.
Hiring itself looks steady. Andy Challenger, who tracks corporate job cuts, called the current climate a “low-fire environment,” with employers holding on to workers ahead of the holidays, according to Yahoo Finance on November 5.
Not everyone sees a hike as certain. Joe Saluzzi, co-head of equity trading at a New Jersey firm, called the jobs numbers very good but said the recent volatility could lead the Fed to hold off at its next meeting. Readers who follow the market’s leaders can see our ranking of the best stocks near all-time highs according to Wall Street.
Photo by Arturo Añez on Unsplash
Our Methodology
To compile this list, we reviewed news coverage and financial websites for analyst downgrades published over the past 20 days. From the stocks that came up, we picked 10 and ranked them in descending order of average upside potential, based on analysts’ average price target, as of November 6, 2026. We also list each stock’s number of hedge fund holders as of Q2 2026, from our database of 1,006 hedge funds.
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 612% since May 2014, beating its benchmark by 375 percentage points (see more details here).
Analysts Just Sounded the Alarm on These 10 Overhyped Stocks
10. Marvell Technology (NASDAQ:MRVL)
Average Upside Potential: 127%
Number of Hedge Fund Holders: 96
Bank of America downgraded Marvell Technology to Neutral from Buy on November 3, cutting its price target to $225 from $400. TD Cowen analyst Sean O’Loughlin also moved to Hold from Buy, with a $175 target, down from $350.
Both calls followed the Lumentum deal. Marvell chairman and CEO Matt Murphy called the move toward optical connectivity in AI data centers an opportunity that comes along once in a generation, and he backed the remark with a $115 billion all-stock transaction. Lumentum makes the lasers, transceivers and optical switches that move data between AI servers.
The pitch is one supplier for both halves of the network. Marvell already builds the electrical connections, switches and custom AI chips inside these systems, and the companies say adding optical parts lets engineers design both sides together. They put the combined market opportunity at $550 billion and expect more than $1 billion a year in cost savings. Closing is still more than a year away. For more on how Marvell fits into Google’s chip plans, see why Marvell may be fine even as Google’s next AI chip runs late.
9. Lumentum Holdings (NASDAQ:LITE)
Average Upside Potential: 104%
Number of Hedge Fund Holders: 111
B. Riley downgraded Lumentum to Neutral from Buy on November 3 and set a $770 price target, down from $1,142, after Marvell’s offer for the company. The offer was worth about $1,132 a share to Lumentum holders when announced.
The business behind it keeps growing. CEO Michael Hurlston told investors Lumentum landed its second major win in co-packaged and near-packaged optics, backed by purchase commitments of more than $5 billion. Those are orders customers have committed to before the parts ship, which gives the company a clear view of what it will sell.
Revenue rose 136.5% from a year earlier, led by pump lasers and optical circuit switches. The systems side of the business, which includes the switches, grew much faster than the components side. Hurlston expects about $350 million of added revenue in the fiscal second quarter, with profit margins widening again, and he sees optical switching growing into a multi-billion-dollar annual business. Marvell singled out Lumentum’s laser designs and indium phosphide manufacturing as key additions. You might also be interested in reading our piece on whether Lumentum’s valuation can hold up when it can’t meet demand.
8. Axon Enterprise (NASDAQ:AXON)
Average Upside Potential: 84%
Number of Hedge Fund Holders: 53
Craig Hallum downgraded Axon Enterprise to Hold from Buy on November 6 and set a $390 price target, a day after the company’s third-quarter report. The business underneath still shows strong recurring growth.
Axon told shareholders it is building a platform rather than a product line. Revenue grew 28% to $909 million, and the software and services side grew faster than the rest.
Annual recurring revenue reached $1.75 billion, up 40%, and customers kept spending more on what they already own. Revenue from Axon’s AI tools passed $100 million a year, and bookings for those tools keep climbing. Its Platform Solutions segment more than doubled, and its newer software products together reached a run rate of nearly $500 million.
Axon is also putting more money into drone maker Skydio and became its exclusive public safety distributor in the US and Canada. It made its Axon Guardian safety tool generally available, too, and its new Body 5 camera has 25 times the processing power of the prior generation. The financing behind that expansion is the subject of our look at what Axon’s $1 billion of zero-coupon notes really cost.
7. Cisco Systems (NASDAQ:CSCO)
Average Upside Potential: 44%
Number of Hedge Fund Holders: 101
Morgan Stanley analyst Meta Marshall downgraded Cisco to Equal-weight from Overweight on November 5 and cut her price target to $120 from $135. She pointed to the stock’s strong run, though she still expects several years of double-digit growth.
Cisco has a ready answer when people ask whether it is a real AI company: $9.3 billion of AI infrastructure orders from the largest cloud customers during its last fiscal year. Some of that business already reached the income statement, and the company expects $7.5 billion of AI infrastructure revenue in the new fiscal year.
The strength showed up in the fiscal fourth quarter, when revenue rose 18% to $17.3 billion. Product sales climbed far faster than services, which were flat. CEO Chuck Robbins called it a very strong close to a record year and said Cisco is positioned to support customers however or wherever they deploy AI.
Guidance for the new fiscal year calls for revenue of $72.2 billion to $73.4 billion. Whether Cisco can also win as customers look to spend less on AI is the question behind our piece on Cisco’s role in cheaper AI buildouts.
6. Gildan Activewear (NYSE:GIL)
Average Upside Potential: 35%
Number of Hedge Fund Holders: 32
UBS analyst Jay Sole downgraded Gildan Activewear to Neutral from Buy on November 6 and cut his price target to $38 from $71 after the third-quarter report. Beneath the weak guidance, the quarter held good news on profitability.
Adjusted operating margin came in at 27.0%, ahead of the company’s guidance of about 26%, as savings from the HanesBrands purchase began to show. Adjusted earnings per share rose 54.0% to $1.54 from a year earlier.
The cash flow supports the buyback. Free cash flow reached $605.7 million, and the board approved a new program to repurchase up to about 5% of the company’s shares, starting this month. The sale of the HanesBrands Australia business closed recently, and the proceeds went to pay down debt. The quarterly dividend stays in place as well.
Gildan still aims for about $250 million in annual run-rate savings by the end of 2028. CEO Glenn Chamandy said his confidence in the long-term growth opportunity has not changed, and the company plans to lay out an updated outlook at an investor day. Whether that purchase was a bargain is what our look at Gildan after it halved following HanesBrands weighs.
5. Fidelity National Information Services (NYSE:FIS)
Average Upside Potential: 26%
Number of Hedge Fund Holders: 49
J.P. Morgan downgraded Fidelity National Information Services to Neutral from Overweight on November 4 and cut its price target to $38 from $53, citing the company’s financial guidance and its chief financial officer’s exit. The cash numbers behind the stock tell a steadier story.
CEO Stephanie Ferris said client demand remains strong. Adjusted free cash flow was $862 million in the third quarter, up 8.0%. For the full year, the company expects free cash flow of $2.15 billion to $2.25 billion, a gain of 33% to 39%.
That cash is going toward lowering debt. FIS paused buybacks and small acquisitions to speed up the process and expects to resume meaningful repurchases once leverage reaches its target level. Even so, it returned $248 million to shareholders in the quarter, mostly through dividends. Adjusted earnings per share rose 6.6% to $1.61.
Ferris said investments in security and innovation will build a more recurring, predictable revenue base. The company is also tidying its portfolio. It recently sold a non-core prepaid business in banking, and its strategic review of the rest of the business is still underway.
4. HubSpot (NYSE:HUBS)
Average Upside Potential: 15%
Number of Hedge Fund Holders: 51
Cantor Fitzgerald analyst Matthew Vanvliet downgraded HubSpot to Underweight from Neutral on November 5 and cut his price target to $170 from $265. The quarter just reported had still beaten Wall Street’s numbers.
Analysts expected HubSpot to earn $3.28 a share. It earned $3.81 on an adjusted basis, the Associated Press reported, while revenue of $947.6 million beat the $924.5 million forecast. Net profit came to $83 million, or $1.67 a share.
The beat fits a long record of growth. HubSpot’s revenue has grown 28.81% a year over the past five years, and the software it sells keeps most of each sales dollar after the cost of delivering it.
The price looks modest next to that record. HubSpot trades at 15.41 times forward earnings, compared with 18.86 for its sector, and sits 83.99% below its own five-year average, on adjusted figures. For the fourth quarter, the company guided adjusted earnings of $3.85 to $3.87 a share. Bulls see a software company with a long growth record that now trades below its sector’s multiple. We recently looked at how HubSpot’s rising AI adoption could turn into revenue growth.
3. Adobe (NASDAQ:ADBE)
Average Upside Potential: 9%
Number of Hedge Fund Holders: 81
Citigroup downgraded Adobe to Sell from Neutral on November 4, with a price target of $207. The call sits against a quarter in which the company’s AI products grew fast.
CEO Shantanu Narayen called passing one billion monthly active users a defining moment for Adobe. That audience is the base for its AI products, and AI-first annual recurring revenue grew more than 150% from a year earlier.
The core business is growing too. Third-quarter revenue hit a record $6.76 billion, up 13%, and Adobe raised its full-year revenue and earnings targets, with non-GAAP earnings per share now expected between $24.45 and $24.50. Narayen said the quarter reflected the strength of the company’s AI innovation.
Total annual recurring revenue exited the quarter at $27.50 billion, so the AI products are growing from a large base. Remaining performance obligations, the revenue Adobe has signed up but not yet recognized, are mostly due within a year, about two-thirds of the total. Adobe also bought back about 9.5 million of its own shares in the quarter. The market’s worry about AI is the focus of our look at whether the fear around Adobe is overdone.
2. Apple (NASDAQ:AAPL)
Average Upside Potential: -1%
Number of Hedge Fund Holders: 169
DZ Bank downgraded Apple to Sell from Hold on November 4, with a price target of $300. The call came days after a record quarter, and the numbers behind the company stayed strong.
Apple’s installed base now tops 2.5 billion active devices, Yahoo Finance reported, and that base is why the company can post records at its size. In the September quarter, revenue rose 12% to $114.5 billion, a record for that quarter, and iPhone sales set a September-quarter record as well.
Apple returned $28 billion to shareholders in the quarter. Services revenue hit an all-time high, giving the company a growing stream of income from devices already sold. Active devices reached a record in every major product category and every geographic segment, and CFO Kevan Parekh said Apple set September-quarter records for net income and earnings per share. He guided December-quarter revenue growth of 7% to 10%.
John Ternus, who recently took over as CEO from Tim Cook, pointed to the iPhone Duo and a new line of home hardware as what comes next. Whether longer ownership can still raise profit per customer is the question in our piece on Apple’s iPhone economics.
1. Nike (NYSE:NKE)
Average Upside Potential: -8%
Number of Hedge Fund Holders: 56
Truist Securities analyst Joseph Civello downgraded Nike to Sell from Hold on November 5 and kept his price target at $29. The company’s latest report gave its supporters something to point to.
Nike’s turnaround shows up first in its margins. Gross margin widened 60 basis points to 42.8% in the fiscal first quarter, helped by lower warehousing and logistics costs. That kind of gain does not depend on a sales rebound, and it suggests the cleanup under CEO Elliott Hill is paying off.
Sales are steadier where Nike has focused. Wholesale, its largest channel, brought in $6.8 billion, down just 1%, with North America growing even as Greater China declined. Hill said the push around sport-specific products is driving measurable progress in its performance business, and the company says momentum continued across the sports it has chosen to prioritize, which Hill calls the Sport Offense.
Nike also returned about $610 million through dividends, up 3% from a year earlier. A dividend that keeps growing during a rebuild tells investors management believes the cash flow can support it. We also asked whether Nike’s turnaround is worth betting on.
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