In this article, we’ll look at the 10 Best S&P 500 Stocks With Highest Upside Potential.
US stocks fell broadly on February 11. This came on the back of the release of the January jobs report on that day. The report showed a stronger-than-expected labor market.
According to the Bureau of Labor Statistics, the US added 130,000 jobs in January, exceeding 70,000 jobs expected by economists polled by Reuters.
Additionally, the unemployment rate was slightly lower at 4.3%, compared to 4.4% expected. Of note is that this was the lowest jobless rate since August 2025.
The Dow lost 66.74 points, representing a 0.13% decline, to close at 50,121.40. This snapped the blue-chip index’s three-day winning streak.
The S&P 500 index’s drop was muted in comparison to the Dow. The broad-based market index retreated less than a point to finish the day at 6,941.47. The Nasdaq Composite fell 0.16% to close at 23,066.47.
Only the NYSE Composite bucked the trend, advancing 0.35% to end at 23,479.72.
About the January jobs report, CNBC quoted Brad Smith, portfolio manager at Janus Henderson Investors, as saying:
“After a long period of prognosticators offering a tepid outlook for the economy based on a weakening labor market, this print provides a solid datapoint on the side of robust economic growth, an improving labor market and wage growth that can support consumer spending.”
Also, CNBC quoted Heather Long, chief economist at Navy Federal Credit Union, as saying: “That’s an encouraging sign to start the year, especially after the hiring recession in 2025.”
Market experts see the stock decline as a sign of investors thinking a stabilizing job market would temper with Fed rate cuts. In a note cited by Reuters, Oren Klachkin, financial market economist at Nationwide, observed that an extended pause in rate cuts seemed likely.
Periods of market volatility and macro-driven pullbacks often reshape investor sentiments, creating attractive entry points for several stocks. With that in mind, let’s dive into the 10 best S&P 500 stocks with highest upside potential.
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Our Methodology
To pick the 10 Best S&P 500 Stocks With Highest Upside Potential, we used the stock screener to filter for S&P 500 index stocks with market capitalizations above $10 billion. We further limited the selection to stocks with Moderate to Strong Buy ratings on Wall Street and more than 50% upside potential. We then analyzed Q3 2025 13F filings from Insider Monkey’s database and shortlisted 10 companies that had the highest number of hedge fund investors. Finally, we ranked the stocks in ascending order by the number of hedge funds holding positions in them as of Q3 2025.
Note: The data is of February 15
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. 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).
Best S&P 500 Stocks With Highest Upside Potential
10. Fidelity National Information Services (NYSE:FIS)
Number of Hedge Fund Holders: 57
Stock’s Upside Potential: 60.59%
Fidelity National Information Services Inc (NYSE:FIS) is among the best S&P 500 stocks with highest upside potential. On February 6, the investment research firm Stephens named Fidelity National Information Services Inc (NYSE:FIS) among its top stocks for 2026. This list includes companies that the firm believes stand to benefit from accelerating AI adoption.
Regarding Fidelity, Stephens analysts note that the company is poised to benefit from the growing demand for real-time transaction processing and banking modernization. The firm also pointed out that Fidelity has stabilized following restructuring efforts. Consequently, the company has improved margins and strong free cash-flow generation. Expanding fintech partnerships is another positive. Taken together, these make Fidelity one of the best-balanced risk-reward stocks in the sector.
On January 27, Cantor Fitzgerald initiated coverage of Fidelity stock with an Overweight rating and assigned it a price target of $72. FIS has faced a loss of investor trust, but analysts believe it can recover over time with reset expectations. Management has shown confidence by buying back shares and continuing its 23‑year streak of dividend payments, which currently yield 2.7%. Cantor Fitzgerald noted FIS’s wide reach across business lines, calling it an important part of the financial ecosystem.
Looking ahead, fiscal 2026 is expected to be an investment year as FIS works to reposition its business, but warn that a weak economy and reduced bank IT spending could hurt growth. The firm also flagged risks from FIS’s low current ratio of 0.53, showing short‑term obligations outweigh liquid assets. Shares have already fallen 27% in the past six months, making execution of its turnaround plan critical.
Fidelity National Information Services (NYSE:FIS) is a multinational financial technology provider. Among other areas, its solutions are used in banking, investing, and payment processing. Founded in 1968, the company is headquartered in Jacksonville, Florida.
9. Axon Enterprise Inc (NASDAQ:AXON)
Number of Hedge Fund Holders: 61
Stock’s Upside Potential: 90.59%
Axon Enterprise Inc (NASDAQ:AXON) is among the best S&P 500 stocks with highest upside potential. On February 11, Piper Sandler released its latest rankings of top digital infrastructure and connectivity software companies. Among the five standouts, Axon Enterprise Inc (NASDAQ:AXON) ranked third thanks to its strong position in public safety with TASERs and body cameras. The firm sees more growth ahead from new drone rules, AI features, and its Officer Safety Plan, while Axon’s recurring revenue model adds stability and strengthens its long‑term outlook.
Axon plans to release its Q4 2025 results on February 24. On February 3, William Blair reaffirmed its Outperform rating on Axon Enterprise after the Department of Homeland Security announced plans to expand the use of body‑worn cameras.
On February 2, the Department of Homeland Security said agents in Minnesota will start wearing body cameras right away, with plans to expand nationwide as more funding becomes available. This is a big opportunity for Axon since many DHS agencies still don’t have enough cameras for their officers.
William Blair called the move a major policy shift and believes it could boost demand for Axon’s products. The firm sees the initial $20 million funding as just the beginning, with more upside possible through Axon’s Evidence ecosystem, which includes cloud storage and digital tools. Axon’s strong profit margins support this view, though its stock is currently trading at high valuations.
Axon Enterprise Inc (NASDAQ:AXON) is a global provider of public safety technology solutions. Its products include body-worn cameras, which it supplies to customers such as US law enforcement agencies. Headquartered in Scottsdale, Arizona, Axon was founded in 1993. The company was formerly known as TASER International.