In this article, we will take a detailed look at the best debt free mid cap stocks to buy now.
Debt-free mid-cap stocks currently offer compelling investment opportunities, especially in today’s high-interest-rate environment. With borrowing costs elevated, companies burdened by debt face increased financial pressure, making debt-free businesses more resilient and attractive. Mid-cap stocks, in particular, balance growth potential with relative stability, often providing more agility and higher upside than large-cap counterparts. Moreover, companies with strong balance sheets and zero debt have more cash capacity to reinvest profits into growth initiatives rather than servicing the debt. As legendary investor Peter Lynch succinctly advised, “Companies that have no debt can’t go bankrupt,” highlighting the inherent safety and resilience found in debt-free investments.
Many modern fund managers support the philosophy of Peter Lynch and prefer companies that have an insignificant impact on profitability from interest costs. For reference, the Fundsmith Equity Fund, which has outperformed the world stock market index by 3 percentage points on average since inception, highlights that one of the secrets of its long-term success is, among others, picking stocks with low amounts of debt. They illustrate their performance by calculating that the average company they own has an interest coverage three times higher than the average company in the US stock market – this is primarily achieved by carefully selecting debt-free companies. They also argue that companies with strong balance sheets are more likely to be priced at higher valuations:
“Our portfolio consists of companies that are fundamentally [including debt levels] a lot better than the average of those in the broader market, so it is no surprise that they are valued more highly than the average S&P 500 company.”
READ ALSO: 10 Best Debt Free Stocks to Buy Now.
Less than two years have passed since the FED funds rate reached its peak in mid-2023. Contrary to a common misconception, we believe that the effects of high interest rates in the economy have not yet been felt at the individual company level. The reason is simple – most of the debt held by the average US company was issued prior to 2023 at lower coupon rates. In this context, as the lower interest rate debt is gradually refinanced and rolled over, it is inevitable that the actual interest costs of companies will become higher, directly impacting their profitability and cash flows. Lower free cash flow, in turn, means less reinvestment into the business and, as a result, weaker long-term growth potential. This is the mechanism through which the current elevated interest rates may finally hit the stock market in the coming years.
The problem of high interest rates in the economy is further aggravated by the policies of the new US administration. The FED mentions that they are not rushing to lower interest rates because the Trump 2.0 Tariff Turmoil is very likely to cause a spike in inflation in April, as (or if) the previously announced tariffs are enforced. Also, the US job market, manufacturing activity, and consumers are still relatively healthy, albeit there is a slight slowdown in optimism and spending appetite. Under such conditions, any premature cut in interest rates by the FED risks stagflation, which is one of the most destructive scenarios possible. The key takeaway for investors is that interest rates in the economy are likely to stay elevated above 4% for the foreseeable future, meaning that the impact on the profitability of high-debt companies is likely to increase over time. In this context, debt-free companies, and particularly mid-caps, shall be preferred by investors as they offer the most resilience and stability for the future.
A bank teller counting currency notes in a safe deposit box.
Our Methodology
We used a screener to identify mid cap companies between $2 billion and $10 billion market capitalization, with little to no debt. To quantify the debt level, we compared the enterprise value with market capitalization and opted for the stocks with the smallest difference between the two measures. Then we compared the list with our Q4 2024 proprietary database of hedge funds’ ownership and included in the article the top 10 stocks with the largest number of hedge funds that own the stock.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10. MarketAxess Holdings Inc. (NASDAQ:MKTX)
Number of Hedge Fund Holders: 45
Enterprise Value: $7.68 billion
Market Capitalization: $8.26 billion
MarketAxess Holdings Inc. (NASDAQ:MKTX) operates a leading electronic trading platform that enhances trading efficiency and provides a diversified pool of liquidity to institutional investors and broker-dealers in the global fixed-income markets. The platform facilitates the trading of various fixed-income securities, including US and European high-grade corporate bonds, high-yield bonds, emerging market debt, and other fixed-income instruments. MKTX offers automated and algorithmic trading solutions, along with integrated market data and post-trade services, supporting the full trading lifecycle.
MarketAxess Holdings Inc. (NASDAQ:MKTX) framed 2024 as a foundational year, marked by substantial investments in technology, setting the stage for 2025 to focus on execution and delivering results. The company operates through three main trading channels – client-to-dealer, portfolio trading, and dealer-to-dealer – with the client-to-dealer segment remaining the most critical. Within the US corporate bond space, MKTX continues to lead the traditional RFQ platform market, offering all-to-all trading capabilities and deep liquidity. Portfolio trading, while accounting for 9–10% of the market and peaking at 13%, generates lower revenue due to its fee model. However, the company has made notable advances in block trading, successfully executing over $1 billion in large bond trades with strong results.
The broader shift toward electronic trading has also contributed to higher market turnover, with dealer-to-dealer trading growing from 24% to nearly 30% of market share. Rather than broadly allocating resources, MarketAxess Holdings Inc. (NASDAQ:MKTX) is strategically targeting investments where it sees the greatest total addressable market potential, particularly in block trading. The recent acquisition of Pragma has further enhanced its tech stack, with integration spanning both rates and corporate bond platforms. Despite ongoing development efforts, the company remains cost-conscious, directing about 80% of its $65–70 million capital expenditure budget toward technology and software development, reinforcing its focus on scalable, high-impact innovation. With low levels of debt and 45 hedge funds owning the stock, MKTX is one of the best debt free stocks to buy now.
9. SentinelOne, Inc. (NYSE:S)
Number of Hedge Fund Holders: 47
Enterprise Value: $5.76 billion
Market Capitalization: $6.38 billion
SentinelOne, Inc. (NYSE:S) is a cybersecurity company specializing in AI-powered autonomous threat prevention, detection, and response across endpoints, cloud workloads, and identity credentials. Its Singularity Platform integrates endpoint protection, endpoint detection and response, cloud and identity security, and extended detection and response capabilities, enabling organizations to defend against a broad spectrum of cyber threats. The company serves a diverse global clientele across industries such as finance, energy, healthcare, higher education, and manufacturing. It is one of the best debt free stocks to invest in.
SentinelOne, Inc. (NYSE:S) delivered a transformative fiscal year 2025, exceeding expectations across all guided metrics and achieving significant milestones. The company demonstrated an industry-leading revenue growth of over 30% while driving more than 15 percentage points of operating margin expansion. A notable achievement was the successful transformation from an endpoint-focused model to a comprehensive AI-native cybersecurity platform, with non-endpoint solutions crossing 50% of full-year bookings. The company reached several profitability milestones, including its first quarter of positive operating income in Q4, its first full year of positive net income and earnings per share, and its first full year of positive free cash flow.
Looking ahead, SentinelOne, Inc. (NYSE:S) expects to surpass $1 billion in both ARR and revenue in the fiscal year 2026 while achieving full-year operating income profitability. The company has positioned itself as a leader in AI innovation, becoming the first company to embed foundational generative AI capabilities into every platform solution by default. The platform’s strength is demonstrated by strong customer adoption metrics, with the company tripling the number of customers with 3 or more solution categories and quadrupling those with 4 or more solutions. In the cloud security segment, the company achieved record bookings contribution from data cloud and AI security solutions in Q4, highlighting the accelerating adoption of their broader platform.
8. The New York Times Company (NYSE:NYT)
Number of Hedge Fund Holders: 47
Enterprise Value: $7.13 billion
Market Capitalization: $8.00 billion
The New York Times Company (NYSE:NYT) is a global media organization primarily known for publishing “The New York Times”, a leading daily newspaper available in print and digital formats. The company’s portfolio includes other media properties such as “The New York Times International Edition”, the sports news site “The Athletic”, and the product review website “Wirecutter”. Beyond news, it offers subscription-based lifestyle products, including cooking guides, games, and audio content. The company operates a digital subscription model, with over 11 million total subscribers as of early 2025.
The New York Times Company (NYSE:NYT) has demonstrated strong engagement metrics with 50 million to 100 million weekly users and 150 million registered users. The company has been recognized as having the most engaged news site in terms of time spent, according to Comscore. Its bundle strategy has been successful, with bundled subscribers approaching 48% of the digital subscriber base, showing better retention, engagement, and monetization. The Times has focused on expanding its content delivery through multiple formats, including increased video content, audio capabilities, and enhanced live journalism coverage.
The New York Times Company (NYSE:NYT) maintains a strong competitive advantage in non-news categories through its scale and quality, with 20,000-plus tested recipes in cooking, 550 people in The Athletic’s newsroom, and 150 people conducting product reviews for Wirecutter. The Times has successfully implemented format innovations while maintaining its commitment to revenue growth, AOP growth, margin expansion, and strong free cash flow for 2025. The company’s advertising business shows potential for growth, particularly in games and sports categories, which have strong cultural relevance and marketer interest. The majority of subscription starts continue to come organically rather than through paid media, demonstrating the strength of the company’s core value proposition. With close to zero debt on the balance sheet and 47 hedge funds owning the stock, NYT is one of the best debt free stocks to buy now.
7. Clearwater Analytics Holdings, Inc. (NYSE:CWAN)
Number of Hedge Fund Holders: 48
Enterprise Value: $6.33 billion
Market Capitalization: $6.51 billion
Clearwater Analytics Holdings, Inc. (NYSE:CWAN) is a leading provider of SaaS-based investment management, accounting, reporting, and analytics solutions. Its cloud-native platform automates data aggregation, reconciliation, compliance, risk assessment, and order management, serving institutional clients such as insurers, asset managers, corporations, and public sector entities. Additionally, the company introduced Clearwater-GPT, leveraging generative AI to offer interactive client features. CWAN ranked fifth on our recent list of 10 Best Performing Fintech Stocks to Buy According to Analysts.
Clearwater Analytics Holdings, Inc. (NYSE:CWAN) provides investment accounting services for asset managers and asset owners, offering accounting, compliance, risk, and performance solutions through a single-instance multi-tenant platform. The company has demonstrated strong financial performance with a consistent growth of 20-25% annually and has maintained high profitability since its inception. The company achieved notable success in Q4 with a Net Revenue Retention (NRR) of 116%, surpassing their original target of 115% a year ahead of schedule. The company’s growth strategy is driven by multiple components, including minimal churn (98-99% gross revenue retention), successful pricing initiatives (4-5% contribution), strong upsell performance (7%), and cross-sell opportunities (3-3.5%).
A significant development is the pending acquisition of Enfusion, which is expected to close in mid-April, strengthening its market position, particularly in hedge funds and international markets. Clearwater Analytics Holdings, Inc. (NYSE:CWAN) maintains its long-term targets of 20% top-line growth, 80% gross margin, and 40% EBITDA margins, even after incorporating Enfusion. The company has made significant progress in leveraging AI technology to drive efficiency, particularly in client service operations, contributing to improved gross margins. Looking ahead, the company’s strategic priorities focus on successfully integrating Enfusion, maintaining 20% growth, and delivering on their promise as a single instance, multiproduct solution with a global security master. With close to no debt on the balance sheet and 48 hedge funds owning the stock, CWAN is one of the best debt free stocks to buy.
6. Vaxcyte, Inc. (NASDAQ:PCVX)
Number of Hedge Fund Holders: 50
Enterprise Value: $7.43 billion
Market Capitalization: $9.11 billion
Vaxcyte, Inc. (NASDAQ:PCVX) is a clinical-stage biotechnology company focused on developing high-fidelity vaccines to prevent or treat bacterial infectious diseases. The company’s lead candidate, VAX-24, is a 24-valent pneumococcal conjugate vaccine designed to prevent invasive pneumococcal disease and is currently in Phase 2 clinical trials for infants. PCVX is also advancing VAX-31, a 31-valent PCV, which has completed a successful Phase 2 adult study and is expected to enter Phase 3 trials by mid-2025. Utilizing advanced chemistry and the XpressCF™ cell-free protein synthesis platform, the company aims to re-engineer vaccine production for enhanced immunological benefits. It is one of the best debt free stocks to invest in.
Vaxcyte, Inc. (NASDAQ:PCVX) demonstrated significant progress in 2024, particularly with its pneumococcal vaccine franchise, highlighted by stellar VAX-31 clinical data in adults announced in September. The company’s financial position remains robust, with $3.13 billion in cash, cash equivalents, and investments as of December 31, 2024, bolstered by $2.2 billion in net proceeds from two successful follow-on equity offerings. The VAX-31 Phase I/II study showed robust opsonophagocytic activity responses across all 31 serotypes, with the high dose demonstrating greater immune responses for 18 of 20 serotypes compared to PCV20. Based on these results, the FDA granted breakthrough therapy designation for VAX-31 in adults in November 2024.
Vaxcyte, Inc. (NASDAQ:PCVX) is advancing both VAX-24 and VAX-31 programs in infants, with VAX-24 infant Phase II study data expected by the end of Q1 2025 and VAX-31 infant program data anticipated by mid-2026. The company is also making significant progress in manufacturing scale-up through its partnership with Lonza, with a dedicated facility build-out on track for completion by early next year. The global pneumococcal vaccine market, currently valued at approximately $8 billion in annual sales, continues to expand with significant growth potential in the adult segment. Beyond the PCV franchise, PCVX is developing vaccines targeting other bacterial threats, including Group A Strep, Periodontitis, and Shigella, positioning itself at the forefront of addressing antimicrobial resistance.
5. Onto Innovation Inc. (NYSE:ONTO)
Number of Hedge Fund Holders: 50
Enterprise Value: $5.72 billion
Market Capitalization: $6.56 billion
Onto Innovation Inc. (NYSE:ONTO) is a semiconductor equipment and software provider that offers process control solutions, including optical metrology and inspection systems, to enhance yield and device performance in semiconductor manufacturing. Its product portfolio encompasses unpatterned wafer quality assessment, 3D metrology for chip features, macro defect inspection, metal interconnect composition analysis, factory analytics, and lithography for advanced semiconductor packaging. ONTO ranked first on our recent list of 10 Best Mid Cap Tech Stocks to Buy Now.
Onto Innovation Inc. (NYSE:ONTO) achieved a record Q4 with revenue of $264 million, marking their sixth consecutive quarter of growth. The company demonstrated strong financial performance in 2024, achieving 21% revenue growth, 37% operating income growth, and 43% growth in both cash from operations and EPS. AI packaging emerged as a significant growth driver, with inspection tool revenue more than doubling for the year. The company’s metrology revenue in advanced packaging exceeded $50 million, more than triple that of 2023.
Looking forward, Onto Innovation Inc. (NYSE:ONTO) identified three key secular growth drivers: AI demand growing at a high pace, increased demand for gate all around DDR5 memory and high-stack 3D NAND, and the electrification trend. The company’s gross margins improved every quarter in 2024 to end at nearly 55% in the fourth quarter, with continued focus on margin improvements throughout 2025. The company also launched several new products aimed at strengthening opportunities in advanced packaging, advanced nodes, and power semiconductors, with meaningful revenue expected in 2026. With close to zero debt and 50 hedge funds owning the stock, ONTO is one of the best debt free stocks to buy.
4. Nuvalent, Inc. (NASDAQ:NUVL)
Number of Hedge Fund Holders: 50
Enterprise Value: $4.15 billion
Market Capitalization: $5.27 billion
Nuvalent, Inc. (NASDAQ:NUVL) is a biopharmaceutical company focused on developing targeted treatments for cancers with few existing options. Its products are designed to address issues like resistance to therapy, side effects, and tumors that spread to the brain. The company is advancing drug candidates aimed at specific types of lung and other cancers, and these are currently undergoing clinical testing. NUVL’s approach seeks to offer more precise and effective solutions to improve patient outcomes and capture market opportunities in oncology.
Nuvalent, Inc. (NASDAQ:NUVL) is demonstrating strong clinical execution, with robust enrollment across its pipeline – 430 patients in the ROS1 program and 600 in the ALK program through December – positioning the company well for upcoming value-inflection points. Its lead asset, zidesamtinib, continues to differentiate based on safety and CNS penetration, key considerations in the competitive landscape. The company anticipates a pivotal data readout from the ARROS-1 study in the first half of the year, with a top-line release followed by a full presentation at a major medical meeting. In its ALK program, NUVL expects to report pivotal data across both second- and third-line settings by year-end, creating multiple potential catalysts within the next 12 months.
Early clinical signals suggest Nuvalent, Inc. (NASDAQ:NUVL)’s ALK inhibitor may offer meaningful advantages over existing therapies, particularly in treatment durability for late-line patients. A Phase III head-to-head trial (Alcazar), designed to benchmark performance against alectinib – the current standard of care – is already underway with a 450-patient enrollment target and projected completion in 2029. From a commercial standpoint, NUVL is strategically positioned in a $2 billion ALK market, with the potential to capture a significant share as treatment paradigms evolve. The addressable market may expand meaningfully, mirroring the trajectory of the EGFR lung cancer segment, which has grown from $2 billion to over $5 billion, underscoring the long-term opportunity for investors.
3. GitLab Inc. (NASDAQ:GTLB)
Number of Hedge Fund Holders: 51
Enterprise Value: $7.24 billion
Market Capitalization: $8.23 billion
GitLab Inc. (NASDAQ:GTLB) is a technology company that provides a comprehensive DevSecOps platform, enabling organizations to manage the entire software development lifecycle. Its platform integrates tools for planning, development, testing, security, and deployment, streamlining workflows and enhancing collaboration. GTLB serves a diverse range of industries, including technology, finance, healthcare, and retail, offering solutions for both cloud-based and on-premises environments. The company generates revenue through subscription-based plans and targets enterprises seeking to improve software delivery efficiency and security. It is among the best debt free stocks to monitor.
In fiscal year 2025, GitLab Inc. (NASDAQ:GTLB) delivered impressive financial results, achieving a 31% YoY revenue increase, with fourth-quarter growth reaching 29%. This momentum was fueled largely by seat expansion, which accounted for 75% of the growth, followed by higher customer spending and tier upgrades. The company’s strong customer retention, evidenced by a net dollar retention rate of 123%, highlights its success in deepening existing client relationships. GTLB also saw heightened demand from enterprise clients seeking platform consolidation, resulting in major wins such as Barclays, which adopted 20,000 Ultimate and 20,000 Duo seats, alongside notable partnerships with Amazon, NatWest, Anthropic, and CACI.
Strategically, GitLab Inc. (NASDAQ:GTLB) has reinforced its position as a leader in the software development lifecycle space, placing significant emphasis on artificial intelligence. Its AI product lineup, including Duo Pro for intelligent code suggestions, Duo Enterprise for broader lifecycle enhancements, and Duo Workflow currently in private beta, has started to gain meaningful traction. As it looks to fiscal year 2026, management plans to concentrate on accelerating initial customer adoption, increasing value through upgrades from Premium to Ultimate tiers, and advancing R&D efforts – especially in AI innovation.
2. Chord Energy Corporation (NASDAQ:CHRD)
Number of Hedge Fund Holders: 56
Enterprise Value: $5.66 billion
Market Capitalization: $6.67 billion
Chord Energy Corporation (NASDAQ:CHRD) is an independent exploration and production company specializing in crude oil, natural gas, and natural gas liquids. Its operations are concentrated in the Williston Basin, a region known for significant energy resources. The company focuses on acquiring, developing, and exploiting hydrocarbon assets to maximize production and efficiency and generates its revenue by selling its products to domestic and international markets, aiming to capitalize on energy demand while maintaining operational sustainability. CHRD ranked ninth on our recent list of 11 Best Crude Oil Stocks To Buy Right Now.
Chord Energy Corporation (NASDAQ:CHRD) closed out 2024 with strong operational and financial results, generating roughly $282 million in adjusted free cash flow for the fourth quarter. The successful merger with Enerplus marked a pivotal moment for the company, enhancing its scale and solidifying its leadership in the Williston Basin. This integration brought significant operational and corporate synergies, allowing CHRD to maintain stable or slightly growing production levels with minimal capital outlay. As a result, the company was able to return $944 million to shareholders on a pro forma basis, primarily through aggressive share repurchases, reducing its outstanding shares by over 5% since the merger.
Looking ahead to 2025, Chord Energy Corporation (NASDAQ:CHRD) plans to sustain its disciplined capital approach, allocating $1.4 billion for maintenance-level investment while targeting daily production of 152,000 to 153,000 barrels of oil equivalent. Based on commodity price assumptions of $70 per barrel for oil and $3.50 per MMBtu for natural gas, CHRD anticipates generating approximately $860 million in free cash flow with a reinvestment rate of about 60%. The company is also advancing its operational efficiency through extended lateral drilling, having completed its first 4-mile lateral and expecting over 40% of its 2025 wells to feature 3-mile laterals – a figure projected to exceed 50% in the following two years. These initiatives, supported by a vast inventory of low-cost, high-return projects, position the company for continued strong cash generation and consistent capital returns.
1. Revolution Medicines, Inc. (NASDAQ:RVMD)
Number of Hedge Fund Holders: 60
Enterprise Value: $4.93 billion
Market Capitalization: $7.08 billion
Revolution Medicines, Inc. (NASDAQ:RVMD) is a clinical-stage biotech company developing cancer drugs that target a key group of genetic mutations known as RAS, which are commonly found in difficult-to-treat tumors. The company uses proprietary technology to design small-molecule drugs that block these cancer-driving proteins. Its main drug candidates are in human trials and focus on types of lung and pancreatic cancer where current treatment options are limited. Based in California, RVMD aims to build a pipeline of precision therapies that could address a broad segment of the oncology market.
Revolution Medicines, Inc. (NASDAQ:RVMD) is making meaningful strides in addressing pancreatic cancer, a historically difficult-to-treat indication, with its lead candidate RMC-6236 (Daraxonrasib). The ongoing RASolute 302 trial is targeting second-line treatment in approximately 420 patients and is seeing strong enrollment momentum, with data readouts expected in 2026. Early clinical signals have been compelling, with median progression-free survival reaching 8.8 months and median overall survival extending to 14.5 months at the 300mg dose – markedly higher than the historical benchmarks of approximately 3 and 6 months, respectively. These data suggest the potential for material improvement over current standards of care.
Looking ahead, Revolution Medicines, Inc. (NASDAQ:RVMD) is broadening its pancreatic cancer pipeline by launching additional trials in 2025, including a first-line metastatic study and a trial in early-stage resectable disease for adjuvant use. Importantly for patient-centric outcomes, reported quality-of-life improvements such as reduced pain and weight gain support clinical value beyond survival metrics. RVMD is also advancing Zoldonrasib, a selective G12D inhibitor, which has shown promising monotherapy activity, with more data anticipated in the coming quarters. The company’s strategy includes developing RAS-targeted combination therapies, such as dual inhibitor regimens and collaborations with Tango Therapeutics, potentially enhancing durability and broadening the market opportunity.
Overall, Revolution Medicines, Inc. (NASDAQ:RVMD) ranks first on our list of the 10 best debt free mid cap stocks to buy now. While we acknowledge the potential of RVMD as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than RVMD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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