Donald Trump’s victory in the recent presidential election is expected to encourage companies that have been hesitant to pursue IPOs in 2025, capitalizing on the positive market reaction and anticipated deregulation. Following the election, the Russell 2000 Index rose to near a three-year high, while the S&P 500 reached record levels, creating a favorable environment for risk-taking among investors. Nearly $40 billion has been raised through IPOs this year, marking a 64% increase from 2023, although still below pre-pandemic averages. The pro-cryptocurrency stance of Trump may also influence the market, with expectations of increased activity in crypto-related IPOs if regulatory conditions improve. While an immediate surge in IPOs is unlikely due to a limited number of companies ready to file, there is optimism for a larger set of IPOs next year as companies seek to raise capital and insiders look for liquidity.

Generally, there’s also a noticeable disconnect between the tech IPO market and the broader IPO landscape, with many firms opting to remain private longer due to the growth of private credit as an alternative funding source. However, optimism exists that public markets will regain attractiveness as valuations rise and investor demand for public offerings increases. On October 24, Ashley MacNeill of Vista Equity Partners appeared on CNBC to shed light on the then-current stagnant state of the IPO market. We covered this in detail in our 10 Best IPO Stocks To Buy Heading into 2025 article, here’s an excerpt from it:

“MacNeill emphasized that for the IPO asset class to function effectively, 3 key conditions must align: a stable macroeconomic environment, investor willingness to deploy capital, and companies’ ability to communicate their earnings forecasts…

Despite the prevailing sentiment of a strong economy and record highs in the stock market, the IPO market remains stagnant. MacNeill suggested that this disconnect may stem from a bifurcation between the tech IPO market and the broader IPO market… MacNeill noted that this trend has contributed to the delay in the IPO market’s return to normalcy. However, she remains optimistic about the evolution of IPOs, suggesting that public markets will regain their appeal as high valuations and investor demand for public offerings increase.”

Additionally, expectations for M&A activity are on the rise, fueled by renewed investor eagerness. Mitch Berlin, vice chair of strategy and transactions at EY Americas, joined CNBC’s ‘The Exchange’ on November 22 to discuss what he sees for M&A activity in 2025. He noted that while there is a general sense of optimism, it is essential to differentiate between private equity and corporate growth. Berlin anticipates a 16% increase in private equity activity and an 8% increase in corporate transactions, driven largely by pent-up demand and significant capital reserves available for investment. This growth is also influenced by maturing assets that private equity firms are eager to leverage.

Looking ahead, Berlin speculated on potential headlines for early 2025, predicting larger deals primarily within the tech sector, fueled by advancements in AI. He also highlighted the continued importance of oil and gas in M&A, albeit from a value rather than volume perspective. Life sciences companies are expected to utilize their cash-rich balance sheets to make strategic acquisitions aimed at replenishing their research and development pipelines. Furthermore, he expressed optimism that regulatory hurdles from the Federal Trade Commission (FTC) and Department of Justice (DOJ) would become less of a barrier, allowing for smoother deal approvals.

Addressing concerns about interest rates, Berlin reassured that the current environment would not hinder deal-making. He expects interest rates to decrease further in 2025, which could stimulate more activity. Many deals are being funded through cash on hand, and private credit continues to be a significant source of financing, with three-quarters of deals this year being supported by such credit.

Berlin’s insights reflect a robust outlook for both private equity and corporate M&A activity as firms adapt to changing market conditions. As firms adapt to the changing market, investors should stay alert for new opportunities. With an anticipated strong IPO market in 2025, this context sets the stage for our upcoming list of the 10 best up-and-coming stocks to buy according to analysts.

Methodology

We used the Finviz stock screener to compile an initial list of 30 stocks that went public in the last 5 years. We then selected the 10 stocks with high analysts’ upside potential and that were also the most popular among elite hedge funds. The stocks are ranked in ascending order of analysts’ upside potential.

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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

10 Best Up and Coming Stocks To Buy According to Analysts

10. Archer Aviation Inc. (NYSE:ACHR)

Average Upside Potential as of November 26: 38.79%

Number of Hedge Fund Holders: 24

Archer Aviation Inc. (NYSE:ACHR) is an urban air mobility company focused on developing electric vertical takeoff and landing (eVTOL) aircraft designed for efficient and sustainable air transportation in urban environments. It’s working on manufacturing and certifying its aircraft, with plans to launch air taxi services in several cities by 2026.

The Federal Aviation Administration (FAA) has made significant strides in regulating electric air taxis, paving the way for their commercial launch in the US by 2025. This development signifies a major leap forward for urban air mobility. Archer Aviation Inc. (NYSE: ACHR) is at the forefront of this revolution, actively collaborating with the FAA to certify its Midnight aircraft, an advanced eVTOL aircraft. The company has completed the initial certification phases and is now focused on meeting the rigorous safety standards set by the FAA. Additionally, the company is working with international regulators to expand its global reach.

A strategic partnership with Falcon Aviation and Etihad will facilitate the recruitment and training of pilots, the establishment of maintenance protocols, and the organization of initial regional piloted flight exhibitions, anticipated to launch in 2025. Additionally, the company has agreed with Japan Airlines and Sumitomo Corporation’s joint venture, Soracle, to introduce eVTOL technology to the Japanese market. This collaboration aims to bring Midnight aircraft to congested cities like Tokyo, offering a more efficient and sustainable mode of transportation.

With strong industry partnerships and a relentless commitment to innovation, the future of electric air taxis appears promising. As a result, Archer Aviation Inc. (NYSE:ACHR) emerges as a compelling investment opportunity.

9. Renew Energy Global (NASDAQ:RNW)

Average Upside Potential as of November 26: 48.64%

Number of Hedge Fund Holders: 16

Renew Energy Global (NASDAQ:RNW) generates power from renewable energy sources, primarily focusing on wind and solar energy. It develops, builds, and operates large-scale energy projects that provide clean electricity to commercial and industrial customers, primarily in India. It provides decarbonization solutions through a mix of green hydrogen, data-driven solutions, storage, manufacturing, and carbon markets.

The company recently partnered with Microsoft to significantly boost its green energy efforts. This partnership involves a 437.6 MW green attribute sale contract, which is supposed to generate substantial clean electricity. This collaboration marks a significant milestone in India’s renewable energy landscape, contributing to the country’s ambitious climate goals.

Renew Energy Global (NASDAQ:RNW) reported strong financial performance for the second quarter of 2025, driven by cost optimization and operational efficiency. The company achieved $318.89 million in quarterly revenue, although this was a 7.48% year-over-year decline. Its strong financial performance, coupled with its strategic focus on growth, positions the company for continued success.