Retail investors can learn a lot from tracking what hedge funds are buying and selling. Hedge funds are part of the “Smart Money,” and their large-scale transactions can give a sense of where the market may be headed
Goldman Sachs analyzed 695 hedge funds that manage $3.1 trillion in equity, ultimately identifying “Rising Stars” from the Russell 1000 Index (IWB). These are all stocks that are gaining hedge fund interest and that have historically outperformed their peers. Following this list could help investors spot future winners before they take off.
Two stocks that stand out on the list are Robinhood (HOOD) and Coupang (CPNG). Let’s dive into what Wall Street likes about these two names and what makes them “Rising Stars.”
Rising Star Stock #1: Robinhood
Robinhood Markets (HOOD) is a $39.3 billion fintech giant that pioneered commission-free stock trading. The company has since expanded into options, cryptocurrency, and other, non-trading financial services.
Robinhood drew serious hedge fund interest, adding 23 new backers between the third quarter and fourth quarter, the third-largest jump in ownership. 66 total hedge funds held HOOD shares as of Q4.
Shares of Robinhood rallied 117.5% over the past 52 weeks, outshining the Russell 1000 Ishares ETF’s (IWB) 9% return.
In terms of valuation, HOOD trades at 29.8 times forward earnings and 13.5 times sales, which isn’t cheap. With explosive growth and a loyal user base, the premium price tag still makes it a compelling bet on the future of fintech.
The fintech giant unveiled its Q4 earnings results on Feb. 12 after the market close, delivering a blowout that sent shares soaring 14.1% in the subsequent trading session. Net revenues skyrocketed 115% year over year to $1.01 billion, fueled by a staggering 200% jump in transaction revenues. Crypto trading stole the show, surging 700% to $358 million, constituting over a third of total revenues.
Meanwhile, EPS leaped to $1.01 from $0.03 in the year-ago quarter, as funded customers grew 8% annually to 25.2 million, and average revenue per user doubled to $164. Assets under custody swelled 88% to $193 billion, showcasing Robinhood’s growing influence.
Robinhood is doubling down on crypto, eyeing a bigger slice of the market. Its $200 million Bitstamp acquisition cements its blockchain ambitions, with plans to tokenize real-world assets like equities. The December quarter saw fresh listings – Solana (SOLUSD), XRP (XRPUSD), and Cardano (ADAUSD) – boosting its crypto presence.
Analysts tracking Robinhood project the company’s profit to reach $1.51 per share in 2025, up 38.5% year over year, and grow another 12.6% to $1.70 per share in 2026.
Wall Street’s outlook on HOOD stock is mostly optimistic, with a consensus “Moderate Buy” rating overall. Of 19 analysts covering the stock, 11 recommend a “Strong Buy,” two opt for a “Moderate Buy,” and the remaining six suggest a “Hold.”
The average analyst price target of $67 indicates potential upside of nearly 88% from the current price levels. The Street-high price target of $105 suggests that HOOD stock could rally as much as 194% from here.
Rising Star Stock #2: Coupang
Seattle-based Coupang (CPNG) owns and operates an e-commerce retail business through its mobile applications and internet websites both domestically in South Korea and abroad, and is often dubbed as “South Korea’s Amazon.” The company boasts a market cap of $41 billion.
Last quarter, Coupang caught more eyes on Wall Street, with 19 additional hedge funds jumping in. That pushed total hedge fund ownership to 64.
CPNG shares are up 20% over the past 52 weeks, also outperforming the IBW ETF in that time frame.
From a valuation standpoint, CPNG is priced at 63.2 times forward earnings and 1.38 times sales, carrying a premium price tag. Investors are betting on its explosive growth, efficiency gains, and market expansion to justify the valuation, positioning it as a high-upside e-commerce disruptor.
The e-commerce powerhouse dropped its Q4 earnings on Feb. 25 after the bell, and Wall Street took notice. Its $0.04 adjusted EPS smashed past the forecasts by 500%, sending shares up by 3.5% in the subsequent trading session, despite revenue missing the mark at $8 billion. Yet a 21% year-over-year top-line surge kept the momentum alive.
Active customers hit 22.8 million, a 10% increase, but per-customer spending remained steady at $302. Still, operational efficiency shined with gross profit jumping 48% to $2.5 billion, and adjusted EBITDA climbing 43.2% to $421 million, showcasing cost discipline.
While Coupang withheld formal guidance, its focus on logistics, tech, and strategic acquisitions like Farfetch underscores its ambition for luxury and international expansion. The road ahead includes cost management and integration risks, but with its scaling efficiencies and market reach, Coupang remains a formidable force in global e-commerce.
Analysts tracking Coupang project an EPS of $0.37 in 2025, up 68.2% from $0.22 per share in 2024. The 2026 bottom line is anticipated to be $0.69 per share, projected to rise 86.5% annually.
Wall Street is cautiously bullish overall, with a consensus “Moderate Buy” rating for CPNG. Out of the 13 analysts covering the stock, nine recommend a “Strong Buy,” two advise a “Moderate Buy,” and the remaining two analysts are playing it safe with a “Hold.”
The average analyst price target of $29.11 indicates potential upside of 32.5% from the current price. However, the Street-high target of $35 suggests that the stock could surge as much as 59%.
