The Next Market Leaders? 5 Growth Stocks to Watch in 2026

Growth and mid-cap stocks often occupy the same corners of the market. They are typically past the fragile early stages that define many speculative small caps, yet still early enough in their lifecycle to deliver outsized upside if execution continues. These companies often sit at the intersection of innovation, revenue scaling, and market expansion. However, they also carry higher volatility and sentiment-driven swings than established large-cap, blue-chip leaders.

Not all growth stocks are created equal, though. Some rely heavily on narratives or major themes, while others are quietly building durable businesses with improving margins, real earnings power, and long-term competitive advantages. It’s the latter group that tends to outperform across multi-year cycles, particularly when market leadership rotates away from mega-cap dominance.

With 2026 underway, many investors might be focused on where the next wave of leadership and themes may emerge. Here are five growth and mid-cap stocks demonstrating compelling setups, improving fundamentals, and the potential to outperform over the year ahead.

DLocal: Emerging Market Fintech

DLocal (NASDAQ: DLO) continues to stand out as one of the more compelling fintech growth stories tied to emerging markets. The Uruguay-based payments company enables global merchants to accept local payment methods across Latin America, Africa, and Asia, solving a critical friction point in cross-border commerce.

After a volatile period following its IPO, DLocal has quietly rebuilt confidence and achieved a successful turnaround. The stock has stabilized technically and remains supported by consistently strong operational performance. Revenue growth has remained impressive, driven by expanding merchant adoption and increasing transaction volumes across key regions. In its most recent Q3 earnings report, the company topped both sales and earnings estimates, with earnings expected to grow by more than 21% this year.

Fundamentally, DLocal trades at a valuation that looks increasingly reasonable and attractive for its growth profile. With a forward P/E of 16.6, the stock sits at a notable discount to many fintech peers despite delivering faster top-line growth. Analysts agree, with their consensus price target implying nearly 14% upside potential from its previous close. 

From a technical standpoint, the stock has held key support levels near $12 and continues to form higher lows, suggesting accumulation rather than distribution. If emerging markets continue to benefit from dollar weakness and global diversification flows, DLocal could remain a beneficiary of that broader theme this year.

Pagaya Technologies: AI Underwriting Gaining Institutional Traction

Pagaya Technologies (NASDAQ: PGY) represents a more sophisticated corner of the fintech universe, focused on AI-driven credit underwriting rather than consumer-facing apps. The company partners with banks and financial institutions to enhance loan approval rates while managing risk through machine-learning models trained on massive datasets.

The stock delivered exceptional returns in recent years, surging over 160% over the prior 12 months. Of course, given its mid-cap status with a $2 billion market capitalization, it hasn't been without volatility. Currently, the stock is 42% off its 52-week high. But fundamentally, despite the volatility, the company has continued to impress. It's topped estimates in all three of its prior quarters. Most recently, PGY announced Q3 results on Nov. 10, 2025, topping  EPS estimates by almost 9% and sales estimates by 3.5%. 

One of Pagaya’s most attractive attributes is its scalability. As more partners integrate its platform, incremental volume can flow through with relatively modest cost increases, creating operating leverage over time. Management has consistently raised guidance, signaling confidence in demand and execution.

Valuation has also come down materially following the recent pullback. With a forward P/E of 16.23, the stock now trades at levels that better reflect its growth-adjusted potential rather than speculative excess. Technically, the stock has been attempting to build a base near longer-term moving averages, near $25. If a higher low confirms, Pagaya could be setting up for another leg higher. If analysts are right, that upside could be substantial. Based on 10 analyst ratings, the stock has a consensus price target of $37.25, representing over 40% upside from its previous close on Friday, Jan. 9. 

Zeta Global: Data-Driven Marketing at Scale

Zeta Global (NYSE: ZETA) has steadily emerged as one of the more underappreciated growth stories within the data and marketing technology space. The company provides AI-powered customer intelligence and marketing automation tools that enable enterprises to acquire, retain, and monetize customers more effectively across digital channels.

What sets Zeta apart is its focus on first-party data and deterministic identity, an increasingly valuable asset as privacy regulations tighten and third-party cookies fade. This positioning has allowed Zeta to win larger enterprise contracts while expanding wallet share among existing clients.

Financially, the company has delivered consistent revenue growth while steadily improving margins. In its most recent two quarters, the company posted consecutive earnings and sales beats. Most recently, for its Q3 earnings reported on Nov. 4, 2025, the company topped EPS estimates by 10% and sales estimates by almost 3%. For the full year, sales are expected to grow by up to 36%, according to company guidance and some analyst estimates. 

Technically, the stock just broke out of a lengthy consolidation, setting up a potential bull run. If the breakout level of $20 can hold and the stock consolidates at higher levels, this is one agentic AI stock that could surprise many this year with its upside potential. 

UiPath: Automation Reaccelerates With AI Integration

UiPath (NYSE: PATH) is at the center of a theme that could become a leading theme this year: agentic AI. The company describes its mission as “shaping the future of agentic automation.” The UiPath Platform brings together AI agents, robots, people, and machine learning models to collaborate across an organization, from front-office workflows to complex back-office operations. The company provides a complete end-to-end automation ecosystem designed to build, run, manage, and govern high-scale automation.

While the company’s broader RPA platform remains its core strength, momentum has been accelerating in its AI-agent orchestration strategy. UiPath recently highlighted that more than 950 companies are now building AI agents through its platform, and its Maestro product has orchestrated over 365,000 processes.

Fundamentally, the company has made significant strides in recent quarters, particularly in profitability and cash-flow discipline. The company announced Q3 2025 earnings on Dec. 3, 2025, topping EPS estimates by 2 cents and growing revenue year-over-year by 15.9% to $411 million. 

From a technical perspective, there’s firm momentum behind the stock. PATH has been forming a bullish base with higher lows and higher highs in recent months. For a major breakout to be confirmed, the stock would first need to clear resistance at $18, followed by its 52-week near $20.

Nebius Group: AI Infrastructure With Explosive Growth Potential

Nebius Group (NASDAQ: NBIS) may be the most well-known name on this list, thanks to its exceptional momentum in 2025 and major deals announced, including one with Microsoft (NASDAQ: MSFT). The company operates a diversified ecosystem that includes AI cloud computing, data labeling through Toloka, autonomous vehicle technology, and technical education platforms.

The core of the bull case lies in Nebius’ AI cloud business, which provides high-performance infrastructure optimized for AI workloads. Demand for compute power continues to surge as enterprises and developers scale AI models, and Nebius has positioned itself as a credible alternative within a capacity-constrained market.

Growth expectations are aggressive, but they are supported by long-term contracts and expanding institutional interest. Analysts have highlighted the company’s rapidly increasing revenue run rate and the potential for meaningful upside if management executes on its expansion plans. The stock has a Buy consensus rating and $144.7 consensus price target, implying almost 50% upside potential for the high-growth AI infrastructure name.

The stock has already delivered substantial gains, up over 200% over the prior 12 months. But if NBIS management is correct in projecting ARR (annual run-rate revenue) to climb to $7-$9 billion in 2026, then the stock might still be trading at an attractive valuation. Technically, NBIS has shown strong relative strength, consistently attracting buyers on pullbacks. If AI infrastructure spending remains a dominant theme in 2026, Nebius could continue to emerge as a leading mid-cap growth story and eventual large-cap stock. 

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