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We just covered the Billionaire Joe Edelman’s 10 Stock Picks with Huge Upside Potential and Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM) ranks 5th on this list.

While Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM) faces high cash burn, hedge funds are piling into the stock due to its successful precision obesity pivot, which separates it from the broad-market GLP-1 (Ozempic/Wegovy) hype. In recent months, the firm has registered a series of landmark regulatory wins for their lead drug, IMCIVREE. In mid-March, the FDA granted full approval for IMCIVREE to treat acquired hypothalamic obesity, a high-unmet-need market. In late March, an EU body issued a positive opinion for the same indication. Funds view this as a transformative label expansion. Unlike generic obesity, hypothalamic obesity is rare and often follows brain tumors or surgery. This gives Rhythm a 100% market monopoly in this niche, providing pricing power that broad-market drugs cannot match.

There is also renewed focus on the rapidly scaling top-line performance of Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM). For the full year 2025, the firm reported a 50% year-over-year revenue increase, reaching roughly $194.8 million. Investors are positioning themselves in the stock ahead of the clinical shift from daily injections to oral pills. In early 2026, Rhythm initiated its Phase 3 trials for bivamelagon, a once-daily oral MC4R agonist. Smart money managers realize that an oral version would drastically increase patient adherence and market penetration.

While we acknowledge the potential of RYTM as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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