In this article, we will discuss the 10 Best Stocks to Invest in for the Next 5 Years.
While the value category and small-cap stocks managed to outperform in August, Morningstar continues to see healthy investment opportunities in such areas compared to the rest of the market. The firm further expects the US Fed to start easing monetary policy at its next meeting (scheduled for September 16 – September 17) and go for additional easing steps throughout 2026. Notably, the long-term interest rates remained on a downward trend over the previous few months.
Investment Strategies Moving Forward
In a fully valued market, Morgan Stanley Investment Management advises optimizing asset and investment selection in portfolios. The firm believes that investors are now entering the optimism phase of the bull market, where it anticipates investors to be even more optimistic than they have been in the previous 2 years. Furthermore, the potential impact of Gen AI on private market performance is anticipated to be a key theme in 2025, opines Morgan Stanley Investment Management.
Amidst these trends, we will now have a look at the 10 Best Stocks to Invest in for the Next 5 Years.
Our Methodology
To list the 10 Best Stocks to Invest in for the Next 5 Years, we conducted an extensive search and sifted through several online rankings. After getting an extended list of stocks, we chose the ones popular among hedge funds, as of Q2 2025. Finally, the stocks are arranged in ascending order of their hedge fund sentiments.
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 Best Stocks to Invest in for the Next 5 Years
10. American Express Company (NYSE:AXP)
Number of Hedge Fund Holders: 70
American Express Company (NYSE:AXP) is one of the Best Stocks to Invest in for the Next 5 Years. On September 10, UPS and American Express Company (NYSE:AXP) announced an expanded agreement to support small businesses grow and drive commerce in the communities. They are rolling out new and exclusive offers to help SMBs. Notably, during the critical holiday season, when each and every transaction counts, small businesses tend to be dependent on credit cards to manage cash flow, stock inventory as well as to cater to increased demand.
American Express Company (NYSE:AXP)’s Q2 2025 results continued the healthy momentum, with revenues rising 9% YoY to reach a record $17.9 billion, and adjusted EPS increasing 17%. American Express Company (NYSE:AXP) saw record card member spending in Q2 2025, while the demand for its premium products remained strong. Also, its credit performance was best in class. The YoY revenue growth was mainly aided by higher Card Member spending, increased net interest income supported by growth in revolving loan balances, and robust card fee growth.
GreensKeeper Asset Management, an investment management company, released its Q2 2025 investor letter. Here is what the fund said:
“The top contributor to the portfolio in the second quarter was American Express Company (NYSE:AXP) +18.6%. AXP’s affluent customer base continued to spend in Q1, with revenues up 8% at constant currency, causing the stock to end the quarter just shy of its all-time high. During Q2, AXP announced upgrades to its US Consumer and Business Platinum cards, which will be released later this year. AXP continues to tailor its products to capture the spending of younger consumers, with Millennials and Gen Z now accounting for 35% of total US consumer spending. We believe these investments will strengthen the company’s network effect and further lock young consumers into AXP’s ecosystem as their incomes and card spending continue to rise. Additionally, AXP is widening its use cases on the commercial side of the business with recent product launches tailored towards working capital and expense management. This should expand the number of transactions that AXP can participate in and increase switching costs with commercial card users.”
9. Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Holders: 78
Palantir Technologies Inc. (NASDAQ:PLTR) is one of the Best Stocks to Invest in for the Next 5 Years. On September 10, Palantir Technologies Inc. (NASDAQ:PLTR) and Hadean announced a partnership. Hadean’s leading-edge wargaming, command & control, and battlefield training products will be deployed on the company’s Foundry software. Hadean remains at the forefront of the UK’s defence tech ecosystem. This partnership reflects a further significant step in Palantir Technologies Inc. (NASDAQ:PLTR)’s relationship with the MoD and its support for the UK’s defence tech industry.
Elsewhere, Palantir Technologies Inc. (NASDAQ:PLTR) announced hosting its eighth AIPCon. Bank of America analyst Mariana Perez Mora remains optimistic about the company’s competitive advantage in turning data and AI into value-add use cases. While customers still struggle to unlock the meaningful operational benefits from out-of-the-box solutions, the firm expects Palantir Technologies Inc. (NASDAQ:PLTR)’s profitable growth to continue to outperform.
Carillon Tower Advisers, an investment management company, released its Q2 2025 investor letter. Here is what the fund said:
“Palantir Technologies Inc. (NASDAQ:PLTR), a leader in artificial intelligence (AI) software and services to governmental organizations, reported robust results and provided a strong outlook, as both the U.S. military and NATO purchased large contracts. Palantir also has had success penetrating non-military agencies of the U.S. government, as well as the commercial (corporate) side of the market with AI use cases that deliver quantifiable added value through its bootcamp product demonstrations.”
8. ServiceNow, Inc. (NYSE:NOW)
Number of Hedge Fund Holders: 106
ServiceNow, Inc. (NYSE:NOW) is one of the Best Stocks to Invest in for the Next 5 Years. On September 3, the US General Services Administration (GSA) announced a OneGov agreement with ServiceNow, Inc. (NYSE:NOW) to power the AI-first modernization for a new era of government. Notably, the ServiceNow AI Platform is expected to fuel workflow efficiencies by up to 30% considering the projections—utilising AI to streamline several business processes.
The Trump Administration remains focused on leveraging the power of AI in a bid to transform government operations and improve citizen services. The partnership with ServiceNow, Inc. (NYSE:NOW) will be supportive in streamlining government technology, fueling efficiency, and unlocking significant taxpayer savings.
As of June 30, 2025, ServiceNow, Inc. (NYSE:NOW)’s current remaining performance obligations came in at $10.92 billion, reflecting 24.5% YoY growth and 21.5% in constant currency. To give a brief perspective, cRPO refers to the contract revenue that will be recognized as revenue in the next 12 months.
Brown Advisory, an investment management company, released its Q2 2025 investor letter. Here is what the fund said:
“ServiceNow, Inc. (NYSE:NOW), a leader in enterprise workflow automation, outperformed during the quarter following strong earnings results that exceeded Wall Street expectations. Notably, growth in the company’s Federal Government segment was particularly strong, with Net New Annual Contract Value (NNAC) up 30% year-over-year—well above expectations, which had been modest for this area. Additionally, ServiceNow’s 2025 analyst day highlighted significant momentum in AI-related revenue.”
7. Oracle Corporation (NYSE:ORCL)
Number of Hedge Fund Holders: 124
Oracle Corporation (NYSE:ORCL) is one of the Best Stocks to Invest in for the Next 5 Years. On September 10, Bank of America upgraded Oracle Corporation (NYSE:ORCL)’s stock to “Buy” from “Neutral”, increasing the price target to $368 from $295. This comes after it posted impressive Q1 2026 results. As per the firm, while the visibility on returns from Oracle Corporation (NYSE:ORCL)’s rapidly rising capital expenditures remains limited, the demand signals from Oracle Cloud Infrastructure (OCI) business are too strong.
The analyst also highlighted that although the profitability of AI workloads is a key debate, it remains clear that Oracle Corporation (NYSE:ORCL) continues to capture share in the large and rapidly growing market for AI infrastructure. Oracle Corporation (NYSE:ORCL)’s total remaining performance obligations rose 359% YoY in both USD and constant currency to $455 billion. Furthermore, its total quarterly revenues increased 12% in USD and 11% in constant currency to $14.9 billion. Over the upcoming few months, the company anticipates signing up numerous additional multi-billion-dollar customers, and RPO is expected to exceed half a trillion dollars.
Loomis Sayles, an investment management company, released its Q2 2025 investor letter. Here is what the fund said:
“Oracle Corporation (NYSE:ORCL) is a leader in the enterprise software market with a strong market position in database, infrastructure and application software, and cloud-based software and services. We believe the company’s competitive advantages include its large and experienced direct sales force, a founder-driven management team that reinvests relentlessly to maintain a leading intellectual property (IP) portfolio and differentiated product suite, and a large installed base of clients with high switching costs where it consistently achieves renewal and retention rates in the mid-90% range. We believe Oracle is well positioned to benefit from the continuing growth in data storage and enterprise application software, as well as the shift to cloud-based solutions.
A long-term fund holding, Oracle reported strong quarterly financial results that were above management guidance and consensus expectations on most measures, including remaining performance obligation (RPO) bookings, a forward-looking measure of revenue. As a result, the company expects revenue growth to accelerate and raised its guidance to at least 16% revenue growth in its 2026 fiscal year, driven by cloud growth in excess of 40%. Oracle is the world leader in its largest business segment, enterprise database software used in customer on-premise IT environments. However, the company continues to focus on transitioning its business from a traditional on-premise, up-front software licensing and maintenance revenue model to a cloud computing subscription-based model where software revenue is recognized over the life of the client’s contract. While there has been pressure on year-over-year overall revenue comparisons during this transition, which started over a decade ago as Oracle released cloud versions of its applications and infrastructure software, as up-front license revenue shifts to subscription revenue, we have long expected this to lead to faster growth over time due to a higher customer lifetime value as the transition progresses. We believe the cloud model also allows Oracle to monetize its services and technology more efficiently and yield savings to the customer… (Click here to read the full text)
6. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 156
Broadcom Inc. (NASDAQ:AVGO) is one of the Best Stocks to Invest in for the Next 5 Years. On September 9, Bloomberg reported that Broadcom Inc. (NASDAQ:AVGO)’s CEO Hock Tan has a clause in a contract extension, which will bring hundreds of millions of dollars in stock compensation if the company reaches $120 billion in AI product sales by the year 2030. Bloomberg further highlighted that the executive will get 610,521 shares of Broadcom Inc. (NASDAQ:AVGO) if the AI revenue hits $90 billion by FY 2030. Furthermore, if the sales touch $120 billion, the company’s executive is poised for 300% of the payout.
The package strengthens Broadcom Inc. (NASDAQ:AVGO)’s mission to be tagged as the major player in the world of AI computing. On average, analysts polled by Bloomberg anticipate AI chip sales of ~$20 billion for 2025. Broadcom Inc. (NASDAQ:AVGO) achieved record Q3 2025 revenue backed by continued strength in custom AI accelerators, networking, and VMware. The company’s Q3 2025 AI revenue growth accelerated to 63% YoY to $5.2 billion.
Janus Henderson Investors, an investment management company, released its Q2 2025 investor letter. Here is what the fund said:
“Broadcom Inc. (NASDAQ:AVGO), another top contributor in AI infrastructure, has benefited from hyperscalers’ interest in a second source behind NVIDIA’s merchant silicon. The semiconductor company leads in custom silicon development, offering lower cost and better efficiency for specific workloads that don’t require maximum performance GPUs. The market also continues to evolve as custom silicon has gained share relative to merchant chips. Broadcom’s leadership position makes it a clear beneficiary of this shift.”
5. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 156
Apple Inc. (NASDAQ:AAPL) is one of the Best Stocks to Invest in for the Next 5 Years. On September 10, Rosenblatt analyst Barton Crockett lifted the price target on the company’s stock to $241 from $223, while keeping a “Neutral” rating, as reported by The Fly. As per the analyst, Apple Inc. (NASDAQ:AAPL) announced a solid update to its core iPhone lineup. There are notable improvements in camera capabilities and battery time. Notably, the firm assigned a higher multiple to Apple Inc. (NASDAQ:AAPL)’s shares to reflect increased confidence in its model post the launch event and Google’s antitrust ruling.
In Q3 2025, the company saw quarterly revenue of $94.0 billion, reflecting 10% YoY growth. Apple Inc. (NASDAQ:AAPL)’s installed base of active devices touched a new all-time high throughout all product categories and geographic segments. Apple Inc. (NASDAQ:AAPL) stated that iPhone revenue came in at $44.6 billion, up 13% YoY. This broad-based performance was due to the popularity of the iPhone 16 family, which was up double digits YoY compared to the 15 family.
RiverPark Advisors, an investment advisory firm and sponsor of the RiverPark family of mutual funds, released its Q2 2025 investor letter. Here is what the fund said:
“Apple Inc. (NASDAQ:AAPL): AAPL underperformed in Q2 despite reporting solid results. The company posted revenue of $95.4 billion and EPS of $1.65, with growth in both iPhone and Services. However, investor response to Apple’s AI roadmap, unveiled at WWDC in June, was mixed. While Apple introduced several new on-device AI features under its “Apple Intelligence” initiative, the market viewed the rollout as more incremental compared to peers.
Concerns around competitive positioning in generative AI, particularly relative to more aggressive strategies from other tech leaders, contributed to weakness in the stock. Additionally, soft China demand and FX headwinds continued to act as modest overhangs.
We believe Apple’s long-term value proposition remains compelling. Its installed base of over 2 billion active devices provides a foundation for recurring services growth and platform monetization. The company’s AI strategy, though cautious, emphasizes security and device performance, key differentiators that may resonate with consumers over time. With robust free cash flow and continued capital return, we remain confident in Apple’s positioning.”
4. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders (GOOGL): 219
Number of Hedge Fund Holders (GOOG): 178
Alphabet Inc. (NASDAQ:GOOGL) is one of the Best Stocks to Invest in for the Next 5 Years. On September 9, Bloomberg reported that Alphabet Inc. (NASDAQ:GOOGL)’s Google cloud computing division has up to $106 billion in commitments. These are from existing customer contracts that are yet to be fulfilled, reported Bloomberg while quoting the division’s CEO, Thomas Kurian. Notably, a minimum of 55%, or $58 billion, is anticipated to turn into revenue earned by the company over the upcoming 2 years as those services are delivered.
Bloomberg further reported that Alphabet Inc. (NASDAQ:GOOGL) is one of the tech companies focused on building out data center capacity to cater to increased demand for AI processing. In Q2 2025, Google Cloud revenues rose 32% to $13.6 billion, led by growth in Google Cloud Platform (GCP) throughout core GCP products, AI Infrastructure, and Generative AI Solutions. Cloud had a healthy Q2 2025, which was reflected by strong growth in revenues, backlog, and profitability. Its annual revenue run rate is now over $50 billion.
SaltLight Capital, an investment management company, has released its Q2 2025 investor letter. Here is what the fund said:
“To illustrate our approach to navigating these uncertainties, we turn to our recent investment in Alphabet Inc. (NASDAQ:GOOGL), which exemplifies balancing innovation risks with established strengths.
Innovator’s Dilemma: Google is grappling with an Innovator’s Dilemma as it protects its $200 billion search business from a significant technological shift. To put it plainly, Google Search’s primary purpose is to act as a ‘match-maker’, guiding users to the best source for their query on the open web. However, artificial intelligence is changing this role, with AI handling much of the searching, synthesis, and answering for the user, reducing the need to visit destination websites to gather information. A natural tension is emerging.
Humans naturally gravitate towards the path of least resistance, increasingly depending on AI to undertake cognitive tasks for them. This development poses challenges for content providers and for Google itself, which derives advertising revenue from these interactions…” (Click here to read the full text)
3. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 235
NVIDIA Corporation (NASDAQ:NVDA) is one of the Best Stocks to Invest in for the Next 5 Years. On September 9, William Blair analyst Sebastien Naji maintained the bullish stance on the company’s stock, giving a “Buy” rating. The analyst’s rating is backed by a combination of factors demonstrating NVIDIA Corporation (NASDAQ:NVDA)’s strategic advancements and competitive positioning. The company’s recent announcement of Rubin NVL144 CPX rack strengthens its ability to innovate with a new inference-focused architecture.
This architecture leverages distinct GPUs designed for efficient data ingestion and response generation, highlighting NVIDIA Corporation (NASDAQ:NVDA)’s vertical integration advantage, opines the analyst. By focusing on creating comprehensive computing systems instead of just individual components, NVIDIA Corporation (NASDAQ:NVDA) remains well-placed to deliver competitive AI solutions, added Naji. The NVIDIA Rubin CPX GPU has been purpose-built to handle million-token coding and generative video applications.
Brown Advisory, an investment management company, released its Q2 2025 investor letter. Here is what the fund said:
“Information Technology was the largest detractor from relative performance during the quarter. The strategy’s underweight to NVIDIA Corporation (NASDAQ:NVDA) and not owning Broadcom (AVGO) were the two largest detractors during the period. NVIDIA (NVDA), a market leader in advanced graphics processing units, rebounded after a first quarter marked by a lower gross margin outlook, which was attributed to short-term complexities in ramping up Blackwell production, and a broad-based decline in AI infrastructure stocks. The company’s most recent quarterly earnings were modestly ahead of consensus expectations, and management expects gross margins to increase by year-end as yield and throughput on Blackwell racks continue to improve.”
2. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 260
Meta Platforms, Inc. (NASDAQ:META) is one of the Best Stocks to Invest in for the Next 5 Years. On September 9, analyst Brian Nowak from Morgan Stanley maintained a “Buy” rating on the company’s stock, keeping the price objective at $850.00. The analyst’s rating is backed by a combination of factors demonstrating Meta Platforms, Inc. (NASDAQ:META)’s growth potential and resilience. One of the critical reasons is the expected $600 billion investment in the US by 2028, which has already been factored into the financial models.
Furthermore, the analyst noted that this investment is unlikely to negatively impact EPS or FCF. This is because it is aligned with Meta Platforms, Inc. (NASDAQ:META)’s operational and capital expenditure plans, mainly in the US, where many of its major offices and R&D efforts are located. The analyst also highlighted the importance of Meta Platforms, Inc. (NASDAQ:META)’s ongoing advancements in GPU-enabled machine learning, which can fuel significant improvements in user engagement and revenue. The analyst believes that expansion of models and recommendation tools, together with enhancements in video and content discoverability, are the growth drivers over the long term.
First Eagle Investments, an investment management company, released its Q2 2025 investor letter. Here is what the fund said:
“Meta Platforms, Inc. (NASDAQ:META)—the parent company of Facebook, Instagram and WhatsApp, among other social-media platforms—reported strong revenue and earnings growth during the quarter, driven by increases in both ad impressions and price per ad. The company continued to aggressively invest and hire in AI, even as it develops its core advertising businesses. We believe these results demonstrate Meta’s ability to focus on both profitability and efficiency in conjunction with ongoing investments in the core ad business, the metaverse and other AI applications.”
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 294
Microsoft Corporation (NASDAQ:MSFT) is one of the Best Stocks to Invest in for the Next 5 Years. On September 10, China Merchants Securities began coverage on the company’s stock with a “Buy” rating and a price objective of $585.00. The firm noted Microsoft Corporation (NASDAQ:MSFT)’s robust position in the cloud infrastructure, along with AI capabilities, as key factors placing it to further penetrate the SaaS market.
Furthermore, the firm opines that Microsoft Corporation (NASDAQ:MSFT)’s flagship products, such as Windows and Office, remain highly embedded in businesses globally. The company’s trusted brand and extensive enterprise relationships support a significant customer base throughout industries for cloud migration. As per the firm, by embedding AI-powered features and offering integrated SaaS suites, Microsoft Corporation (NASDAQ:MSFT) can expand its offerings with its existing customers. The company closed FY 2025 with a strong quarter, characterized by Microsoft Cloud revenue reaching $46.7 billion, a rise of 27% YoY.
Brown Advisory, an investment management company, released its Q2 2025 investor letter. Here is what the fund said:
“Microsoft Corporation (NASDAQ:MSFT), a global leader in software and cloud services, saw its shares trade higher in the second quarter following an earnings report and guidance update that exceeded consensusThe expectations. The company delivered strong performance across all business segments, with particularly robust growth in both core and AI-related Azure services. Management’s outlook for Azure remains especially positive, citing rising customer demand for AI solutions.”
While we acknowledge the potential of MSFT to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than MSFT and that has 100x upside potential, check out our report about this cheapest AI stock.
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