In this article, we will take a look at 10 High Growth High Margin Stocks to Buy Now.
U.S. stock markets have struggled to come out of their recent slump, with the S&P 500 remaining virtually unaffected over the previous month as an elevated level of increases from areas other than technology limit advances for the benchmark and drags on the market’s overall performance. That said, the market’s general performance in 2026 has been defined by a constant shift into non-tech industries like consumer staples, industrials, and energy, most of which have posted gains exceeding 4% over the second week of February along with double-digit percentage gains since the beginning of the year.
In addition, technology stocks pushed the S&P 500 to soar on February 9, with the Dow Jones Industrial Average hitting all-time highs. The improvements come after the main indexes recovered on February 6, with the Dow surpassing 50,000 for the very first time, after experiencing significant losses earlier that week.
Sam Stovall of CFRA Research discussed the tech industry’s forward price-to-earnings ratio in relation to its average over the last five years. He said the following:
“We went from a 17% premium to an 8% discount. You could say, ‘Well, gee, that’s pretty good, and so maybe it’s time not to bail out on technology just yet.”
Our Methodology
For this list, we used stock screeners to compile a list of companies with a trailing twelve-month (TTM) operating margin above 25%, signaling strong operational efficiency and pricing power. This list was further filtered for companies that boast a 5-year revenue growth rate of at least 20%, thus indicating solid growth. In addition, we ranked these stocks based on the number of hedge funds invested in each of them as of Q3 2025.
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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
10. Monolithic Power Systems, Inc. (NASDAQ:MPWR)
Operating Margin (TTM): 26.11%
5-Year Revenue Growth Rate: 27.00%
Number of Hedge Fund Holders: 42
Monolithic Power Systems, Inc. (NASDAQ:MPWR) ranks among the best high growth high margin stocks to buy now. On February 6, KeyBanc boosted its price target for Monolithic Power Systems, Inc. (NASDAQ:MPWR) to $1,500 from $1,300, retaining an Overweight rating on the company’s shares. The boost comes after the company’s fourth-quarter results and first-quarter forecasts, which KeyBanc defined as “strong”. Notably, Monolithic Power Systems, Inc. (NASDAQ:MPWR) raked in a record quarterly revenue of $751.2 million, exceeding expectations of $740.23 million.
KeyBanc stated that the company’s fourth-quarter momentum was prominent in the Data Center division, which produced substantial year-over-year growth spanning Enterprise Data, Computing & Storage, and Communications.
Given the strong market demand and share gains, the firm noted that Monolithic Power Systems, Inc. (NASDAQ:MPWR) has raised its 2026 Enterprise Data growth expectation from an earlier projection of 35% to more than 50%, though it considers this goal to be conservative.
Monolithic Power Systems, Inc. (NASDAQ:MPWR) produces and markets small, ultra-efficient, user-friendly power management systems for various industries, including computers, automotive, data centers, and communications.
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