10 Stocks with Best Earnings Growth for the Next 3 Years

In this article, we will take a look at the stocks with the best earnings growth for the next 3 years.

Earnings growth has long remained one of the most powerful drivers of shareholder returns in the long term. While temporary market moves impact the sentiment and stock price, it’s the earnings profile that creates lasting value. As investors look toward the next couple of years, the focus is shifting to companies that demonstrate expansion, solid fundamentals, and innovation.

On June 16, Reuters published an article titled “The era of pure passive investing is over,” highlighting that investing in equities appeared relatively straightforward for much of the last 40 years. This was driven by lower corporate taxes, globalization, and a decline in interest rates, the article added.

However, the publication noted that after last year’s rise in tariffs and AI, four key structural tailwinds that supported asset values have now weakened. These include continuously declining interest rates, falling corporate taxes, high government debt tolerance, and natural investing demand.

The article states that the effects of AI and other structural shifts are reshaping the real economy rapidly, adding that the results for investors are already visible. Since 2022, intra-stock correlations in the S&P 500 have declined sharply.

Keeping this outlook in mind, we have compiled a list of 10 stocks with the best earnings growth for the next 3 years.

Our Methodology

For this article, we considered stocks with market capitalizations exceeding $2 billion. After this initial screening, we filtered for stocks with both forecasted EPS growth over the next 3 years and a return on equity of over 20%. We shortlisted stocks based on the number of hedge funds holding positions in these stocks. We limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. These stocks were then ranked in ascending order by the number of hedge fund holdings.

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. Insider Monkey’s quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).

10. Seagate Technology Holdings plc (NASDAQ:STX)

Number of Hedge Fund Holders: 93

On June 12, JPMorgan raised the price target on Seagate Technology Holdings plc (NASDAQ:STX) to $920 from $775 and reaffirmed an Overweight rating. An optimistic outlook on pricing, leading to expected incremental margins in the quarters ahead, has resulted in higher earnings estimates for the HDD companies. No wonder the company is among the stocks with the best earnings growth for the next 3 years.

Although the companies have already turned positive on YoY pricing for the first time in the March quarter, JPMorgan anticipates further acceleration in the coming quarters, maintaining sequential price increases in the low- to mid-single digit range.

Later on June 15, Morgan Stanley also lifted the price target on Seagate Technology Holdings plc (NASDAQ:STX) to $1,035 from $767 and reiterated an Overweight rating. The firm said its Asia checks from the past three years point to a hard disk drive cycle that is gaining further momentum, with greater shortages anticipated through at least CY28. The firm also notes that HDD pricing is “clearly, and meaningfully, strengthening.”

Seagate Technology Holdings plc (NASDAQ:STX) is an American company providing data storage technology and infrastructure solutions. The company’s core offerings include mass capacity storage products, legacy applications, and external storage solutions.

9. Palantir Technologies Inc. (NASDAQ:PLTR)

Number of Hedge Fund Holders: 96

On June 16, Wolfe Research upgraded Palantir Technologies Inc. (NASDAQ:PLTR) to Peer Perform from Underperform after resuming coverage. According to the firm, the company’s AI platform, ontology, and forward-deployed engineers provide a strong foundation to turn AI interest into “scaled enterprise adoption.”

The company’s current valuation already reflects much of its strengthened growth and margin outlook, the firm asserted, adding that Palantir Technologies Inc. has one of the strongest product-market fits today. With the largest and fastest growth rates, the company is well-positioned as one of the strongest applied enterprise AI software companies in the industry.

Back on June 5, Rosenblatt reaffirmed a Buy rating and a price target of $225 on Palantir Technologies Inc.. This comes after the company’s AIPCon 10 event, at which management announced several customer engagements and an expanded partnership with Google Cloud. According to the firm, the company appears as one of the most crucial components of the enterprise AI value chain. Thus, making it one of the stocks with the best earnings growth for the next 3 years.

Palantir Technologies Inc., incorporated in 2003, is a Florida-based software platform provider for the intelligence community, supporting counterterrorism investigations and operations.

8. Nu Holdings Ltd. (NYSE:NU)

Number of Hedge Fund Holders: 104

On June 15, Citi trimmed the price target on Nu Holdings Ltd. (NYSE:NU) from $18 to $13, while downgrading the stock to Neutral from Buy. According to the firm, the company’s growth will come at the cost of monetization and profitability due to its credit-dependent nature. The exposure to credit cards and personal loans increases its “vulnerability to a crowding-out effect on borrowers’ repayment capacity,” the firm added.

Back on June 3, Susquehanna downgraded Nu Holdings Ltd. to Neutral from Positive and cut the price target from $18 to $13. In the first quarter, operating margins dropped 760 basis points to 19.2%, given the credit card push in Brazil and the Mexico expansion. The leadership restructuring, with the departure of Brazil-based CFO Guilherme Lago and the hiring of Visa’s North America CEO Rob Livingston, will accelerate the company’s global expansion, the firm said. Thus, making NU one of the stocks with the best earnings growth for the next 3 years.

The firm also flagged some concerns. As noted by Susquehanna, the company’s margins have been under strain due to multiple factors that show little sign of easing in the near term. The firm believes that Nu Holdings Ltd. is entering another heightened investment cycle, which will weigh on the shares until there is greater visibility into the outlook.

Nu Holdings Ltd., founded in 2013, is a Brazilian provider of a digital banking platform offering spending, mobile payments, transactional, savings, and investing solutions.

7. Sandisk Corporation (NASDAQ:SNDK)

Number of Hedge Fund Holders: 114

On June 8, Vijay Rakesh from Mizuho raised estimates for SanDisk Corporation (NASDAQ:SNDK) following the quarterly AI application-specific integrated circuit roadmap call. The firm projects tensor processing units to reach 35 million in 2028, which is roughly 8-times the 4.3 million units in 2026. The analyst lifted the price target on the company to $2,200 from $1,825 and reaffirmed an Outperform rating.

On the same day, Cantor Fitzgerald also lifted the price target on Sandisk Corporation to $2,900 from $1,800 and reiterated an Overweight rating. The firm believes the market has entered a new AI-driven memory paradigm, with sustained tailwinds suggesting the trade is only in the mid-innings.

Similarly, Wamsi Mohan from BofA elevated the price target on the company from $1,550 to $2,100 and maintained a Buy rating on June 8. While adjusting its FY27 revenue and EPS estimates to $44 billion and $188, respectively, the firm highlighted strong trends in pricing and sustained demand. With this level of optimism from analysts, SanDisk Corporation is among the stocks with the strongest earnings growth over the next 3 years.

SanDisk Corporation is a California-based company that provides data storage devices and solutions based on NAND flash technology. Founded in 2024, the company offers solid-state drives and flash-based embedded storage products.

6. Lam Research Corporation (NASDAQ:LRCX)

Number of Hedge Fund Holders: 123

On June 15, Oppenheimer elevated the price target on Lam Research Corporation (NASDAQ:LRCX) to $400 from $330 and reaffirmed an Outperform rating. According to the firm, the Lam bus tour strengthened confidence that AI-related WFE growth potential remains underappreciated in forecasts.

Oppenheimer said that demand in 2026 could see further upside, despite cleanroom constraints and “pretty full” slots. This is in line with the third quarter’s WFE increase to over $140 billion with upside bias. The bigger story may be ahead, with 2027 appearing stronger as the firm sees potential for WFE growth to surpass 30% toward $200 billion. With this potential, LRCX is among the stocks with the best earnings growth for the next 3 years.

Several other analysts have revisited their stance on Lam Research Corporation. On June 11, Tom O’Malley from Barclays boosted the price target on the company to $335 from $275 and reiterated an Overweight rating. According to the firm, the capex cycle is “much stronger across the board.” Although the “world has moved to 2028 already,” over $200 billion in sales looks probable in the upcoming year. A day earlier, Cantor Fitzgerald analyst C.J. Muse also lifted the price target on the company from $320 to $425 and maintained an Overweight rating.

Lam Research Corporation, founded in 1980, is a California-based company specializing in semiconductor processing equipment used in the fabrication of integrated circuits.

5. Eli Lilly and Company (NYSE:LLY)

Number of Hedge Fund Holders: 132

On June 15, Eli Lilly and Company (NYSE:LLY) shared new data from the Phase 1 AJX-101 study. The study showed that an investigational type II JAK2 inhibitor delivered an “encouraging” safety profile, demonstrating clinical activity in patients living with myelofibrosis who have failed a type I JAK2 inhibitor.

The therapy is aimed at selectively binding the type II conformation of the JAK2 kinase, thus providing improved efficacy over current solutions. It will also offer a new option for patients who develop resistance to type I JAK2 inhibitors. This addition follows the completion of the acquisition.

Earlier on June 9, Jefferies lifted the price target on Eli Lilly and Company to $1,350 from $1,330 and reiterated a Buy rating. This comes after the company reported full data from retatrutide’s TRIUMPH-1 obesity study and TRANSCEND-T2D-1 study. Despite some safety concerns, which the firm believes are manageable, the retatrutide’s overall profile “will be difficult to beat,” the firm said. Indeed, LLY is among the stocks with the best earnings growth for the next 3 years.

​Eli Lilly and Company is an Indiana-based company specializing in human pharmaceutical products. Founded in 1876, the company offers products for cardiometabolic health, oncology, immunology, and migraine prevention.

4. ASML Holding N.V. (NASDAQ:ASML)

Number of Hedge Fund Holders: 133

On June 4, Barclays lifted the price target on ASML Holding N.V. (NASDAQ:ASML) to EUR 1,900 from EUR 1,575 and reaffirmed an Overweight rating. The analyst believes that the company’s demand continues to expand, saying that hiring data strengthens capacity, with the ramp-up already underway at key supplier Zeiss. Having said that, the firm’s forecasts surpass consensus estimates for 2027 and 2028.

Didier Scemama, an analyst at BofA, views the company’s extreme ultraviolet lithography capacity to extend beyond 90 units by 2027. This is mainly because of lead time and assembly efficiencies. While seeing China demand rebound in the next year, the analyst boosted the price target on ASML Holding N.V. to EUR 1,921 from EUR 1,710 and reiterated a Buy rating on the same day.

Although the company has downside potential based on the 1-year median price target, ASML Holding N.V. has continuously outperformed the benchmark over the last five years. This, along with its strong ROE (ttm) of 52.24%, makes ASML one of the stocks with the best earnings growth for the upcoming 3 years.

ASML Holding N.V. is a Netherlands-based lithography solutions provider for advanced semiconductor equipment systems. Founded in 1984, the giant’s core offerings include lithography, metrology, and inspection systems.

3. Applied Materials, Inc. (NASDAQ:AMAT)

Number of Hedge Fund Holders: 138

On June 15, Applied Materials, Inc. (NASDAQ:AMAT) unveiled two new chipmaking systems to address a new challenge in leading-edge semiconductor manufacturing. The systems will not only help achieve precision processing in deep and narrow 3D structures, but will also expand scaling in logic and memory.

With AI computing on the rise, the market has shifted towards advanced 3D device architectures. This includes gate-all-around transistors and high-layer-count 3D NAND. The conventional deposition and etch processes lack the ability to distribute materials evenly as features become deeper and narrower in vertical structures. This is where the company’s newly launched systems come in.

As said by Dr. Prabu Raja, President of the Semiconductor Products Group,

“With our latest deposition and selective etch systems, we are delivering differentiated capabilities that help customers overcome critical scaling barriers and accelerate the next wave of innovation in logic and memory.”

Despite its 1-year downside potential based on the median price target, Applied Materials, Inc. has a solid quarterly earnings growth (YoY) of 31.30%. The company has continuously outperformed the S&P 500 over the past five years. This reinforces its position among the stocks with the best earnings growth for the next 3 years.

Applied Materials, Inc. is a California-based provider of materials engineering solutions, equipment, services, and software. Founded in 1967, the company operates through Semiconductor Systems and Applied Global Services segments.

2. Uber Technologies, Inc. (NYSE:UBER)

Number of Hedge Fund Holders: 153

Ivan Feinseth, an analyst at Tigress Financial, elevated the price target on Uber Technologies, Inc. (NYSE:UBER) to $115 from $110 on June 12. In a research note, the analyst said that the company’s long-term potential is supported by scaled network effects in mobility and delivery, in addition to opportunities in high-margin segments. The firm maintains a Buy rating on the shares.

What makes the case stronger for Uber Technologies, Inc. is its GO-GET strategy, which is based on capital-light partnerships and an AI-driven platform, the firm highlighted, adding that this approach will support Uber One engagement. The company is also engaged in boosting unit economics, scaling Uber AI Solutions, and driving AI-powered product innovation, Tigress Financial outlined.

Overall, 88% of analysts are bullish on the company, with 11% neutral, and the remaining 2% bearish. With a Return on Equity (ttm) of 35.31%, Uber Technologies, Inc. has secured a spot in our list of stocks with the best earnings growth for the next 3 years.

Uber Technologies, Inc. is a California-based technology company that operates a global platform for ride-hailing, food delivery, and freight logistics services. Founded in 2009, the company has three main segments: Mobility, Delivery, and Freight.

1. Micron Technology, Inc. (NASDAQ:MU)

Number of Hedge Fund Holders: 154

On June 11, TheFly reported that Daiwa significantly lifted the price target on Micron Technology, Inc. (NASDAQ:MU) to $1,600, up from $700, and reaffirmed a Buy rating. This implies an upside potential of nearly 49% from the current level.

On the same day, Wolfe Research raised its forecasts for the company to better reflect an approximately 45% price hike in fiscal Q3, in addition to higher pricing throughout the current year. The firm also raised CY27 estimates due to increased HBM pricing. Wolfe Research now expects $226.5 billion in revenue and $135 in EPS in 2027. No wonder Micron Technology, Inc. is among the stocks with the best earnings growth for the next 3 years.

According to the firm, suppliers and key customers are signing long-term agreements for available supply over the years ahead. As suppliers try to close the gross margin gap, HBM pricing is set to rise, Wolfe Research noted. With that said, the firm elevated the price target on Micron Technology, Inc. to $1,250 from $550 and maintained an Outperform rating.

Micron Technology, Inc. is an Idaho-based company specializing in memory and storage products. Incorporated in 1978, the company operates through four segments, including the Cloud Memory Business Unit and Core Data Center Business Unit.

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