As the markets brace for Fed Chair Jerome Powell’s speech at Jackson Hole, uncertainty continues to hang over the direction of interest rates and the broader markets. In an interview with CNBC on August 19, Mohamed El-Erian, Chief Economic Adviser at Allianz, said that Powell is likely to “maintain maximum policy optionality,” a stance that “the White House doesn’t want to hear”, and neither do many in the markets.
But for long-term investors, this ambiguity is not a bug; it’s a feature. Periods of macroeconomic uncertainty often expose the difference between hype and real growth. While short-term traders may focus on Fed speak, patient investors should concentrate on durable companies with pricing power, scalable business models, and room for growth.
Here is a list of 11 best stocks to invest in for long-term growth that do just that. It highlights companies that are likely to see robust bottom-line growth regardless of rate path noise. As El-Erian reminds us, the Fed may be “pushed on the labor market” and the new “monetary framework,” but great businesses outperform policy pivots.
A close-up of a financial analyst in a modern office while reviewing long-term investment opportunities.
Our Methodology
To identify the 11 best stocks to invest in for long-term growth, we included only those stocks that have an average expected EPS growth of at least 25% over the next 3-5 years, according to Wall Street estimates. We sorted the final list in ascending order of hedge fund sentiment as of Q2 2025.
Note: All data was recorded on August 22, 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
11 Best Stocks to Invest in for Long Term Growth
11. Microchip Technology Incorporated (NASDAQ:MCHP)
EPS Forward Long Term Growth (3-5 Year CAGR): 29.09%
Number of Hedge Fund Holders: 54
Microchip Technology Incorporated (NASDAQ:MCHP) is one of the best stocks to invest in for long-term growth. On August 8, Raymond James analyst Melissa Fairbanks maintained her Strong Buy rating on Microchip Technology Incorporated (NASDAQ:MCHP). Fairbanks also increased her price target for the company from $65 to $75, a 13.39% implied upside from the current price of $66.14.
The company reported its Q1 FY 2026 earnings on August 7. Its EPS came in at $0.27 per share, representing a solid 12.97% earnings surprise. Fairbanks cited solid Q1 results, with both earnings and outlook ahead of expectations.
The mid-single digit guidance, quarter-over-quarter for the current quarter, reflects a demand-driven recovery, rather than an inventory restocking dynamic, Fairbanks noted. The chip company ceased operations in its fabrication facility in Arizona in May to tackle the high inventories.
The company is developing solutions tailored for AI at the edge, which don’t consume a lot of power. Microchip is also developing advanced solutions for AI in data centers.
Microchip Technology Incorporated (NASDAQ:MCHP) is trading at a reasonable forward PEG of 1.55x, compared to the sector median of 1.83x.
10. Toast, Inc. (NYSE:TOST)
EPS Forward Long Term Growth (3-5 Year CAGR): 29.00%
Number of Hedge Fund Holders: 67
Toast, Inc. (NYSE:TOST) is one of the best stocks to invest in for long-term growth. On August 6, JP Morgan maintained its Neutral rating on Toast, Inc. (NYSE:TOST), but increased its price target for the stock from $42 to $52. The new price target represents a solid 19.2% upside from the current market price of $43.62. JP Morgan cited strong Q2 earnings, but remains cautious with its Neutral rating due to the stock’s valuation.
The company reported a revenue of $1.55 billion for the quarter, a 25% year-over-year growth, and beat Wall Street estimates of $1.52 billion. Toast has also been steadily improving its margins over the last few quarters. The net margin for Q2 stood at 5.16%, compared to 1.13% for the same quarter last year. The company reported an EPS of $0.249, handily beating analyst estimates of $0.225.
The company’s growth can be attributed to a number of factors. It reported a record 8,500 net new locations added, expanding its base to 148,000 locations. The company is spreading its wings globally, as it started operations in Australia, its fourth market. The company also saw deeper client engagement through its new AI features like ToastIQ, which helps enhance restaurant operations through automated workflows.
Toast provides a one-stop shop, cloud-based software and hardware platform for restaurants. These platforms help clients to manage online ordering, point-of-sale payments, payroll, and marketing, among other operations under one system.
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