In this article, we will look at the 11 Best Strong Buy Growth Stocks to Buy According to Hedge Funds.
On January 16, Cathie Wood, Ark Invest CEO and CIO, appeared on CNBC’s ‘Squawk Box’ to talk about the 2026 outlook and the latest market trends.
She stated that one of the significant things the last few years have taught her is that while inflation is clearly coming down, it is stuck in the reported numbers. A lot of people, according to her, are wondering why this trend is still persisting with the market near record high valuations, and that makes for a setup for a correction. Looking at other periods in history, as in the 90s and early 2000s, we had very strong markets as the multiples moved down. Therefore, last year taught her that we must assume that valuations are going to compress, and she does assume that for the bottom-up analysis for every company.
READ ALSO: 12 Best Stocks to Buy in 2026 for Beginners AND 13 Best Long Term Growth Stocks to Buy According to Hedge Funds.
Wood further expressed excitement over the inflation outlook, thanks to oil prices, housing prices, and productivity gains, with unit labor costs coming down dramatically. While they were up 1.2% on a year-over-year basis, they were negative in the last quarter reported. Therefore, there are several deflationary pressures. She also cited technology in this backdrop, stating that her focus is exclusively on technologically-enabled innovation, and that each of the five major platforms is very deflationary in its impact. Wood thus believes that prices are going to be on the low side of inflation expectations.
With these trends in view, let’s look at the best strong buy growth stocks to buy according to hedge funds.
Our Methodology
We used stock screeners to find companies that satisfied the following criteria:
- EPS Diluted Growth (YoY) above 20%.
- EPS Diluted Growth (FWD, 1-year estimate) above 20%.
- Analyst Consensus Rating of Strong Buy.
We then selected the top 11 stocks with the highest number of hedge fund holders, as of Q3 2025. We sourced the hedge fund sentiment data from Insider Monkey’s database. The list is sorted in ascending order of hedge fund holders.
Note: All data was recorded on January 16.
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).
11 Best Strong Buy Growth Stocks to Buy According to Hedge Funds
11. Krystal Biotech, Inc. (NASDAQ:KRYS)
Number of Hedge Fund Holders: 26
Krystal Biotech, Inc. (NASDAQ:KRYS) is one of the best strong buy growth stocks to buy according to hedge funds. On January 12, Citi lifted the price target on Krystal Biotech, Inc. (NASDAQ:KRYS) to $336 from $320 and maintained a Buy rating on the shares. The rating update came after Krystal Biotech, Inc. (NASDAQ:KRYS) announced selected preliminary unaudited 2025 financial results on January 11, including fourth quarter and full year 2025 VYJUVEK® net product revenue.
For fiscal Q4 2025, the company announced that it expects net product revenue for VYJUVEK to be between $106 million and $107 million, based on preliminary unaudited financial information. VYJUVEK’s net revenue for the full year 2025 is anticipated to be between the range of $388 million and $389 million. Krystal Biotech, Inc. (NASDAQ:KRYS) further reported that cash, cash equivalents, and investments are around $955 million as of December 31, 2025.
The company clarified that the preliminary unaudited results are based on the initial analysis of operations conducted by the management for the year ended December 31, 2025, and are subject to adjustment. Krystal Biotech, Inc. (NASDAQ:KRYS) is set to report its full financial results for fiscal Q4 and full year 2025 in February 2026.
Krystal Biotech, Inc. (NASDAQ:KRYS) is a biotechnology company that develops and commercializes pharmaceutical products and offers the product VYJUVEK, which is a topical gel that treats wounds in adult and pediatric patients (from birth) with dystrophic epidermolysis bullosa (DEB).
10. Sportradar Group AG (NASDAQ:SRAD)
Number of Hedge Fund Holders: 31
Sportradar Group AG (NASDAQ:SRAD) is one of the best strong buy growth stocks to buy according to hedge funds. Wells Fargo cut the price target on Sportradar Group AG (NASDAQ:SRAD) to $26 from $30 on January 15 and maintained an Overweight rating on the stock. The firm told investors that it is slightly tweaking estimates on the company as it takes a more conservative approach to forward-year variable contract upside and IMG benefit.
Sportradar Group AG (NASDAQ:SRAD) also received a rating update from Truist Financial on January 13, which reiterated a Buy rating on the stock and set a price target of $20.35. In another development, Citizens cut the price target on Sportradar Group AG (NASDAQ:SRAD) to $34 from $36 on January 5 and maintained an Outperform rating on the shares.
The firm told investors that the past two years have highlighted the ongoing volatility in the sector, brought about by competition, regulation, and game outcomes. Despite that, the current valuations appear overly punitive, according to Citizens. It added that with average multiples depressed compared to historical averages, companies meeting or exceeding quarterly estimates with cash flow improvements are likely to drive upside.
Sportradar Group AG (NASDAQ:SRAD) provides sports betting and entertainment products and services, with its products including Betting Technology & Solutions and Sports Content, Technology & Services.
9. Guidewire Software, Inc. (NYSE:GWRE)
Number of Hedge Fund Holders: 72
Guidewire Software, Inc. (NYSE:GWRE) is one of the best strong buy growth stocks to buy according to hedge funds. On January 13, Guidewire Software, Inc. (NYSE:GWRE) and Vaudoise announced that Vaudoise has become the first Swiss insurer to go-live on the Guidewire Cloud Platform, with the company successfully implementing Guidewire ClaimCenter and continuing the integration of Guidewire PolicyCenter. The adoption of the Guidewire Cloud Platform would allow Vaudoise to join a global community of insurers with a focus on insurance excellence, equipped with core modernization from a secure, scalable, and rapidly updateable cloud delivery model.
Arno Suess, Head of P&C Claims at Vaudoise, stated that the milestone has helped set a new benchmark for the industry, allowing it to process motor insurance claims faster with increased automation and fully digital processes through the Guidewire Cloud Platform.
In another development, Wells Fargo cut the price target on Guidewire Software, Inc. (NYSE:GWRE) to $250 from $275 on January 8 and maintained an Overweight rating on the shares, stating that it believes AI to still be “the name of the 2026 game”. The firm sees three primary ways to play the game: innovation, infrastructure, and incumbents. It acknowledged that while adoption is likely to be uneven, secular trends will ultimately drive 2026 performance. Guidewire Software, Inc. (NYSE:GWRE) also received a rating update from RBC Capital on January 5, which reiterated a Buy rating on the shares and set a price target of $300.
Guidewire Software, Inc. (NYSE:GWRE) provides a technology platform that combines core systems of record with analytics, digital, and AI applications. The company’s offered suite of products includes the following: Guidewire InsuranceSuite and Guidewire InsuranceNow.
8. Arista Networks, Inc. (NYSE:ANET)
Number of Hedge Fund Holders: 92
Arista Networks, Inc. (NYSE:ANET) is one of the best strong buy growth stocks to buy according to hedge funds. Arista Networks, Inc. (NYSE:ANET) announced on January 15 that it is set to release its financial results for the quarter ended December 31st, 2025, after the close of U.S. markets on February 12th, 2026. For reference, Arista Networks, Inc. (NYSE:ANET) announced in its fiscal Q3 2025 results that it expects revenue in the range of $2.3 billion to $2.4 billion for fiscal Q4 2025, along with a non-GAAP gross margin of 62-63% and a non-GAAP operating margin of 47-48%.
Prior to the earnings release for fiscal Q4 2025, Arista Networks, Inc. (NYSE:ANET) received several rating updates from analysts. Melius Research maintained a Buy rating on the stock on January 5 and set a $200 price target. The same day, Arista Networks, Inc. (NYSE:ANET) was upgraded to Overweight from Neutral by Piper Sandler, with the firm lifting the price target on the stock to $159 from $145.
It told investors that 2026 is positioned as a “Year of Refresh”, with growing hyperscaler and AI exposure, enterprise investment, and a conservative setup at a reasonable valuation, all enhancing model visibility. The firm added that while concerns regarding share shifts to whitebox and Nvidia (NVDA) and the broader capex/AI cycle exist, Arista Networks, Inc. (NYSE:ANET) appears to be holding share, deriving benefit from typically lagged capex trends, and gaining large enterprise customers.
Arista Networks, Inc. (NYSE:ANET) develops, markets, and sells cloud networking solutions. The company’s solutions include EOS, a set of network applications, and Gigabit Ethernet switching and routing platforms. It also offers various product categories, including Core, Cognitive Adjacencies, and Network Software and Services.
7. ServiceNow, Inc. (NYSE:NOW)
Number of Hedge Fund Holders: 104
ServiceNow, Inc. (NYSE:NOW) is one of the best strong buy growth stocks to buy according to hedge funds. On January 14, Evercore ISI reiterated a Buy rating on ServiceNow, Inc. (NYSE:NOW) with a price target of $225. The same day, Oppenheimer also maintained a bullish outlook on the stock, maintaining a Buy rating with a $200 price target.
In another development, Citi maintained a Buy rating on ServiceNow, Inc. (NYSE:NOW) on January 12 and set a price target of $250.60. The firm expects a solid upcoming quarter, supported by factors such as early indications of a strong quarter-end, healthier sales pipelines going into 2026, and signs of incremental budget releases. It anticipates the rising contributions from AI-related offerings and consumption-based revenue next year, along with a solid fiscal Q4 finish, to propel a significant turning point for ServiceNow, Inc. (NYSE:NOW).
Citi further stated that the market is pricing the shares at unusually low valuation levels at present, especially when compared to previous cycle troughs, and this fails to provide a complete picture of the company’s fundamental trajectory.
ServiceNow, Inc. (NYSE:NOW) offers an AI platform for business transformation, boosting productivity and maximizing business outcomes. Its intelligent platform, Now Platform, provides end-to-end workflow automation for digital businesses. Now Platform functions as a cloud-based solution embedded with AI and ML.
6. Micron Technology, Inc. (NASDAQ:MU)
Number of Hedge Fund Holders: 105
Micron Technology, Inc. (NASDAQ:MU) is one of the best strong buy growth stocks to buy according to hedge funds. On January 15, Barclays lifted the price target on Micron Technology, Inc. (NASDAQ:MU) to $450 from $275 and maintained an Overweight rating on the shares, telling investors that it adjusted price targets and ratings on the semiconductors and semiconductor capital equipment group to reflect its 2026 outlook. It expects the AI theme to be the key driver of stock performance in 2026, and thus is inclined towards stocks “centric to the pillars of the AI ramp”, stating that quality will “ultimately rise to the top in a year sure to be mired with debate on how much of this opportunity can actually deploy.”
In addition to Barclays, Wells Fargo also raised the price target on Micron Technology, Inc. (NASDAQ:MU) to $410 from $335 on the same day and reiterated an Overweight rating on the shares. The firm stated that it updated its bottom-up Semi industry model and took into account key themes ahead, highlighting AI token-driven supply/demand models, WFE die-to-wafer models, and Industrial and Electrical leading AI indicators.
Micron Technology, Inc. (NASDAQ:MU) provides innovative memory and storage solutions. Its operations are divided into the following segments: Compute and Networking Business Unit (CNBU), Mobile Business Unit (MBU), Embedded Business Unit (EBU), and Storage Business Unit (SBU).
5. Uber Technologies, Inc. (NYSE:UBER)
Number of Hedge Fund Holders: 143
Uber Technologies, Inc. (NYSE:UBER) is one of the best strong buy growth stocks to buy according to hedge funds. Uber Technologies, Inc. (NYSE:UBER) and The Kroger Co. announced on January 15 the launch of around 2,700 Kroger Family of Companies stores on the Uber Eats, Uber, and Postmates apps. The initiative allows customers to shop their local Kroger banner for household essentials, fresh groceries, Kroger’s Our Brandsfavorites, and a range of other items through the on-demand and same-day delivery offered by Uber’s apps.
Management stated that the rollout delivers on the previously announced plan by the two companies to expand access, value, and choice for users. In addition to Kroger’s sushi and floral shops already available on Uber Eats, customers are now able to browse full store assortments from a range of Kroger banners.
In a separate development, Uber Technologies, Inc. (NYSE:UBER) was initiated with an Outperform rating by BNP Paribas on January 14 with a price target of $108. The firm told investors that it considers the company to be “a mobility and delivery winner” despite the fear of autonomous vehicles disintermediating the business in the long-term.
Uber Technologies, Inc. (NYSE:UBER) operates as a technology platform that offers ride services and merchant delivery service providers for food, groceries, meal preparation, and other delivery services. The company’s operations are divided into Delivery, Mobility, and Freight. The Delivery segment allows users to order food, while the Mobility segment provides access to Mobility Drivers who provide rides in various vehicles. The Freight segment connects Carriers and Shippers.
4. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 183
Broadcom Inc. (NASDAQ:AVGO) is one of the best strong buy growth stocks to buy according to hedge funds. Broadcom Inc. (NASDAQ:AVGO) received a rating update from Jefferies on January 15, which reiterated a Buy rating on the stock and set a price target of $200. The same day, Wells Fargo upgraded Broadcom Inc. (NASDAQ:AVGO) to Overweight from Equal Weight and set a price target of $430.
In another development, Broadcom Inc. (NASDAQ:AVGO) announced on January 6 the launch of its next-generation BCM4918 accelerated processing unit (APU) and two new dual-band Wi-Fi 8 devices, the BCM6714 and BCM6719. The launch marks a significant milestone in the company’s legacy of Wi-Fi innovation, with its unified Wi-Fi 8 platform allowing operators to deliver new real-time agentic applications for residential consumers with enhanced power efficiency and built-in security, attainable through the combination of smart intelligence and higher throughput.
Management further reported that Broadcom Inc. (NASDAQ:AVGO) is continually leading the industry with next generation intelligence, wireless performance, and efficiency, building on its first-to-market BCM6718 Wi-Fi 8 chipset. The new platform amalgamates advanced networking, compute acceleration, and robust security, delivering the necessary low latency, high throughput, and intelligent optimization for the emerging AI-driven connected ecosystem.
Broadcom Inc. (NASDAQ:AVGO) is a leading multinational technology company specializing in semiconductor and infrastructure software products.
3. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 194
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is one of the best strong buy growth stocks to buy according to hedge funds. TD Cowen lifted the price target on Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) to $370 from $325 on December 16 and maintained a Hold rating, telling investors that it updated its model after the company reported better-than-expected quarterly results supported by manufacturing excellence.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) announced its fiscal Q4 2025 consolidated results on January 15, reporting consolidated revenue of NT$1,046.09 billion, net income of NT$505.74 billion, and diluted earnings per share of NT$19.50.
Fiscal Q4 revenue rose 20.5% year-over-year, while net income and diluted EPS both rose 35.0%. In US dollars, fiscal Q4 revenue reached $33.73 billion, up 25.5% year-over-year and up 1.9% from the previous quarter. Wendell Huang, Senior VP and Chief Financial Officer of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), stated that the company’s strong fiscal Q4 results were supported by solid demand for its leading-edge process technologies, and management expects these trends to continue in fiscal Q1 2026.
Following the company’s earnings release, Needham lifted the price target on Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) to $410 from $360 on January 15 and maintained a Buy rating on the shares. The firm cited the strong earnings release and guided key 2026 metrics that all came in above Wall Street’s expectations. It added that the company also guided Q1 revenue to rise around 4% sequentially, defying historical seasonality, attributed to meticulous capacity planning leading to increased wafer shipments for HPC customers in the first half of the year, when smartphone demand is in the seasonal lull period.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is the largest contract semiconductor manufacturer in the world. Some of its prominent customers include semiconductor companies that outsource all or part of their chip production, including Advanced Micro Devices, Nvidia, Broadcom, and more.
2. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 234
NVIDIA Corporation (NASDAQ:NVDA) is one of the best strong buy growth stocks to buy according to hedge funds. NVIDIA Corporation (NASDAQ:NVDA) received a rating update from Jefferies on January 16, with the firm lifting the price target on the stock to $275 from $250 and maintaining a Buy rating on the shares. The firm told investors that NVIDIA Corporation (NASDAQ:NVDA) “remains pretty cheap,” trading at mid-teens multiple to its bottom-up implied calendar year 2027 estimate. In another development, J.P. Morgan reiterated a Buy rating on NVIDIA Corporation (NASDAQ:NVDA) on January 13, without assigning a price target.
The rating update came the same day NVIDIA Corporation (NASDAQ:NVDA) and Eli Lilly reported that they are putting together “a blueprint for what is possible in the future of drug discovery,” announced by NVIDIA Corporation (NASDAQ:NVDA) founder and CEO Jensen Huang at a fireside chat with Dave Ricks, chair and CEO of Lilly, on Monday at the annual J.P. Morgan Healthcare Conference in San Francisco. The announcement was focused on the joint development of a first-of-its-kind AI co-innovation lab by NVIDIA Corporation (NASDAQ:NVDA) and Lilly.
Management further reported that the initiative would amalgamate NVIDIA Corporation’s (NASDAQ:NVDA) leadership in AI with Lilly’s expertise in the pharmaceutical industry to take on one of the greatest challenges faced by humanity: modeling the complexities of biology. The two companies would support the lab by jointly investing up to $1 billion in infrastructure, talent, and compute over five years. The co-innovation lab will be based in the San Francisco Bay Area.
NVIDIA Corporation (NASDAQ:NVDA) designs and manufactures computer graphics processors, chipsets, and other multimedia software. It operates in the Compute & Networking and Graphics Processing Unit (GPU) segments.
1. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 243
Alphabet Inc. (NASDAQ:GOOGL) is one of the best strong buy growth stocks to buy according to hedge funds. On January 14, RBC Capital reiterated a Buy rating on Alphabet Inc. (NASDAQ:GOOGL) and set a price target of $375. In addition, BofA lifted the price target on Alphabet Inc. (NASDAQ:GOOGL) to $370 from $335 on January 13 and maintained a Buy rating on the stock. The rating update came after Alphabet Inc. (NASDAQ:GOOGL) and Apple announced a multi-year collaboration under which the next generation of Apple Foundation Models would be based on Google’s Gemini models and cloud technology.
In a joint statement released by the two companies on January 12, Apple stated it believes that Google’s AI technology provides “the most capable foundation” for Apple Foundation Models, adding that other future Apple Intelligence Features would also be powered by its models, including a more personalized Siri set to launch this year. According to a Reuters report released the same day, the latest agreement sets Google as the default search engine on Apple’s devices, making it a “lucrative” arrangement that not only drives traffic for Google but also generates tens of billions in annual revenue for Apple.
BofA also cited the partnership between Google and Walmart announced on Sunday at NRF, which aims at bringing Walmart inventory to the Gemini app by employing Google’s Universal Shopping Protocol. According to BofA, the Apple and Walmart deals warrant a higher multiple, provided stronger evidence of traction for Google’s Gemini capabilities.
Alphabet Inc. (NASDAQ:GOOGL) is a holding company with segments including Google Services, Google Cloud, and Other Bets. The Google Services segment operates various services and products, including Android, Google Maps, Google Play, Chrome, Search, and YouTube.
While we acknowledge the potential of GOOGL 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 GOOGL and that has 100x upside potential, check out our report about this cheapest AI stock.
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