On July 9, Chris Hyzy, CIO at Merrill and Bank of America Private Bank, appeared on CNBC to suggest that the markets are in a wait-and-see phase, but rising profits are expected to drive future upside. He explained that investors are currently constantly surveying their surroundings for confirmation of the current bullish market trend that has been in place since the April lows. This search for confirmation encompasses everything from economic data to market internals. However, when such confirmation fails to materialize, the wedge is removed from the market, leading to an upward trend in trading. Despite the recent and potential tariff implementations, Hyzy anticipates profit revisions to continue rising and noted that the US is currently leading in profit revisions. While the profit cycle has stalled out for now, it remains positive. He also highlighted that most investors will begin to discount 2026 earnings by the fall. Regarding the Fed, he confirmed that it is currently in holding mode. Still, he expects a little bit more dovish speak soon due to emerging soft patch signs in the economy, which could become evident before the September and October jobs reports.
Given the expectation of increased dovishness from the Fed, the analyst was queried about his view on cyclical sectors, specifically industrials, financial, and small caps. He emphasized that diversification will be a theme in the coming years, extending to international markets relative to the US. He advocated for a diversified portfolio across company size, geography, and investment style, as well as considering rotation within the market. While he believes some beaten-down cyclicals offer value, he maintained that cyclical growth areas like financials, industrials, and even the tech sector are expected to continue leading the market. He addressed consumer discretionary, acknowledging recent pressure due to concerns over consumer spending, but viewed this as a temporary stalled-out period that will resume growth. For small caps, he admitted his firm had been on the wrong side slightly, having raised them to a slight overweight over a year ago. While this overweight remains tiny, he anticipates the long-standing valuation gap in small caps to narrow. However, he stressed that the rotation towards high-quality, large-cap stocks within the market is just getting going.
That being said, we’re here with a list of the 12 best growth stocks to buy and hold for 3 years.
Photo by Roberto Júnior on Unsplash
Our Methodology
We sifted through the Finviz stock screener and financial media reports to compile a list of the top growth stocks to buy and hold for the next 3 years. We then selected 13 stocks with a 3-year revenue CAGR of over 15%. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q1 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).
12 Best Growth Stocks to Buy and Hold For 3 Years
12. CrowdStrike Holdings Inc. (NASDAQ:CRWD)
3-Year Revenue CAGR: 36.21%
Number of Hedge Fund Holders: 64
CrowdStrike Holdings Inc. (NASDAQ:CRWD) is one of the best growth stocks to buy and hold for 3 years. On July 24, Jefferies increased its price target for CrowdStrike to $530 from $520 and reiterated a Buy rating on the shares. The firm expects cybersecurity spending to continue, while maintaining a consistent percentage of software budgets in the coming years due to the increasing importance of the security sector.
In FQ1 2026, the company reported a net new ARR of $194 million and an ending ARR of $4.44 billion, which showed a 22% year-over-year increase. The company reported a subscription gross margin of 80%, a robust gross retention rate of 97%, and free cash flow of $279.4 million, which is 25% of revenue.
Total revenue reached $1.10 billion, which was up 20% year-over-year, with subscription revenue at $1.05 billion (also up 20% year-over-year) and professional service revenue at $52.7 million. However, there is a temporary divergence between ARR and subscription revenue due to the Customer Commitment Program/CCP, which is expected to have a near-term impact of $10 million to $15 million on subscription revenue per quarter.
CrowdStrike Holdings Inc. (NASDAQ:CRWD) provides cybersecurity solutions internationally. Its unified platform provides cloud-delivered protection of endpoints, cloud workloads, identity, and data through a SaaS subscription-based model.
11. Toast Inc. (NYSE:TOST)
3-Year Revenue CAGR: 38.68%
Number of Hedge Fund Holders: 64
Toast Inc. (NYSE:TOST) is one of the best growth stocks to buy and hold for 3 years. On July 22, Truist raised its price target for Toast to $50 from $48, while keeping a Buy rating on the shares. The firm is optimistic for the FinTech sector and expects solid overall earnings results while noting the group’s recent underperformance.
In Q1 2025, Toast reported booking Applebee’s, which marked its largest deal in company history, and added 6,000+ net new locations during the quarter. In that quarter, the Annualized Recurring Run-rate grew 31% year-over-year to $1.7 billion. Toast achieved a net income of $56 million and Adjusted EBITDA of $133 million.
In Q1, the company experienced a 25% year-over-year increase in total locations, which reached ~140,000. Gross Payment Volume/GPV rose 22% year-over-year to $42.2 billion. In this quarter, Toast also renewed its credit facility, closing a $350 million revolving credit facility, which amends and restates its previous $330 million facility established in 2021. The company also introduced ToastIQ, an intelligence engine designed to enhance restaurant operations.
Toast Inc. (NYSE:TOST) is a cloud-based digital technology platform for the restaurant industry in the US, Ireland, India, and internationally.
