In this article, we will take a look at the stocks with the best earnings growth for the next 5 years.
After decades of market leadership concentrated narrowly, investors are increasingly shifting their focus to companies with sustainable earnings power. That said, many believe the next phase of market returns will be driven by fundamentals, rather than hype.
On January 15, Reuters published “S&P 500 leadership showing signs of broadening beyond tech,” an article asserting that investors are now pushing for a broader rally, one that is driven by industrials, healthcare, and small-cap companies. The author writes that such companies are likely to close the performance gap and lead the market, after years in which technology stocks drove the U.S. bull market.
Over time, investors have become cautious about expensive tech valuations amid uncertainty surrounding the AI narrative that fueled gains, allowing other sectors to make headway, the publication discussed. The article further cited Angelo Kourkafas, a senior global investment strategist at Edward Jones. He argued,
“There is a lot of hope that this is going to be the year where we are going to see some true broadening of leadership,” said Kourkafas. “The conditions are likely in place for that broadening to happen, especially when you sprinkle in and consider elevated valuations, there are some pockets of value that can be found looking beyond technology.”
Against this backdrop, we have compiled a list of stocks with the best earnings growth for the next 5 years. From consumer cyclical and technology to communication services and healthcare, these stocks belong to a range of sectors.
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Our methodology
For this article, we considered stocks with market capitalizations exceeding $2 billion. After this initial screening, we shortlisted stocks with both forecasted EPS growth over the next 5 years and a return on equity of over 20%. These stocks are then ranked by the number of hedge fund holdings, based on Insider Monkey’s database, 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).
12. ServiceNow, Inc. (NYSE:NOW)
Number of Hedge Fund Holders: 104
Return on Equity (TTM): 16.81%
On January 13, Brian Schwartz, an analyst at Oppenheimer, reaffirmed a ‘Buy’ rating on ServiceNow, Inc. (NYSE:NOW). With a price target of $200, the stock has an upside potential of 68%.
A day later, on January 14, Evercore ISI maintained an ‘Outperform’ rating on ServiceNow, Inc. (NYSE:NOW), keeping a price target of $225. The firm noted a stable demand pattern and growing adoption of the company’s Now Assist AI offering. Although the shares have declined in the last three months, the firm expects fourth-quarter results to showcase the company’s solid growth at scale. Since October, the stock has dipped by nearly 28%.
By 2026, the company’s AI strategy is set to exceed $1 billion in annual recurring revenue (ARR), with partner surveys pointing to steady demand and increasing interest, Evercore ISI highlighted, adding that ServiceNow, Inc. (NYSE:NOW) offers an appealing long-term risk/reward profile at its current valuation of about 22.5 times enterprise value to CY27 free cash flow.
ServiceNow, Inc. (NYSE:NOW) is a California-based provider of cloud-based solutions for digital workflows. Incorporated in 2004, the company operates the Now platform and delivers a diverse range of products, including customer service management, field service management applications, and source-to-pay operations.
11. Micron Technology, Inc. (NASDAQ:MU)
Number of Hedge Fund Holders: 105
Return on Equity (TTM): 22.55%
On January 15, Citi lifted the price target on Micron Technology, Inc. (NASDAQ:MU) to $385 from $330 and maintained a Buy rating, while removing the stock from its US Focus List. According to an analyst note, the company’s DRAM pricing momentum may decline in Q2 relative to Q1, noting that the stock usually moves in line with its quarter-over-quarter pricing momentum.
A day before, RBC Capital began coverage on Micron Technology, Inc. (NASDAQ:MU) with an ‘Outperform’ rating and $425 price target. The bank believes rising demand for generative AI, coupled with better supply discipline, has created “extreme tightness” in the memory space. This could extend the current upcycle into 2027.
Srini Pajjuri, an analyst at RBC, noted the company’s robust roadmap, stating that High Bandwidth Memory (HBM) content is accelerating at a rate higher than 50%, with the HBM4 shift reflecting a significant tailwind for the company. That said, the firm anticipates record earnings of $50 or more per share for Micron Technology, Inc. (NASDAQ:MU).
Micron Technology, Inc. (NASDAQ:MU) 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.
