On April 29, Dan Ives of Wedbush Securities joined ‘Power Lunch’ on CNBC to discuss his outlook for the tech sector and expressed that tariffs aren’t stopping the AI revolution. According to Ives, the critical question for the sector was whether spending, particularly CapEx, was being maintained. He expressed confidence that CapEx was holding up and predicted that the forthcoming results from big tech companies would serve more as a confidence booster for the market, rather than fueling the existing fears. As some investors are of the idea that concerns about a potential soft patch in the economy remain, there’s a preference for safer investments in insurance and other stable sectors, rather than big tech. However, Ives acknowledged that while uncertainty had been prevalent in recent weeks, his own survey work and field research indicate that AI-related spending stays strong. He noted that, while there were areas of the cloud sector where spending was accelerating, the overall uncertainty would likely result in broad guidance ranges from companies.
Michael Darda, the Managing Director, Chief Economist, and Macrostrategist at ROTH, also believes that AI would generate solid returns in the future. Ives agreed with Darda’s assessment and stated that enterprises were seeing similar advancements and could not afford to leave their AI projects behind without the risk of consequently falling behind. He also pointed out that for companies like those in the MAG7, the AI revolution is a central theme, which is why challenges brought forward by tariffs would not impact the AI revolution as much. Darda changed his outlook from bearish to bullish on tech and AI recently due to his personal experience with AI tools, which he felt had improved over the past year.
Dan Ives reiterated that, despite the uncertainty created by tariffs, the demand for software remained a safety blanket, and spending by hyperscale companies is expected to continue. That being said, we’re here with a list of the 15 best growth stocks to buy for the next 3 years.
A hand holding a tablet revealing a financial dashboard of assets and stocks.
Our Methodology
We sifted through financial media reports to compile a list of the top growth stocks to buy for the next 3 years. We then selected 15 stocks with a 3-year revenue compound annual growth rate of over 20%. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024, which was sourced from Insider Monkey’s database.
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).
15 Best Growth Stocks to Buy for the Next 3 Years
15. Corcept Therapeutics Inc. (NASDAQ:CORT)
3-Year Revenue CAGR: 22.64%
Number of Hedge Fund Holders: 29
Corcept Therapeutics Inc. (NASDAQ:CORT) discovers and develops medications for the treatment of severe endocrinologic, oncologic, metabolic, and neurologic disorders in the US. The company’s primary revenue and growth driver is its Cushing’s syndrome franchise, which is centered around its drug called Korlym.
In 2024, the Cushing’s syndrome segment made $675 million in revenue, which was up 40% year-over-year. This came from a record number of new Korlym prescribers and patients throughout 2024, indicating increasing physician awareness of hypercortisolism’s prevalence. Corcept is solidifying its position in the Cushing’s syndrome market by developing and potentially launching relacorilant. This is a proprietary selective cortisol modulator.
Corcept submitted an NDA for relacorilant on December 30, 2024, based on compelling data from its Phase III GRACE and Phase II studies. These studies showed statistically significant improvements in hypertension, hyperglycemia, weight, and other Cushing’s symptoms, with a favorable safety profile. Corcept projects a 2025 revenue guidance of $900 to $950 million in this area.
ClearBridge Small Cap Strategy stated the following regarding Corcept Therapeutics Incorporated (NASDAQ:CORT) in its Q3 2024 investor letter:
“Another top contributor in health care, Corcept Therapeutics Incorporated (NASDAQ:CORT), saw its stock rise in the third quarter after strong earnings results and increased guidance for sales of Korlym, a hyperglycemia drug for adults with Cushing’s syndrome, which investors had been concerned would be vulnerable to the launch of a competitor’s generic version late last year. The company has seen added tailwinds from anticipation surrounding its next-generation version of the drug, which has fewer side effects, and is expected to release phase 3 data later this year and potentially file for FDA approval in 2025.”
14. Manhattan Associates Inc. (NASDAQ:MANH)
3-Year Revenue CAGR: 15.28%
Number of Hedge Fund Holders: 34
Manhattan Associates Inc. (NASDAQ:MANH) develops, sells, deploys, services, and maintains software solutions to manage supply chains, inventory, and omnichannel operations. For instance, it offers a warehouse management solution for managing goods and information across the distribution centers.
The company’s Cloud Revenue segment made $94 million in Q1 2025 revenue, which marked a year-over-year improvement of 21%. This was fueled by new customer acquisitions, where ~50% of new cloud bookings came from net new logos, and cross-selling the company’s unified product portfolio. Manhattan Associates is also undergoing the conversion of on-premise customers to cloud offerings.
The company is making continuing investments in product innovations, such as AI-powered features. For the full year 2025, Manhattan Associates Inc. (NASDAQ:MANH) projects Cloud revenue between $405 and $410 million. This growth is also expected to be driven by the expanding addressable market for cloud-based supply chain solutions.
13. Shift4 Payments Inc. (NYSE:FOUR)
3-Year Revenue CAGR: 34.54%
Number of Hedge Fund Holders: 38
Shift4 Payments Inc. (NYSE:FOUR) provides software and payment processing solutions. It offers a payment platform for omnichannel card acceptance and processing solutions across multiple payment types like MasterCard & Apple Pay. It also provides software partner operations and support services, such as software integrations and compliance management.
In Q4 2024, volumes on Shift4’s Unified Commerce platform saw a 660% year-over-year increase. For the full year 2024, these volumes were up 319%. This was fueled by the platform’s ability to offer a single integration for card-not-present transactions globally, which helped attract diverse enterprise clients like St. Jude, Allegiant Airlines, BetMGM, and Wolt, as well as a record number of non-profit organizations.
The platform supports pay-ins, payouts, cross-border transactions, merchant of record capabilities, and various alternative payment methods. Shift4 Payments Inc. (NYSE:FOUR) anticipates another year of very strong growth in this segment, particularly as large partners like Give Lively fully scale their integrations. The company also sees potential in the crypto space, having announced the capability for merchants to accept crypto payments across all its products.
ClearBridge SMID Cap Growth Strategy stated the following regarding Shift4 Payments, Inc. (NYSE:FOUR) in its Q2 2024 investor letter:
“Stock selection in the financials sector provided a positive offset. Shift4 Payments, Inc. (NYSE:FOUR), a software and payment processing solutions company, also saw positive returns during the period, with management increasing the top end of their full-year guidance for end-to-end payments volume.”
12. Super Micro Computer Inc. (NASDAQ:SMCI)
3-Year Revenue CAGR: 70.92%
Number of Hedge Fund Holders: 45
Super Micro Computer Inc. (NASDAQ:SMCI) develops and sells high-performance server and storage solutions. It offers a range of IT solutions, such as complete servers, storage systems, workstations, networking devices, server sub-systems, and server management and security software. SMCI’s servers also integrate NVIDIA GPUs, which are crucial for AI and data centers.
On March 21, JP Morgan analyst Samik Chatterjee upgraded the stock to Neutral from Underweight, while raising the price target to $45 from $35. The company is set to benefit from strong demand for Blackwell-based servers. On April 15, SteelDome and SMCI also entered into a collaboration to deliver next-gen virtualization and storage solutions optimized for hyperconverged and AI workloads.
While the company lowered its FY2025 revenue guidance to between $23.5 and $25 billion, from a previous range of $26 to $30 billion, this was overshadowed by the long-term positive projections. For FY2026, SMCI projects ~$40 billion in sales due to the demand for AI-optimized servers, particularly those incorporating NVIDIA’s advanced chips, and SMCI’s direct-liquid cooling (DLC) technology.
11. Monolithic Power Systems Inc. (NASDAQ:MPWR)
3-Year Revenue CAGR: 22.26%
Number of Hedge Fund Holders: 51
Monolithic Power Systems Inc. (NASDAQ:MPWR) designs, develops, markets, and sells semiconductor-based power electronics solutions. It serves a range of markets, such as storage & computing, automotive, enterprise data, consumer, communications, and industrial markets.
In Q4 2024, the company’s automotive sector demonstrated solid growth due to the increasing adoption of Monolithic Power Systems Inc.’s (NASDAQ:MPWR) solutions in EVs, particularly in China, and the anticipated ramp-up of new designs. Notably, the company provides integrated 48-volt solutions. Looking ahead, growth in the automotive segment is expected to be further fueled by a European OEM’s ADAS (autonomous driving) solution in H2 2025
On March 24, Truist Securities reiterated a Buy rating on the stock with a $897 price target. The firm emphasized Monolithic’s position as a pioneer in the analog semiconductor field, particularly noting the company’s ongoing strength in product innovation. Truist also predicted that Monolithic could potentially hit about 20% in sales growth and low-20% EPS growth over a business cycle.
TimesSquare Capital Management U.S. Focus Growth Strategy stated the following regarding Monolithic Power Systems, Inc. (NASDAQ:MPWR) in its Q4 2024 investor letter:
“Monolithic Power Systems, Inc. (NASDAQ:MPWR) designs and develops integrated semiconductor solutions for power delivery architectures in computing, storage, automotive, industrial, communications, and consumer applications. Their stock came under pressure during the quarter due to a research report alleging technical issues with Monolithic’s products on Nvidia’s Blackwell AI platform and that it was in danger of completely losing that business. Our research indicated there is little merit to this claim and while Nvidia is going to multi-source, it is unlikely that Monolithic will be fully displaced. That gave us an opportunity to add this stock to the portfolio.”
10. Trade Desk Inc. (NASDAQ:TTD)
3-Year Revenue CAGR: 26.90%
Number of Hedge Fund Holders: 63
Trade Desk Inc. (NASDAQ:TTD) is a technology company that offers a self-service cloud-based ad-buying platform. This allows buyers to plan, manage, optimize, and measure data-driven digital advertising campaigns across various ad formats and channels. These include video, display, audio, digital-out-of-home, native, and social.
As a leading cloud-based ad-tech platform, Trade Desk connects advertisers with ad-inventory suppliers across streaming, TV, mobile, and out-of-home displays. The company manages over $12 billion in ad spend within a $1 trillion ad industry. This growth is anchored in its AI-powered advertising platform, called Kokai. Trade Desk Inc. (NASDAQ:TTD) is now transitioning all clients to the Kokai platform.
The company outpaced nearly every segment of digital advertising in 2024 and delivered $2.4 billion of revenue. This was up 26% year-over-year. However, on March 18, Justin Patterson, an analyst at KeyBanc, lowered the price target on the stock to $74 from $130 while keeping his Overweight rating. Trade Desk Inc. (NASDAQ:TTD) is actively exploring ways to integrate AI across its suite of products.
Rowan Street Capital highlighted the company’s strong fundamental growth and stated the following regarding The Trade Desk, Inc. (NASDAQ:TTD) in its Q4 2024 investor letter:
“The Trade Desk (TTD): Investment Initiated: March 2020
Internal Rate of Return (IRR): 54%
The Trade Desk has been our most successful investment to date. March 2025 will mark five years since we opportunistically initiated our position at a cost basis of $17.40 (split-adjusted). Since then, TTD has appreciated more than sevenfold, delivering an annualized return of approximately 54%.
These exceptional results far outpace the company’s strong fundamental growth, with revenues and earnings compounding at approximately 25% annually over this period (refer to the table below). The primary reason for this outsized return lies in the price at which we were able to acquire TTD during the early days of the pandemic, when market fears briefly drove it down to just 10x revenues. Today, the valuation has expanded significantly to approximately 25x revenues, amplifying our returns…” (Click here to read the full text)
9. Shopify Inc. (NASDAQ:SHOP)
3-Year Revenue CAGR: 24.41%
Number of Hedge Fund Holders: 64
Shopify Inc. (NASDAQ:SHOP) is a commerce technology company that provides tools to start, scale, market, and run a business of various sizes. It offers the Shopify platform that enables merchants to manage products & inventory, process orders & payments, fulfill & ship orders, build customer relationships, source products, and use analytics for running businesses.
The company’s Merchant Solutions segment made $2.8 billion in Q4 2024 revenue, which was up 33% year-over-year. This was fueled by the 26% increase in Gross Merchandise Volume (GMV) processed by Shopify merchants and the expanding adoption of Shopify Payments, which processed $61 billion of GMV in Q4, marking an improvement of 35%. This figure represented 64% of the total GMV.
The increasing penetration of Shop Pay, which accounted for 41% of Gross Payment Volume (GPV) in Q4, also contributed to the segment’s growth. Shopify Inc. (NASDAQ:SHOP) now expects Merchant Solutions to grow quicker than Subscription Solutions. This outperformance is expected to be driven by the ongoing strength of Shopify Payments, the increasing array of Merchant Solutions products.
Artisan Global Opportunities Fund stated the following regarding Shopify Inc. (NASDAQ:SHOP) in its Q4 2024 investor letter:
“Among our top Q4 contributors were Atlassian and Shopify Inc. (NASDAQ:SHOP). Our conviction in Shopify grew after it decided to exit the logistics business in favor of a capital-light partnership model, which we viewed as significantly narrowing the downside range of outcomes and allowed it to focus on what it does so well: developing great e-commerce software solutions for brands of all sizes. We have been encouraged by Shopify’s subsequent pace of innovative new product enhancements, including using AI assistants to help brands run their businesses. Shares rallied after the company reported strong earnings results, including 24% growth in gross merchandise volume, and management raised its forward guidance.”
8. Nu Holdings Ltd. (NYSE:NU)
3-Year Revenue CAGR: 86.49%
Number of Hedge Fund Holders: 79
Nu Holdings Ltd. (NYSE:NU) provides a digital banking platform that offers spending solutions that comprise the digitally enabled Nu credit & prepaid card. The company also provides transactional Solutions, such as Nu Personal Accounts and a digital account solution for personal financial activities.
Brazil is a growth-generating region for the company. In 2024, Nu added over 1 million customers per month in Brazil, serving 58% of the population and becoming the third-largest financial institution in the country by customer count. Total deposits in Brazil reached $23.1 billion, which was an 11% sequential increase. The secured lending portfolio in Brazil grew by 615% year-over-year to $1.4 billion, which made up 23% of the total lending portfolio.
JPMorgan analyst Yuri Fernandes recently upgraded the rating on Nu Holdings Ltd. (NYSE:NU) from Neutral to Overweight but lowered the price target from $14 to $13 on April 8. Despite anticipating a challenging 2025 due to a potential slowdown in personal loans, Fernandes believes that the risks are already reflected in the current stock price following the global market sell-off.
White Falcon Capital Management stated the following regarding Nu Holdings Ltd. (NYSE:NU) in its Q4 2024 investor letter:
“Nu Holdings Ltd. (NYSE:NU) has recently corrected due to Brazil’s macroeconomic struggles. Nu reports its earnings in U.S. dollars but generates revenue in Brazilian reais, Mexican pesos, and Colombian pesos. The sharp depreciation of these emerging market currencies, coupled with ongoing macroeconomic uncertainty, is making investors uncomfortable. Our due diligence suggests that Nu remains unaffected. Importantly, we continue to believe that Nu is a rare business with a combination of a large market opportunity, a strong moat driven by its superior cost structure, and a brilliant management team.”
7. Datadog Inc. (NASDAQ:DDOG)
3-Year Revenue CAGR: 37.67%
Number of Hedge Fund Holders: 83
Datadog Inc. (NASDAQ:DDOG) operates an observability and security platform for cloud applications. Its products comprise infrastructure & application performance monitoring, database monitoring, error tracking, workflow automation, application security management, sensitive data scanner, event management, and CI & LLM visibility, among others.
In Q4 2024, the company’s customer base rose by 42% year-over-year. Datadog’s existing customers are also increasingly adopting multiple products. In the past quarter, 83% of Datadog’s customers used more than 2 of its products, 50% used more than 4 products, while 26% used more than 6 products. The company’s larger enterprise customers have also grown, with 45% of the Fortune 500 now using Datadog. The company is now transitioning from AI hardware to AI software infrastructure.
Datadog Inc. (NASDAQ:DDOG) has a particular focus on its monitoring and analytics platform, which integrates infrastructure monitoring, application performance monitoring, log management, and cloud security for various enterprises. About 3,500 of the company’s customers adopted AI and ML integrations into their ML, AI, and LLM usage in Q4. On April 7, Jefferies analyst Brent Thill maintained a Buy rating on the stock with a price target of $135.
Parnassus Growth Equity Fund stated the following regarding Datadog, Inc. (NASDAQ:DDOG) in its Q4 2024 investor letter:
“We also added several new positions, including two in Information Technology: Atlassian, a maker of innovative software that allows IT developers and other employees to seamlessly collaborate on complex projects, and Datadog, Inc. (NASDAQ:DDOG), a dominant cloud monitoring platform.
Datadog, a dominant cloud monitoring platform, should have outsized growth due to its category leadership, sticky product suite, best-in-class product innovation and highly regarded management team. We believe the market has misinterpreted cyclical headwinds, such as reductions in IT spending, as secular trends, and we see Datadog benefiting from growth in Cloud Infrastructure-as-a-Service.”
6. Coupang Inc. (NYSE:CPNG)
3-Year Revenue CAGR: 18.03%
Number of Hedge Fund Holders: 87
Coupang Inc. (NYSE:CPNG) owns and operates retail businesses through its mobile applications and internet websites in South Korea and internationally. It operates through the Product Commerce and Developing Offerings segments. It also performs operations and support services in the US, South Korea, Taiwan, Singapore, China, Japan, and India.
The company’s Product Commerce segment grew by 9% year-over-year in Q4 2024. The segment also showed gross profit growth of 31% year-over-year to $2.3 billion, with a gross profit margin of 32.7%. This is attributed to the increased efficiencies in operations, which include greater utilization of automation and technology, supply chain optimization, and the scaling of margin-accretive offerings.
The number of active customers in the Product Commerce segment grew by 10% year-over-year, and the average spend per active customer saw a constant currency increase of 6%. For 2025, Coupang Inc. (NYSE:CPNG) anticipates that the Product Commerce gross profit will grow at a faster rate than its constant currency revenue growth, due to the continued expansion of its FLC (Fulfillment & Logistics by Coupang) offering.
Baron Fifth Avenue Growth Fund stated the following regarding Coupang, Inc. (NYSE:CPNG) in its Q4 2024 investor letter:
“Shares of Coupang, Inc. (NYSE:CPNG), Korea’s largest e-commerce platform, corrected 10.5% in the fourth quarter (even though they finished 2024 up 33.9%). While the company delivered solid quarterly results with 27% year-on-year revenue growth with Farfetch and other initiative losses narrowing significantly, its product commerce EBITDA margin missed expectations due to a temporarily elevated spending on technology and automation. Sluggish domestic consumption in Korea, with the e-commerce market experiencing flattish to negative growth, and political uncertainty stemming from President Yoon’s declaration of martial law and subsequent impeachment, further weighed on the stock. Despite these short-term challenges, we maintain a positive outlook on Coupang’s long-term market share expansion and margin growth trajectory, and view Coupang as one of the most competitively advantaged e-commerce businesses globally, with significant runway for both revenue and earnings growth.”
5. MercadoLibre Inc. (NASDAQ:MELI)
3-Year Revenue CAGR: 43.24%
Number of Hedge Fund Holders: 96
MercadoLibre Inc. (NASDAQ:MELI) is an online commerce platform that operates Mercado Libre Marketplace. This online commerce platform can be accessed through the mobile app or website. It also operates Mercado Pago, which is a financial technology solution platform.
In 2024, MercadoLibre made $21 billion in revenue and more than $1 billion in free cash flow. This growth came from higher gross merchandise volume (GMV) and total payment volume (TPV) across key markets, such as Argentina, Brazil, and Mexico. On April 7, Bloomberg reported that MercadoLibre Inc. (NASDAQ:MELI) plans to increase its investment in Brazil by 48% to invest ~$5.8 billion in 2025.
This investment will enhance the company’s logistics, technology, marketing, and financial capabilities and allow MercadoLibre Inc. (NASDAQ:MELI) to increase its staff in Brazil by 14,000 to reach a total of 50,000 employees. Moreover, the company introduced technological improvements like virtual try-on features and optimized grocery shopping interfaces that contributed to a 29% increase in shipped items.
Lakehouse Global Growth Fund highlighted the company’s significant future potential and stated the following regarding MercadoLibre, Inc. (NASDAQ:MELI) in its February 2025 investor letter:
“The Funds largest position, e-commerce leader MercadoLibre, Inc. (NASDAQ:MELI), delivered another impressive quarterly result, combining robust growth with improving profitability. Net revenue grew 37% year-on-year in U.S. dollar terms to $6.1 billion while operating margins climbed to 13.5%, which was particularly pleasing given the company remains firmly in reinvestment mode. Key operational metrics for its marketplace underscored this strength, with items sold increasing 27%, unique buyers climbing 24% to a new high of 67 million and items per buyer increasing to 7.8. Importantly, the company continues to gain incremental market share in its primary regions, namely that of Brazil and Mexico.
The outperformance of the company’s advertising business also continues to be bright spot, growing 40% plus year-on-year in USD terms. As of today, the advertising business still only represents 2.1% of GMV, which is well below the level of more mature e-commerce peers globally and suggests there is still plenty of runway to grow the ads business. This not only provides another attractive growth vector but also a meaningful lever to improve profitability over time given the higher-margin nature of advertising revenue.”
4. ServiceNow Inc. (NYSE:NOW)
3-Year Revenue CAGR: 22.38%
Number of Hedge Fund Holders: 110
ServiceNow Inc. (NYSE:NOW) provides a cloud-based solution for digital workflows. It operates the Now platform, which is an AI platform for digital transformation ML, robotic process automation, process mining, analytics, and low-code/no-code development tools. It serves a diverse clientele, such as the government and the healthcare & life science sector.
In Q1 2025, ServiceNow’s Technology Workflows segment saw 36 deals over $1 million in net new ACV, which included two deals that exceeded $5 million. These solutions were present in more than half of the company’s top 20 deals. ServiceNow is heavily integrating AI into these workflows with products like ITSM Plus and ITOM Plus, which saw sequential net new ACV growth. For instance, ITOM Plus saw a ~70% increase. The company’s AI-powered Now Assist is also being adopted across these areas.
This adoption has resulted in improvements like Orca’s IT support deflection increasing from 18% to 94% and a 1.5-day reduction in average incident resolution time. On April 25, investment bank Canaccord Genuity increased its price target on ServiceNow Inc. (NYSE:NOW) to $1,075 from $900 while keeping a Buy rating after the company reported stronger-than-expected Q1 2025 results.
Lakehouse Global Growth Fund stated the following regarding ServiceNow, Inc. (NYSE:NOW) in its January 2025 investor letter:
“US-based software company ServiceNow, Inc. (NYSE:NOW) delivered another impressive quarterly result. Revenues grew 21% year-on-year in constant currency terms to $2.9 billion and net income grew 30% year-on-year to $384 million. The company’s key performance indicators remained healthy, with their backlog (remaining performance obligations) growing 23% year-on-year to $22.3 billion (i.e. greater than 2x annual revenue) and renewal rates held firm at 98%. As we have noted in the past, the company’s renewal rates are remarkable as not only are they best-in-class, but they are also extremely consistent, typically in the range of 97% to 99%. These industry-leading renewal rates speak to the mission critical nature of the platform and are a key driver of the long-term annuity value in the business. Zooming out, we continue to believe ServiceNow is one the highest quality software businesses globally as the combination of consistent growth at scale, robust free cash flow generation and a large addressable market make it a compelling opportunity.”
3. Eli Lilly And Co. (NYSE:LLY)
3-Year Revenue CAGR: 16.73%
Number of Hedge Fund Holders: 115
Eli Lilly And Co. (NYSE:LLY) discovers, develops, and markets human pharmaceuticals. The company’s portfolio includes treatments for diabetes, obesity, oncology, autoimmune diseases, and neurological conditions. It serves patients across the US and internationally through different collaborations and partnerships.
Eli Lilly’s entry into the GLP-1 space has proven highly successful, which is highlighted by the recent Phase 3 trial of orforglipron. This is an oral GLP-1 agonist. The ACHIEVE-1 trial in type 2 diabetes showed A1C reductions of 1.3% to 1.6% from a baseline of 8.0%, with placebo showing a 0.1% reduction. Eli Lilly And Co. (NYSE:LLY) plans to submit orforglipron for obesity treatment approval by the end of 2025 and for type 2 diabetes in 2026.
The company has also been on an acquisition spree over the last few years. Eli Lilly bought 8 companies and signed 3 new partnerships. These moves, starting with DICE Therapeutics in mid-2023 and most recently Scorpion Therapeutics in early 2025, are helping the company grow into new areas. On April 21, Evan Seigerman of BMO Capital maintained a Buy rating on Eli Lilly with a $900 price target due to its strong position in the pharmaceutical industry.
Parnassus Core Equity Fund sees Eli Lilly And Co. (NYSE:LLY) as a strong long-term investment due to its GLP-1 franchise and innovation, capitalizing on a sell-off to buy at an attractive valuation. It stated the following in its Q4 2024 investor letter:
“Eli Lilly and Company (NYSE:LLY) stock declined following worse-than-expected third quarter results for its weight-loss drug segment. We initiated our position partway through the quarter, after the drawdown and in time for a partial rebound, and our average underweight for the quarter led to a relative contribution.
In the Health Care sector, we added drugmaker Eli Lilly, which has an exceptional GLP-1 franchise and a strong track record of innovation, which position the company for long-term growth. A rare revenue miss and President-elect Trump’s health secretary nomination sparked a sell-off, providing a window of opportunity to gain exposure to the drugmaker’s attractive product suite and pipeline at an attractive valuation.”
2. Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE:TSM)
3-Year Revenue CAGR: 22.32%
Number of Hedge Fund Holders: 186
Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE:TSM) manufactures, packages, tests, and sells ICs and other semiconductor devices. It offers a range of wafer fabrication processes, such as processes to manufacture complementary metal-oxide-semiconductor logic, mixed-signal, radio frequency, embedded memory, and others.
In FQ1 2025, HPC made 59% of TSMC’s total revenue, which totaled $25.78 billion and improved by 41.40% year-over-year. This HPC revenue itself improved by 7% sequentially, which was driven by the demand for AI-related applications. To support this growth in AI and HPC, TSMC is making investments in advanced packaging technologies, particularly CoWoS. TSMC expects to 2x its CoWoS capacity by 2025. Notably, the shipments of 3nm made up for 22% of total wafer revenue, and 5nm for 36%.
On April 21, Barclays analyst Simon Coles lowered the price target on the TSMC to $215 from $255 while keeping an Overweight rating. According to the analysts, the company’s shares are already pricing in a slowdown. From 2024 to 2029, Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE:TSM) expects revenue CAGR to approach 20%.
The company’s results and guidance showcased strong AI chip demand, which is why Sands Capital Technology Innovators Fund stated the following regarding Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its Q4 2024 investor letter:
“Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) third-quarter 2024 results and guidance showcased strong continued demand for artificial intelligence (AI) chips. Revenue increased by 29 percent, and earnings saw a 54 percent rise year-over-year. Gross margins were at their highest since 2022, bolstered by price hikes and record utilization at both the 3 nanometer (nm) and 5nm nodes. TSMC’s full-year revenue outlook was revised upward from 25 percent to 30 percent growth. The company also anticipates higher capital expenditure in 2025, a leading indicator for revenue.
Meanwhile, TSMC’s competitive position within the leading-edge chip fabrication industry has improved. The company noted that demand for its next-generation 2nm (N2) node is considerably higher than for its predecessor, N3. Additionally, TSMC has more capacity for N2 than N3. This situation contrasts with Intel and Samsung, which both recently disclosed struggles in ramping up their leading-edge nodes. Together, Intel and Samsung account for approximately $25 billion of foundry revenue, which could potentially migrate to TSMC over time…” (Click here to read the full text)
1. NVIDIA Corp. (NASDAQ:NVDA)
3-Year Revenue CAGR: 69.25%
Number of Hedge Fund Holders: 223
NVIDIA Corp. (NASDAQ:NVDA) is a technology company best known for its edge in GPUs and AI platforms. Its primary revenue comes from data center GPUs like the H100 and Blackwell chips, which are essential components for AI workloads. NVIDIA is positioned to target huge markets like a $1 trillion-plus AI market, a $500 billion enterprise AI sector, and a $50 trillion robotics market.
The company has grown at an industry-defining average rate of 270.95% per year, which was primarily due to its dominance in AI, GPUs, and data centers. It achieved 78% year-on-year growth, resulting in revenue of $39.3 billion for FQ4 2025. The demand for Blackwell and Hopper 200 products doubled data center revenue for FY2025 to $115.2 billion.
On April 16, Mizuho Securities maintained its Outperform rating on the stock with a $168 price target, despite new US export restrictions that affect shipments of its H20 series products, which will impact ~$5.5 billion in revenue from an estimated ~$16 billion in H20 orders. However, Mizuho analysts are still optimistic about NVIDIA Corp.’s (NASDAQ:NVDA) near-term prospects, particularly with the shipment of the GB200 series and increased testing capacity for more complex GPU racks.
Guinness Global Innovators is highly bullish on NVIDIA Corp. (NASDAQ:NVDA) due to its dominant AI chip market position. It stated the following in its Q4 2024 investor letter:
“For a second year running, NVIDIA Corporation (NASDAQ:NVDA) was the Fund’s top performing stock, delivering a stellar return of +177.7% over the year. Since the beginning of last year, Nvidia’s ‘Hopper’ GPUs have been at the centre of exploding demand for chips powerful and efficient enough to facilitate the energy intensive requirements of AI processes within datacentres. Initially possessing over 95% of market share in these types of chips, Nvidia have been quick to entrench their position as the technological leader in the space, launching the successor to the current ‘Hopper’ GPU in March, Blackwell, inhibiting the likes of AMD and Intel making meaningful inroads in taking share of the fast-growing market. Compared to the previous iteration (Hopper) which is continuing to fuel Nvidia’s extreme revenue growth, the Blackwell chip is twice as powerful for training AI models and has 5 times the capability when it comes to “inference” (the speed at which AI models respond to queries). Throughout the year, Nvidia’s financial performance has remained resilient. Quarterly revenues hit $35.1 billion in their most recent quarter, beating consensus expectations by 6% and representing a +94% year-over-year increase. Additionally, Nvidia’s data centre segment, driven by the Hopper (H100) chip, grew fivefold over the past year, underscoring the sustained demand for advanced AI infrastructure. The H100 chip, priced at around $40,000, continues to see significant adoption due to its ability to enhance AI model training efficiency while lowering overall costs. This growth is expected to continue as companies invest in upgrading existing data centres and building new ones, with Nvidia well-positioned to capture a significant share of the estimated $2 trillion market opportunity over the next five years. There have been some concerns over Blackwell production delays causing share price volatility however, Nvidia has recovered swiftly, driven by positive earnings results through the year and assurances from management regarding future supply. Additionally, the release of the H200 chip promises to extend Nvidia’s technological leadership, ensuring continued momentum into 2025. While Nvidia’s valuation remains a topic of debate, the stock is not at a significant premium to history, and it still appears reasonable given its dominant market position, innovative prowess, and exposure to long-term secular growth trends in AI, cloud computing, and data infrastructure. As a result, Nvidia remains well-positioned to deliver sustained outperformance over the long term, making it a cornerstone of growth-oriented portfolios.”
As we acknowledge the growth potential of NVIDIA Corp. (NASDAQ:NVDA), our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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