In this article, we discuss 5 hot growth stocks to buy now. If you want to see more hot growth stocks, go directly to 10 Hot Growth Stocks To Buy Now.

5. Uber Technologies, Inc. (NYSE:UBER)

Revenue Growth Rate over Last 12 Months: 95.71%
3 months return: 33.01%
Number of Hedge Fund Holders: 142

Uber Technologies, Inc. (NYSE:UBER), a ride-sharing and food delivery firm, has great growth prospects for the upcoming year. In 2023, Uber (UBER 5.53%) may have both business areas working at full capacity. Uber has a 71% share of the ride-sharing industry in the United States as of 2022. The company shares have offered 33.54% returns to investors over the past month. Uber reported a 49% increase in revenue to $8.6 billion for the fourth quarter. With the ride-hailing mobility category seeing an even sharper 31% growth rate, gross bookings increased by 19% year over year.

The fundamentals of Uber also appeared stronger. The number of active platform users every month increased by 11% to 131 million. Over 2.1 billion journeys were made in total, up from 1.77 billion in the same time last year. Additionally, the firm now has access to the freight transportation market thanks to the acquisition of Transplace, which gave overall revenues a modest but quickly-rising boost.

After Uber’s Q4 earnings beat expectations, Goldman Sachs analyst Eric Sheridan increased his price target for the company to $47 from $45 on February 8 while maintaining a Buy rating for the shares. In addition, fund managers added to their Uber holdings in the third quarter. There were 142 hedge funds in our database that held stakes in Uber Technologies, Inc. (NYSE:UBER)’s at the end of the third quarter, compared to 129 funds in the third quarter. First Pacific Advisors LLC is the company’s most significant stakeholder, with 2.62 million shares worth $64.74 billion.

RiverPark Funds shared its outlook on Uber Technologies, Inc. (NYSE:UBER) in its Q3 2022 investor letter. Here’s what the firm said:

“Uber was our top contributor for the quarter on better-than-expected 2Q results, and 3Q EBITDA guidance that was well ahead of Street estimates. The company reported 33% Gross Bookings growth from both the continued recovery of Mobility Gross Bookings, up 55% year over year, and the continuation of Delivery Gross Bookings growth, up 7% year over year. Overall, revenue grew 105% year over year to $8 billion, generating $364 million of adjusted EBITDA, up $873 million year over year. Management guided to 25%-30% gross bookings growth and adjusted EBITDA of $440-$470 million for 3Q. Significantly, FCF was positive at $382 million, up $780 million year over year, and remains on track to be positive for the year allowing the company to self-fund future growth…..(Click to read the full text).”

4. Cloudflare, Inc. (NYSE:NET)

Revenue Growth Rate over Last 12 Months: 51.87%
3 months return: 47.25%
Number of Hedge Fund Holders: 53

Cloudflare, Inc. (NYSE:NET) offers an expanding set of application, network, and security services that help to expedite and safeguard mission-critical software and infrastructure. The company’s variety of products and services make it the ideal option for companies wishing to improve the performance, dependability, and security of their website. Many websites employ Cloudflare’s security defences against DDoS assaults and Content Delivery Network (or CDN) to guarantee quick loading times, which are crucial for SEO.

Although facing economic challenges, Cloudflare, Inc. (NYSE:NET) produced a stellar third-quarter earnings report. Its client base increased by 18% to 156,000, and over the previous year, the typical consumer spent 24% more money. The result was a 47% rise in revenue to $254 million. Regarding the future, Cloudflare, Inc. (NYSE:NET) is well-positioned to keep up with or even pick up speed. More than 20% of the internet uses at least one Cloudflare service, yet the business has just 1% of the $125 billion addressable market.

Cloudflare, Inc. (NYSE:NET) is also getting the attention of the smart money, as 53 hedge funds tracked by Insider Monkey reported owning stakes in the company at the end of the third quarter, up from 41 funds a quarter earlier. Catherine D. Wood’s ARK Investment Management is the leading shareholder of the company with 294,962 shares of Cloudflare, Inc. (NYSE:NET), worth over $13.34 billion.

Here is what Baron Funds had to say about Cloudflare, Inc. (NYSE:NET) in its third-quarter 2022 investor letter:

“We continued to build our position in Cloudflare, Inc. (NYSE:NET) during the quarter as the shares declined with the overall software space and the long-term risk/ reward balance became more compelling. The company reported a strong second quarter, with revenue growth accelerating to 54%, as well as better gross and operating margins. Third quarter guidance was also ahead of Wall Street expectations …… (Click here to read the full text).”

3. Li Auto Inc. (NASDAQ:LI)

Revenue Growth Rate over Last 12 Months: 86.29%
3 months return: 47.40%
Number of Hedge Fund Holders: 20

Li Auto Inc. (NASDAQ:LI) creates, develops, produces, and distributes premium smart electric SUVs. It offers families safe, convenient, and cost-effective mobility alternatives. Li Auto, which began mass production in November 2019, has so far given out 257,334 automobiles. That is a great lift for a new electric vehicle startup. Annual deliveries at Li Auto Inc. (NASDAQ:LI) increased by 47% in 2022. The six-seat Li L8 and the six-seat Li L9 luxury SUVs sold more than 10,000 units each in December.

Li Auto recorded monthly deliveries of 15,141 automobiles in January 2023, increasing 23.4% year over year, indicating overall strength. By the end of January, there had been 272,475 total deliveries. By the end of January, there had been 272,475 total deliveries. Li Auto is investing significantly in technology to make its SUVs more appealing to the luxury market. It wants to stand out from rivals by delivering something different. Li Auto intends to introduce three new products in 2023, including flagship models with longer ranges built on the brand-new high-voltage platform for pure battery electric vehicles (BEVs). The initial medium-sized car is anticipated to cost between 200,000 and 300,000 RMB (29,700-44,600 USD).

On February 9, Citi analyst Jeff Chung maintained a Buy rating on the shares while increasing his price objective on Li Auto to $51.50 from $48. In addition, the analyst increased Citi’s 2023 sales prediction from 210,000 to 235,000 units in response to recent new product introductions. At the end of Q3 2022, 20 hedge funds owned a stake in Li Auto Inc. (NASDAQ:LI), down from 28 in the preceding quarter.

2. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)

Revenue Growth Rate over Last 12 Months: 42.61%
3 months return: 50.22%
Number of Hedge Fund Holders: 87

The chipmaking company, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), has generated 16.11% returns in the past month. Comparing the 14.06x P/E ratio of TSM to the significantly larger multiples of its peer group, this ratio is appealing. Nvidia (NASDAQ:NVDA) is trading at 57.96x, while Advanced Micro Devices (NASDAQ:AMD) is trading at 101.85x.

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is diversifying and boosting production internationally to ease worries about future supply-chain challenges and the geopolitical danger from China’s invasion of Taiwan. For instance, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is doubling, or more than tripling, the amount it will invest in its new manufacturing in Arizona. Once fully operational, it is projected that the new chip factory will generate $10 billion in revenue. 

Based on 5 buy ratings, 1 hold rating, and 0 sell ratings, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) has a consensus rating of ‘Strong Buy.’ At the end of Q3 2022, 87 hedge funds held stakes in Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM). The total value of these stakes was estimated at $13.24 billion. As of December 31, Cantillon Capital Management is the dominant investor in the company and has a position worth $242.11 billion.

Here is what Baron Funds had to say about Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its third-quarter 2022 investor letter:

“Semiconductor giant Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) detracted from performance due to the global macroeconomic slowdown and softening demand for consumer electronics. We retain conviction that Taiwan Semi’s technological leadership, pricing power, and exposure to secular growth markets, including high-performance computing, automotive, and IoT, will allow the company to deliver strong revenue growth over the next several years.”

1. Shopify Inc. (NYSE:SHOP)

Revenue Growth Rate over Last 12 Months: 24.59%
3 months returns: 51.34%
Number of Hedge Fund Holders: 62

Shopify Inc. (NYSE:SHOP), an e-commerce company, is also on our list of the top 10 hot growth stocks to buy. The company’s stock has risen dramatically in 2023. Shares of the company have returned 36% in the last month, compared to 4.14% for the S&P 500 composite. Shopify Inc. (NYSE:SHOP) recorded revenues of $1.37 billion in the third quarter, a year-over-year increase of +21.6%. EPS of -$0.02 for the same period surpassed expectations by $0.05. Shopify has outperformed consensus earnings per share projections twice in the previous four quarters. During this time, the firm exceeded consensus sales projections twice.

Even if increasing profits are probably the strongest indicator of a company’s financial health, nothing happens in the traditional sense if a business cannot increase sales. For this reason, understanding a company’s potential for revenue growth is essential. On February 15, Shopify Inc. (NYSE:SHOP) is scheduled to release its Q4 FY22 earnings. For Shopify, the average sales forecast of $1.64 billion for the upcoming quarter indicates an increase of +18.9% from the same period last year. In addition, estimates of $5.51 billion and $6.62 billion for the current and following fiscal years show changes of +19.5% and +20.2%.

Based on 9 buy recommendations, 13 hold ratings, and 2 sell ratings, Shopify Inc. (NYSE:SHOP) has a consensus rating of ‘Moderate Buy.’ The company is also getting the attention of the smart money, as 62 hedge funds tracked by Insider Monkey reported owning stakes in the company at the end of the third quarter, up from 60 funds a quarter earlier. ARK Investment Management is the leading shareholder of Shopify Inc. (NYSE:SHOP), with a stake worth over $460.92 billion.

Artisan Partners, an investment management company, mentioned Shopify Inc. (NYSE:SHOP) in its third-quarter 2022 investor letter. Here is what the fund said:

“Shopify Inc. (NYSE:SHOP) is a leading e-commerce platform supporting over 2 million merchants with software, online storefronts and payments technology. Like Uber, Shopify returned to mid-cap territory during Q2 as the company’s profit cycle and share price have faced significant pressure. Earlier this year, the company began a phase of investments to support a range of future growth drivers, including Shopify Plus for larger brands, logistics services, international expansion, point-of-sale payments and social media-based commerce. With high inflation putting pressure on consumer spending, and with e-commerce activity normalizing after a massive pandemic spike, Shopify’s earnings have fallen sharply. While we have outstanding questions about the likelihood of success for the company’s capital-intensive logistics investments, we decided to take advantage of the stock’s >75% YTD decline and initiate a GardenSM position at a deep discount to our PMV estimate. Our thesis is predicated on our belief there is still a long runway for commerce to move online, and Shopify is well-positioned to win share of this market. The company has created an ecosystem of products (payment processing, financing, shipping, customer engagement tools, etc.), partners (TikTok, Google, Meta), sales channels and over 6,000 apps to help its merchants sell online and establish direct relationships with customers.”

Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily newsletter to get  the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also check out our articles on 12 Safe Stocks to Buy For Long-Term and 15 Best Growth Stocks to Buy According to Hedge Funds.