In this article, we will discuss the 8 Best Quality Growth Stocks to Buy.
On June 2, Dan Niles, Niles Investment Management, joined ‘Closing Bell Overtime’ on CNBC to talk parabolic moves in the tech trade and what these massive gains signal. When asked about the rationality behind the dramatic vertical moves in stocks following HPE earnings, Niles asserted that a market can be irrational while still having significant room to run. He noted that while bearish analysts have been calling for a semiconductor downturn since March of last year, the formalization of agentic AI on January 30 triggered a massive surge in token production, which increased by over 130% in the following two months. This suggests that the industry is in a new wave of demand that corporations will likely take another year to fully embrace, leading Niles to expect continued upside through the end of the year.
Regarding the debate over whether these market moves are structural or just a hot cycle, Niles argued that it depends on the definition of overvaluation. He suggested that while some stocks might be overvalued at 100x revenue, the disparity in valuations makes selective stock picking essential. He emphasized that market bottlenecks are constantly shifting and noted that while CPUs were previously ignored, a change in ratios identified by his firm in late March has brought them to the forefront of market attention.
Our Methodology
We sifted through the Vanguard US Quality Factor ETF holdings to identify stocks that have a track record of delivering earnings growth and have grown their EPS by at least 20% over the past 3 years. We limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. These stocks are also popular among analysts and elite hedge funds.
Note: All data was sourced on June 4.
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. Insider Monkey’s quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
8 Best Quality Growth Stocks to Buy
8. Fortinet Inc. (NASDAQ:FTNT)
Number of Hedge Fund Holders: 52
Fortinet Inc. (NASDAQ:FTNT) is one of the best quality growth stocks to buy. On May 6, Fortinet expanded its FortiGate G series with the launch of the 3500G and 400G next-generation firewalls. These new models are engineered to provide high-performance, ASIC-accelerated security that handles the demands of encrypted traffic, distributed environments, and AI-driven workloads without forcing a trade-off between speed and protection.
The FortiGate 3500G is designed for data center scale, offering 400Gb connectivity and hardware-enforced integrity protections to establish a foundation of verified trust. Simultaneously, the FortiGate 400G modernizes the enterprise edge, providing high-density performance and operational consistency that allows organizations to upgrade their infrastructure with minimal disruption.
Both platforms are integrated into the broader Fortinet Inc. (NASDAQ:FTNT) Security Fabric, using the FortiOS operating system and AI-powered threat intelligence. These additions provide organizations with native shadow AI detection, improved visibility into data flows, and centralized management to simplify operations and reduce complexity across hybrid network environments.
Fortinet Inc. (NASDAQ:FTNT) provides cybersecurity and convergence of networking and security solutions worldwide.
7. Expedia Group Inc. (NASDAQ:EXPE)
Number of Hedge Fund Holders: 62
Expedia Group Inc. (NASDAQ:EXPE) is one of the best quality growth stocks to buy. On May 20, Expedia entered into an agreement to acquire CarTrawler, an Irish B2B platform specializing in car rental, ground transport, and Insurtech solutions. This acquisition is a strategic move to advance Expedia’s goal of building the most comprehensive B2B travel platform by integrating CarTrawler’s extensive network of over 550 car rental and 500 mobility suppliers.
The partnership aims to unlock significant growth by combining CarTrawler’s specialized expertise with Expedia Group’s global scale and technology. Supply partners will gain access to a larger distribution network, while B2B demand partners and consumers will benefit from enhanced choice, competitive pricing, and seamless integration of ground transportation and insurance services.
This deal follows Expedia Group Inc.’s (NASDAQ:EXPE) previous acquisition of Tiqets, further diversifying its API offerings beyond lodging. Expected to close in H2 2026, the transaction remains subject to customary closing conditions and will allow CarTrawler to continue its mission as a core component of Expedia’s broader B2B engine.
Expedia Group Inc. (NASDAQ:EXPE) is an online travel company, providing travel products and services in the B2C, B2B, and Trivago segments. The company is based in Seattle, Washington, and was founded in 1994.
6. Trane Technologies (NYSE:TT)
Number of Hedge Fund Holders: 68
Trane Technologies (NYSE:TT) is one of the best quality growth stocks to buy. On May 20, Trane Technologies unveiled a new AI Lab and immersive showroom in Montréal, Canada, designed to accelerate the development of autonomous HVAC and transport refrigeration solutions. This innovation hub serves as a central point for researchers and engineers to advance the company’s mission of utilizing AI to lower carbon emissions and improve energy efficiency in the built environment.
The facility functions as both a collaborative development center and an experiential space where guests can observe how predictive models and agentic AI are actively transforming building operations. Building on the acquisition of BrainBox AI, the lab focuses on moving breakthrough concepts into practical, customer-ready applications that address the growing demand for sustainable and cost-effective climate technology.
Supported by partnerships with organizations like AWS and Concordia University, the lab emphasizes the importance of ethical and responsible innovation. By fostering collaboration among top technical talent, Trane Technologies aims to scale its digital solutions, ensuring that advancements in AI continue to drive meaningful environmental impact and long-term sustainability for its global customers.
Trane Technologies (NYSE:TT) is a climate innovation manufacturer. It supplies mission-critical cooling infrastructure for data centers, engineering high-capacity chillers and advanced liquid-cooling systems to manage the intense thermal loads of modern AI server halls.
While we acknowledge the potential of TT 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 TT and that has 100x upside potential, check out our report about the cheapest AI stock.
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