We recently published a list of the 15 Best Growth Stocks to Buy for the Next 3 Years. In this article, we are going to take a look at where Eli Lilly and Company (NYSE:LLY) stands against other growth stocks to buy for the next 3 years.
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.
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).
An array of pharmaceutical pills with the company’s logo on the bottle.
Eli Lilly and Company (NYSE:LLY)
3-Year Revenue CAGR: 16.73%
Number of Hedge Fund Holders: 115
Eli Lilly and Company (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 and Company (NYSE:LLY)’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 Company (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.”
Overall, LLY ranks 3rd on our list of the best growth stocks to buy for the next 3 years. While we acknowledge the growth potential of LLY as an investment, 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 LLY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
