Technology stocks went from celebration to rout within two sessions this month. On Wednesday, November 4, equities rallied after Democrats swept Congress in the midterm elections. By Thursday, the S&P 500 had fallen 4.36% and the Dow had lost 3.44%, while the Nasdaq Composite closed 5.52% lower, its worst day since April 2025. The drop pushed the tech-heavy index into correction territory, at least 10% below its October 6 record close.
The selling did not stop there, and the S&P 500 went on to post its worst week since June. Truist chief markets strategist Keith Lerner called the action “something of a buyers’ strike” in technology. Breadth was thin, with only about one in seven S&P 500 stocks rising on the day of the steepest decline.
A Midterm Shock Rattles the Market’s Growth Engine
The election result mattered for reasons that go beyond party control. eToro market analyst Jakub Rochlitz said rising electricity prices turned data-center construction into a political issue during the campaign. In his view, markets now assume that the artificial intelligence buildout will be slower and more expensive, which rewrites growth expectations for every company along the supply chain.
The damage was sharpest in semiconductors. The Philadelphia Semiconductor Index plunged 12% and the Nasdaq-100 fell 6.4%, the biggest one-day declines for both gauges since March 2020. Readers following the group can find more names in our list of the most promising technology stocks to buy right now.
Rising Rates and Heavy Debt Put Growth Valuations to the Test
Anxiety about AI spending had been building well before the vote. Bloomberg reported that interest rates were climbing, borrowing to fund the buildout was growing, and public backlash against data centers was spreading. Investors are now demanding higher yields from heavily indebted data-center builders, which raises the cost of every new project.
The numbers show how quickly sentiment turned. An October 30 sell-off erased more than $1 trillion of tech market value, and chipmakers surrendered more than $1.5 trillion on November 5 alone. Analyst-driven picks from the same corner of the market are collected in our list of the best aggressive growth stocks to buy according to Wall Street analysts.
Not everyone read the move as a break in the trend. Argent Capital Management portfolio manager Jed Ellerbroek told Reuters that the selling felt like capitulation among the beneficiaries of data-center spending, though the size of the move looked outsized to him. His comment shows that even investors who saw capitulation in data-center names questioned the scale of the decline.
Photo by Pascal Bernardon on Unsplash
Our Methodology
To compile this list, we reviewed rankings of the best growth stocks to own over the next five years from financial websites over the past 12 months. From the stocks that came up, we kept the companies with a five-year EPS growth rate above 25%. We then ranked them by their average upside potential, in ascending order, as of November 11, 2026. We also list each stock’s number of hedge fund holders as of Q2 2026, from our database of 1,006 hedge funds.
At Insider Monkey, we are obsessed with what hedge funds do. 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 strategy selects 14 small-cap and large-cap stocks every quarter and has returned 612% since May 2014, beating its benchmark by 375 percentage points (see more details here).
10 Best Growth Stocks for the Next 5 Years
10. Block (NYSE:XYZ)
Average Upside Potential: 18%
EPS Growth Past 5 Years: 36.61%
Number of Hedge Fund Holders: 76
Investors cheered Block’s third-quarter report because growth finally showed up in profit. Adjusted operating income climbed 92%, and the shares surged the next day. Block runs Square for sellers and Cash App for consumers, and both contributed. Square’s gross payment volume grew at its fastest pace since early 2023, while Cash App lending originations rose 40%, a sign that the consumer side is leaning into credit.
Bank of America analyst Matthew O’Neill reaffirmed a Buy rating on November 4 and raised his price target to $117 from $115. He said the quality of growth continues to improve, and he is positive on early 2027, when management expects gross profit to grow 15%. That view matters because the company has spent years being judged on how efficiently it turns gross profit into earnings.
Costs remain the open question. A Justice Department accrual weighed on reported results, and GAAP operating income grew far more slowly than the adjusted figure. Our analysis of how Block’s lending-led gross profit growth squares with its costs takes up that question, including what the shift in mix means for margins.
9. Shopify (NASDAQ:SHOP)
Average Upside Potential: 18%
EPS Growth Past 5 Years: 28.70%
Number of Hedge Fund Holders: 82
Shopify’s pitch is that artificial intelligence sends shoppers toward merchants rather than away from them. Management said traffic from AI-driven sources rose 2.6 times in the third quarter, and orders tied to that traffic rose 3.3 times, evidence that chatbot-led discovery is already turning into sales. Shopify lets merchants run stores, payments and shipping from one dashboard, so any new buying channel flows through its checkout. Business-to-business volume also grew far faster than the platform overall, which widens the set of buyers that checkout can reach.
The report was not flawless. Subscription revenue and gross merchandise volume landed slightly short of expectations, and the shares dropped sharply on November 3 before recovering part of the loss the next day. Even so, RBC Capital Markets analyst Paul Treiber maintained an Outperform rating and a $200 price target after the results, one of several firms that stayed constructive as the company leaned into agentic commerce.
We recently looked at whether Shopify’s AI opportunity is bigger than it looks. Management has guided fourth-quarter revenue growth to the low 30s in percentage terms, which gives investors the next checkpoint for that thesis.
8. Monolithic Power Systems (NASDAQ:MPWR)
Average Upside Potential: 22%
EPS Growth Past 5 Years: 29.77%
Number of Hedge Fund Holders: 69
Rosenblatt analyst Kevin Cassidy upgraded Monolithic Power Systems to Buy from Neutral on October 30 and raised his price target to $1,700 from $1,575, pointing to a third quarter that beat expectations and lifted guidance in enterprise data and communications. The quarter gave him plenty to work with. Revenue passed $1 billion for the first time, and enterprise data sales grew 164.6% as customers building AI servers bought more of the company’s power chips.
Monolithic Power Systems designs the power chips that sit beside the processors in those servers. Management said capacity is expanding toward $8 billion of annual revenue by the second half of 2027, and a first large data converter design win is set to ramp that year. Consumer sales fell, a reminder that the growth is concentrated in data-center markets, and the company also bought back stock during the quarter.
Investors have started to ask how much of the profit jump reflects lasting pricing power. That margin question is the subject of our look at Monolithic Power’s margin jump and why it matters for the next downturn.
7. Arista Networks (NYSE:ANET)
Average Upside Potential: 26%
EPS Growth Past 5 Years: 40.70%
Number of Hedge Fund Holders: 91
Piper Sandler analyst James Fish raised his price target on Arista Networks to $261 from $240 on November 4 and kept an Overweight rating, calling the stock a top pick. He pointed to further acceleration in the third quarter, strong profitability and an initial 2027 view that supports the durability of growth.
The results gave him support. Revenue grew 58.5% to $3.66 billion, the fastest pace since the company’s IPO, and the non-GAAP operating margin reached 49.1%. Arista Networks sells client-to-cloud networking for AI, data center, campus and routing. The shares rose the day after the report. Investors also like that management’s fourth-quarter guidance points to more growth, not a pause.
The risks are specific and tied to how the company sources and sells its products. Arista depends on a predominant merchant silicon vendor for key components, and a handful of large customers account for much of its sales. Either dependency could limit how fast the company can grow, and investors weigh both against the strength of demand. You might also be interested in reading our piece on what Arista’s cash pile and lack of debt are worth.
6. Taiwan Semiconductor Manufacturing (NYSE:TSM)
Average Upside Potential: 33%
EPS Growth Past 5 Years: 25.67%
Number of Hedge Fund Holders: 249
Bernstein analyst Mark Li lifted his price target on Taiwan Semiconductor Manufacturing to $600 from $554 on November 4 and kept an Outperform rating. His reasoning was that demand from Amazon’s and Google’s in-house custom chips is arriving faster than expected, which pulls more of the AI market toward the contract chipmaker’s most advanced factories. He applied a forward earnings multiple to estimates running from late 2027 into 2028, so the call is a bet on durability.
Results show where that demand is landing. Taiwan Semiconductor Manufacturing builds chips designed by other companies, and high-performance computing made up 68% of its third-quarter net revenue, while October revenue jumped 59.7% from a year earlier. Investors like that the mix is tilting toward leading-edge nodes, which carry the highest prices. The company spent US$13.84 billion on capital expenditures in the quarter to build capacity for those chips.
For more on the cost side of that story, see our look at TSMC’s record AI demand and its growing cost. Whether 2-nanometer production, which is already contributing to wafer revenue, can extend the pace into 2027 is the next question for investors.
5. Amphenol (NYSE:APH)
Average Upside Potential: 34%
EPS Growth Past 5 Years: 27.86%
Number of Hedge Fund Holders: 112
Investors like that Amphenol’s growth is arriving with margins attached. Third-quarter sales rose 65%, helped by acquisitions, and the adjusted operating margin held at 29.7%. Amphenol makes the connectors and interconnect systems that carry signals and power inside servers, and its information technology and data communications unit, which sells to data-center customers, has become nearly half of sales. Management said about three-quarters of that unit’s sales are tied to AI, and orders outran shipments in the quarter, which builds backlog for later quarters.
Truist Securities analyst William Stein maintained a Buy rating and raised his price target to $112 from $107.50 on October 29, citing the company’s margin-driven growth outlook. Management backed that confidence with a higher dividend and a $4 billion share repurchase program, raised its outlook for the acquired CommScope business, and guided fourth-quarter sales higher again.
Our ranking of 12 tech stocks everyone is talking about covers more of the group. For Amphenol itself, the question is whether orders keep outrunning shipments once the AI buildout hits the slower, more expensive phase that markets now expect.
4. Broadcom (NASDAQ:AVGO)
Average Upside Potential: 50%
EPS Growth Past 5 Years: 49.76%
Number of Hedge Fund Holders: 170
D.A. Davidson analyst Gil Luria upgraded Broadcom to Buy from Neutral on October 27 and raised his price target to $400 from $350. He argued that a valuation of about 16 times estimated 2027 earnings leaves room, that the AI cycle is not over yet, and that public offerings from leading AI labs could fund further spending on custom chips.
Investors reacted. Broadcom posted its biggest one-day gain in almost a year on November 9, as semiconductor stocks bounced back from the sell-off that opened the month. The call gave them a concrete argument for owning the stock when AI spending fears were at their peak: the valuation had come down while the earnings outlook had not. Broadcom designs custom AI accelerators and networking chips for large cloud operators, and it also owns the VMware infrastructure software business, which provides steady cash flow alongside the chip boom.
Whether VMware can stay a durable cash engine is a question we explored for Broadcom in our piece on customers reassessing private clouds. The next checkpoint is the company’s earnings report on December 9.
3. SK Hynix (NASDAQ:SKHY)
Average Upside Potential: 84%
EPS Growth Past 5 Years: 49.26%
Number of Hedge Fund Holders: N/A
Rosenblatt analyst Kevin Cassidy kept a Buy rating on SK Hynix and raised his price target to $400 from $320 on October 28, the day the memory maker reported third-quarter results. He cited a 20% sequential rise in average selling prices for DRAM, the memory used in AI servers.
Investors like what that pricing did to profitability. SK Hynix makes the memory chips used in AI servers, and its operating margin reached 80%. The company said long-term agreements already cover more than half of its 2027 and 2028 capacity. It is a leading supplier of the high-bandwidth memory that sits next to AI accelerators, so pricing power there flows directly into earnings. Management expects fourth-quarter shipments of its newest generation, HBM4, to overtake the previous one, and it sees a supply shortage lasting through 2030.
China is the main risk, because the country was a large share of first-quarter sales and local rival CXMT is gaining ground. The depositary shares slid sharply on November 5 after a Wedbush note raised export-license concerns. Whether margins that high can hold is the subject of our look at SK Hynix’s operating margin.
2. Nvidia (NASDAQ:NVDA)
Average Upside Potential: 85%
EPS Growth Past 5 Years: 95.27%
Number of Hedge Fund Holders: 285
Morgan Stanley analyst Joseph Moore kept an Overweight rating and a $300 price target on Nvidia on November 11, even as the bank removed the stock from its top picks under a stop-loss policy. His reasoning was that the AI buildout is strong and durable, with demand still exceeding supply.
That conviction is being tested. Nvidia has fallen about 30% from its October 6 high, and the board has opened an independent investigation into CEO Jensen Huang’s alleged relationship with a suspected Chinese spy. Nvidia supplies the graphics processors that power most AI data centers, so investors are weighing leadership risk against the demand picture that analysts keep describing. They still like the order book, but leadership questions are a new kind of risk for a stock that has traded mainly on demand data.
A side of the business that gets less attention is covered in our piece on Nvidia’s push to expand its autonomous driving opportunity. The next catalyst is the earnings report due November 17, where Wells Fargo analyst Aaron Rakers expects fiscal fourth-quarter revenue of $126.4 billion against a Street estimate of $124.3 billion.
1. Micron Technology (NASDAQ:MU)
Average Upside Potential: 98%
EPS Growth Past 5 Years: 70.65%
Number of Hedge Fund Holders: 184
Goldman Sachs analyst James Schneider reiterated a Neutral rating and a $1,250 price target on Micron Technology on November 10, though his reasoning leaned constructive. He said risk and reward are becoming more attractive because strong free cash flow looks highly probable in coming quarters.
Micron makes the memory chips used in AI servers, and the stock has given investors a volatile few days to test that view. The shares fell more than 15% over five sessions on fears that AI capital spending would slow after the midterms, then jumped 13.19% on November 11 after CoreWeave raised its outlook.
The swing shows how closely the stock now tracks sentiment toward data-center builders, the customers for its memory chips. Investors like the earnings power, since the company has been reporting some of the highest margins in the semiconductor industry, which is why its low multiple draws attention.
Why Micron trades at a low earnings multiple despite high margins is a question we took up recently. The Street expects earnings to grow at least 17% next fiscal year, which keeps the focus on whether memory pricing holds.
READ NEXT: Micron (MU) Looks Cheap at 5 Times Forward Earnings. Can Its Profit Boom Last? and Nvidia (NVDA) Is Trading Like Growth Will Stop. The Numbers Say Otherwise.
