In this article, we will look at the 10 Best Extremely Profitable Stocks to Buy Now.
Can the S&P Hit 7,000 By the End of 2025?
Ed Yardeni, president of Yardeni Research, appeared on CNBC on November 27 to share insights on the market’s anticipated performance in 2025. He emphasized the significance of staying invested despite existing risks and high valuations, noting that the economy has shown resilience and interest rates have stabilized.
Yardeni pointed out that many new investors are gravitating toward small and mid-cap sectors, which he considers a sound strategy due to their relative affordability. He also highlighted the S&P 493 stocks as being undervalued compared to the Magnificent Seven, asserting that the overall market outlook remains positive despite potential tariff fluctuations. He believes that tax cuts and deregulation could enhance corporate earnings.
Yardeni attributed much of the market’s potential growth to an ongoing productivity boom, which he described as still being in its early stages. He noted that productivity levels have improved significantly from nearly zero in 2015 to around 2% currently, with historical precedents suggesting that such booms can reach as high as 4%. This improvement is driven by advancements in technology, which he argues will continue to drive productivity gains.
Read More: 10 Most Promising New Technology Stocks According to Hedge Funds and 10 Best Tech Stocks to Invest In On the Dip.
When discussing whether this boom is primarily driven by artificial intelligence (AI), Yardeni acknowledged AI’s importance but also pointed to other technological advancements in cloud computing, robotics, and automation as contributing factors.
He identified a shortage of skilled labor as a key driver of productivity growth and explained that technology has enhanced efficiency, allowing wages to rise faster than prices, thus stimulating economic activity. In his concluding remarks, Yardeni projected that the S&P 500 could reach 7,000 by the end of 2025 and potentially hit 10,000 by the end of the decade, reflecting his bullish outlook on market performance fueled by these economic dynamics.
With that let’s take a look at the 10 best extremely profitable stocks to buy now.
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Our Methodology
To compile the list of the 10 best extremely profitable stocks to buy now, we used the Finviz stock screener, Yahoo Finance, and Seeking Alpha. Using the screener, we shortlisted stocks that have grown their revenue and net income by at least 25% over the past 5 years. After sorting our initial list by market cap, we cross-checked the revenue and net income growth rates from Seeking Alpha. We also considered the trailing twelve-month net income and selected stocks that had a trailing twelve-month net income of more than $500 million. Lastly, we ranked the stocks in ascending order based on the number of hedge fund holders in Q3 2024, sourced from Insider Monkey’s database.
Why do we care about 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. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Extremely Profitable Stocks to Buy Now
10. XP Inc. (NASDAQ:XP)
5 Year Revenue Growth: 30.20%
5 Year Net Income Growth: 40.36%
TTM Net Income: $741.06 Million
Number of Hedge Fund Holders: 25
XP Inc. (NASDAQ:XP) offers technology-driven financial services platforms. The company provides various investment products, including stocks, bonds, mutual funds, and pension plans. They provide access to over 800 different financial products, allowing customers to choose from a wide range of investment options.
XP Inc. (NASDAQ:XP) has been focused on becoming a leader in retail investments, emphasizing the importance of net new money consistency and enhancing its product offerings across various segments. It also continues to leverage technology to improve its service delivery and product offerings. During the third quarter results for fiscal 2024, the company indicated that it aims to maintain a BIS (Bank for International Settlements ratio) ratio between 16% and 19% by 2026 and distribute over 50% of profits as dividends during this period.
Financially speaking, XP Inc. (NASDAQ:XP) posted strong results. Its total client assets reached BRL 1.21 trillion ($210 billion), representing a 12% increase year-over-year, indicating robust growth in client investment. Moreover, the company reported BRL 31 billion ($5.36 billion) in net new money for the quarter, which is a remarkable 124% growth compared to the previous year. Notably, BRL 25 billion ($4.32 billion) of this amount came from retail clients, highlighting a stride towards its goal of becoming a leader in retail investment.
HL International Equity Strategy made the following comment about XP Inc. (NASDAQ:XP) in its first quarter 2023 investor letter:
“Our Financial Services holdings lagged the sector index, with SE Banken, the Swedish lender, and AIA Group, the Asian life insurer, dragging down returns in a sector made nervous by the troubles of Credit Suisse and the bank failures in the US. XP Inc. (NASDAQ:XP), a Brazilian broker-dealer and financial services company, reported weak quarterly results due to the negative effects of higher interest rates on revenue growth.”
9. Joint Stock Company Kaspi.kz (NASDAQ:KSPI)
5 Year Revenue Growth: 38.36%
5 Year Net Income Growth: 43.76%
TTM Net Income: $1.96 billion
Number of Hedge Fund Holders: 26
Joint Stock Company Kaspi.kz (NASDAQ:KSPI) is one of the best extremely profitable stocks to buy now. It operates as a financial technology and e-commerce company in Kazakhstan. The platform allows users to make payments, manage finances, do online shopping, book tickets, and much more.
What’s impressive about the company is the fact that it became the first company from Kazakhstan to list in the US in January 2024. Moreover, the company has also been doing great financially. It has grown its top line by 39% and bottom line by 44% over the past 5 years. Moreover, its trailing twelve-month net income stands close to $2 billion.
Joint Stock Company Kaspi.kz (NASDAQ:KSPI) continued its robust performance in Q3 of fiscal 2024. The company grew its revenue by 28% and net income by 18%, year-over-year. The growth was on the back of an impressive 43% year-over-year growth within its marketplace segment.
Joint Stock Company Kaspi.kz (NASDAQ:KSPI) has scaled its marketplace platform in the top three cities of the country and was able to grow its gross merchandise value by 88%. Moreover, the number of active customers also improved from 422,000 in Q3 2023 to 725,000 in the recent quarter. Looking ahead, management has strategically acquired a 65.41% stake in Hepsiburada, a prominent Turkish e-commerce platform. The deal is expected to close during the Q1 of fiscal 2025.
8. RenaissanceRe Holdings Ltd. (NYSE:RNR)
5 Year Revenue Growth: 28.24%
5 Year Net Income Growth: 42.01%
TTM Net Income: $3.56 Billion
Number of Hedge Fund Holders: 29
RenaissanceRe Holdings Ltd. (NYSE:RNR) is a company that specializes in reinsurance and insurance. The company operates through two main segments including Property Segment and Casualty and Specialty Segment. Reinsurance products include providing insurance to other insurance companies helping them manage risk by covering some of their potential losses. Insurance products offer direct insurance solutions, including coverage directly to clients for various risks.
During the third quarter results for fiscal 2024, the company reported strong financial performance, highlighting key achievements and strategies that have contributed to its success. The company earned over $540 million in operating income for the quarter, resulting in a 22% return on average common equity. Year-to-date, the total operating income reached $1.8 billion, with a 26% return on equity.
Management attributed its success to three main areas including underwriting, investments, and capital partners business. RenaissanceRe Holdings Ltd. (NYSE:RNR) has been able to expand aggressively in favorable market conditions, particularly in its Property and Specialty segments, which have seen year-to-date topline growth rates between 35% and 75%. Moreover, Elevated interest rates have allowed the company to generate significant investment income. Net investment income for the quarter was $423.9 million, up 28.8% year-over-year.
Looking ahead, RenaissanceRe Holdings Ltd. (NYSE:RNR) expects continued opportunities for growth in both its Property Catastrophe and Casualty segments. The demand for reinsurance is projected to increase, particularly with an estimated rise of $10 billion in U.S. catastrophe limit purchases by 2025. It is one of the best extremely profitable stocks to buy now.
TimesSquare Capital U.S. Focus Growth Strategy stated the following regarding RenaissanceRe Holdings Ltd. (NYSE:RNR) in its first quarter 2024 investor letter:
“Earnings for RenaissanceRe Holdings outstripped expectations as RenaissanceRe Holdings Ltd. (NYSE:RNR) showed better rates of underwriting, higher fee income, and increased investment income—all of which also exceeded levels of industry peers. Pricing also appeared to remain strong for this year and into 2025, and the result lifted RenRe’s shares by 20%.”
7. Futu Holdings Limited (NASDAQ:FUTU)
5 Year Revenue Growth: 62.46%
5 Year Net Income Growth: 94.49%
TTM Net Income: $548.6 Million
Number of Hedge Fund Holders: 29
Futu Holdings Limited (NASDAQ:FUTU) is a tech-driven online brokerage and wealth management platform based in Hong Kong. The company offers a platform called Futu NiuNiu, where users can buy and sell various financial products like stocks, options, and exchange-traded funds (ETFs) online.
The brokerage serves customers in key countries including the US, China, Hong Kong, Singapore, Australia, Japan, and more. It is one of the best extremely profitable stocks to buy now. Not only has Futu Holdings Limited (NASDAQ:FUTU) grown its top line and bottom line by 62% and 94% over the past 5 years, respectively, but its trailing twelve-month net income stands at $548.6 million.
As the overall economic conditions around the world are easing with Federal Reserves cutting interest rates, brokerage firms like Futu Holdings Limited (NASDAQ:FUTU) are rallying. The stock price of the company rallied more than 72% for two weeks from the day China Stimulus was announced.
While short-term price movements are encouraging, what’s more impressive is its third-quarter results for fiscal 2024. The company reported that its number of paying clients rose by 33.1% year-over-year, to reach 2.2 million. Whereas, its registered clients increased by 22.8% to reach 4.3 million. As a result, its total client assets surged by 48.1% to approximately HK$693.4 billion ($89 billion), with daily average client assets at HK$593.2 billion ($76.27 billion), up 23.4% from the previous year.
Futu’s CEO, Leaf Hua Li, noted that the company experienced robust growth in established markets like Hong Kong and Singapore, while Malaysia remained the top contributor to new paying clients. He emphasized the effectiveness of their marketing strategies and product offerings in attracting clients.
6. Super Micro Computer, Inc. (NASDAQ:SMCI)
5 Year Revenue Growth: 33.68%
5 Year Net Income Growth: 75.82%
TTM Net Income: $1.21 Billion
Number of Hedge Fund Holders: 33
Super Micro Computer, Inc. (NASDAQ:SMCI), also known as Supermicro is a technology company that specializes in creating high-performance servers and storage systems crucial for various applications, including cloud computing, artificial intelligence (AI), and data centers.
Super Micro Computer, Inc. (NASDAQ:SMCI) was quickly recognized as one of the winners in artificial intelligence as the company posted impressive revenue growth on the back of building data centers for third parties. It has grown its top line by 34% and bottom line by 76% during the past 5 years.
However, the stock recently took a hit and has been facing a series of challenges including the failure to file the 10-K form for the fiscal year that ended on June 30, 2024. The deadline for this filling was August 29, 2024, which has still not yet been met. The delay in filling the 10-K form means that the company can be delisted from NASDAQ and would have to trade over the counter. Management has submitted a compliance plan to The Nasdaq Stock Market for an extension period to regain compliance with the Nasdaq continued listing requirements, which if approved will give the company 180 days to fill the said form. Another hit for the stock came when Ernst & Young resigned stating that it was unwilling to associate itself with management’s prepared financial statements.
The delay in filling and the fall in share price is impacting the business of the company. On November 5, Super Micro Computer, Inc. (NASDAQ:SMCI) announced an update regarding its first quarter results for fiscal 2025, which ended September 30, 2024. The company expects net sales in the range of $5.9 billion to $6 billion down from the previous range of $6.0 billion to $7.0 billion. However, on the bright side, the new range at the midpoint is still up 181% year-over-year, driven by strong AI demand from its old and new customers.
Despite the challenges, it is still one of the best extremely profitable stocks to buy now. The stock was held by 33 hedge funds in Q3 2024 and the company has made $1.21 billion in net income over the trailing twelve-month period.
Columbia Acorn Fund stated the following regarding Super Micro Computer, Inc. (NASDAQ:SMCI) in its Q3 2024 investor letter:
“Super Micro Computer, Inc. (NASDAQ:SMCI) had a tough quarter due to a confluence of negative events. It declined but is still up significantly for the year. While demand for the company’s AI server racks remains strong, with revenue up over 100%, gross margins have fallen sharply for two straight quarters, implying a price war. In addition, Super Micro was the subject of a short-seller report and a delay in filing its annual report with the SEC. We have been taking profits in the stock all year and have only a small position, which we are maintaining given the strong performance and demand for Super Micro’s AI racks and a depressed stock valuation.”
5. VICI Properties Inc. (NYSE:VICI)
5 Year Revenue Growth: 33.92%
5 Year Net Income Growth: 36.66%
TTM Net Income: $2.81 Billion
Number of Hedge Fund Holders: 35
VICI Properties Inc. (NYSE:VICI) is a prominent real estate investment trust (REIT) that primarily focuses on owning and acquiring properties related to gaming, hospitality, and entertainment. The company specializes in gaming and experiential properties, providing exposure to a high-growth segment of real estate that includes iconic venues like Caesars Palace and MGM Grand.
Presently, it owns 93 experimental assets including 54 gaming properties and 39 other experiential properties across the United States and Canada. The company’s massive exposure to the gaming industry is one of its biggest strategic moats. This is because VICI Properties Inc. (NYSE:VICI) enters into multi-decade contracts with gaming industry operators. Considering the complex real estate regulations its tenants cannot relocate easily and quickly, thereby giving the company a healthy occupancy rate. The company has not only maintained a 100% occupancy rate since its IPO, even in COVID-19 but also enjoys its leases linked to the Consumer Price Index (CPI). This means that the company can raise the rent with inflation.
During the third quarter of fiscal 2024, VICI Properties Inc. (NYSE:VICI) posted a total revenue of $964.7 million, up 6.7% year-over-year. Moreover, its net income attributable to shareholders also improved by 31.7% during the same time. It is one of the best extremely profitable stocks to buy now, with 35 hedge funds having stakes in the company as per Insider Monkey’s Q3 2024 data.
4. First Citizens BancShares, Inc. (NASDAQ:FCNCA)
5 Year Revenue Growth: 41.29%
5 Year Net Income Growth: 42.24%
TTM Net Income: $2.53 Billion
Number of Hedge Fund Holders: 46
First Citizens BancShares, Inc. (NASDAQ:FCNCA) is a financial holding company that operates primarily through its subsidiary, First-Citizens Bank & Trust Company. The services provided by the company range from basic banking services like checking and savings accounts, loans for homes, cars, and businesses, as well as credit cards, to Commercial Banking, Silicon Valley Banking, and Rail Segment.
The bank stands out due to its Silicon Valley Banking, through which it caters to businesses in innovation sectors such as healthcare and technology. This segment also serves private equity firms and venture capitalists, offering them financial products that support their investments.
First Citizens BancShares, Inc. (NASDAQ:FCNCA) demonstrated resilience in its third-quarter performance despite some challenges related to loan origination and net income declines. The bank reported a net income of $624 million, which represents a 15% decrease compared to the same quarter in the previous year. Net income for the quarter was mainly impacted by acquisition-related expenses of $46 million, intangible asset amortization of $15 million, and other noninterest expenses of $8 million.
However, on the bright side, the total deposits of the bank improved by $495 million subsequently reaching $151.57 billion. Management attributed the improvement in deposits to the growth in the General Bank and SVB Commercial segments. General Bank segment deposits increased by $690 million and the SVB commercial segment improved by $54 million subsequently during the quarter. First Citizens BancShares, Inc. (NASDAQ:FCNCA) is one of the best extremely profitable stocks to buy now.
Greenlight Capital stated the following regarding First Citizens BancShares, Inc. (NASDAQ:FCNCA) in its Q2 2024 investor letter:
“We exited a few positions during the quarter, including, First Citizens BancShares, Inc. (NASDAQ:FCNCA): The bargain acquisition of the corpse of Silicon Valley Bank worked out well. The shares appreciated more than 80% and no longer appear cheap.”
3. Apollo Global Management, Inc. (NYSE:APO)
5 Year Revenue Growth: 77.12%
5 Year Net Income Growth: 64.20%
TTM Net Income: $5.56 Billion
Number of Hedge Fund Holders: 82
Apollo Global Management, Inc. (NYSE:APO) is a large investment firm that manages money for various clients, including pension funds and individual investors. The company focuses on three key areas including Asset Management, Retirement Services, and Principal Investing.
What investors like about the company is the fact that the investment firm has a healthy revenue mix coming from both asset management and annuity provider roles in the market. In a recent investors day event, the firm laid down its 5-year growth plan. The plan outlined its aim for average annual growth in Fee-Related Earnings (FRE) of 20% and 10% in supplemental revenue earnings, with both reaching $10 billion by 2029. They also projected Adjusted Net Income to more than double to $15 per share by 2029, alongside capital generation of $21 billion.
The third quarter results for fiscal 2024 of Apollo Global Management, Inc. (NYSE:APO) were in alignment with its 5-year plan. It achieved a record FRE, exceeding $1.5 billion year-to-date, driven by significant revenues from its credit management sector. Moreover, credit management fees grew by 20% year-over-year, with inflows surpassing $140 billion in the past year, indicating robust demand for their credit products.
Supplemental revenue earnings also reflected strong organic growth of $20 billion in the quarter, contributing to a total of $2.4 billion year-to-date. Looking ahead, Apollo Global Management, Inc. (NYSE:APO) is focused on maintaining cost discipline, with expenses rising by only 11% year-to-date despite significant growth in revenues. The company anticipates continued revenue growth trends into the fourth quarter, supported by a strong origination pipeline and an organic capital formation target of $120 million for 2024.
Baron FinTech Fund stated the following regarding Apollo Global Management, Inc. (NYSE:APO) in its Q2 2024 investor letter:
“Strength in Tech-Enabled Financials was broad based, led by gains from alternative asset manager Apollo Global Management, Inc. (NYSE:APO) and specialty insurer Arch Capital Group Ltd. Apollo continues to benefit from disruptive trends in financial services, most notably the shift of retirement assets into higher-yielding private credit given the company’s dual role as an asset manager and an annuity provider. “
2. Advanced Micro Devices, Inc. (NASDAQ:AMD)
5 Year Revenue Growth: 32.17%
5 Year Net Income Growth: 54.27%
TTM Net Income: $1.83 Billion
Number of Hedge Fund Holders: 107
Advanced Micro Devices, Inc. (NASDAQ:AMD) is an international company that specializes in semiconductors, which are essential components used in electronic devices. In simple terms, AMD designs and creates the chips that power computers, gaming consoles, and data centers. The company operates through four main segments including Data Centers, Client, Gaming, and Embedded segment.
The company is making significant strides in introducing new products that are powering data centers and the AI revolution. On November 12, the company announced the Versal Premium Series Gen 2, a new line of products designed to enhance system performance for demanding data-intensive tasks. With the increasing demand for AI capabilities, the new product line is designed to accelerate AI model training and inference, making it a valuable asset for businesses focusing on AI development.
During its third-quarter results for fiscal 2024, Advanced Micro Devices, Inc. (NASDAQ:AMD) reported net revenue of $6.8 billion, indicating an 18% increase year-over-year. The gross margin of the company stood at 50%, with $724 million in operating income. The company’s CEO, Dr. Lisa Su, noted that the company achieved record revenue primarily due to increased sales of its EPYC CPU and Instinct data center products and strong demand for Ryzen PC processors.
For the fourth quarter of 2024, Advanced Micro Devices, Inc. (NASDAQ:AMD) anticipates revenue to be around $7.5 billion, with a possible variation of $300 million. This forecast indicates a 22% increase compared to the same quarter last year and a 10% increase from the previous quarter.
Columbia Threadneedle Global Technology Growth Strategy stated the following regarding Advanced Micro Devices, Inc. (NASDAQ:AMD) in its Q2 2024 investor letter:
“Shares of Advanced Micro Devices, Inc. (NASDAQ:AMD) lagged the market after the company reported earnings results that, while generally strong, left the market wanting more. The company reported AI revenue of ~$600 million and increased its forward-looking outlook for AI revenue growth, but shares took a breather, as results missed elevated expectations after the stock’s strong performance. Despite the stock’s underperformance during the quarter, the company’s AI story remains very much intact. The growth outlook for the company is supported by better cloud demand, enterprise recovery and continued share gains ahead of the company’s new AI product launch.”
1. NVIDIA Corporation (NASDAQ:NVDA)
5 Year Revenue Growth: 62.43%
5 Year Net Income Growth: 92.10%
TTM Net Income: $53.01 Billion
Number of Hedge Fund Holders: 193
NVIDIA Corporation (NASDAQ:NVDA) is a leader when it comes to AI infrastructure. Previously its Gaming Processing Units (GPUs), revolutionized the PC gaming market and redefined computer graphics. At present its GPUs are powering the AI infrastructure from computers to data centers, autonomous driving vehicles, and robots.
While the Gaming segment engine of the company is still running, its application in the data center industry has shifted gears for the company. The company has grown to become the best extremely profitable stock to buy now. It has grown its revenue by 62% and net income by 92% over the past 5 years. Whereas, its trailing twelve-month net income stands at an impressive $53.01 billion.
To cater to the growing needs of data centers and artificial intelligence, NVIDIA Corporation (NASDAQ:NVDA) launched its Hopper platform in September 2022, which is a GPU architecture designed to handle high-performance computing. Currently, the Hopper platform demand for data centers is leading the company. During the third quarter results for fiscal 2025, total revenue of $35.1 billion for the company was driven by record year-over-year Data Center revenue growth of 112%.
The Data Center segment witnessed its H200 GPU sales increase to double-digit billions of dollars, which the management categorized as the fastest product ramp-up in its history. Moreover, its latest Blackwell platform architecture is also in full production and management anticipates its demand for Blackwell and Hopper platform will continue to increase due to their effective use cases in the artificial intelligence industry.
Columbia Seligman Global Technology Fund stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q3 2024 investor letter:
“The fund held an underweight position in NVIDIA Corporation (NASDAQ:NVDA) relative to the S&P North American Technology Sector, which was a headwind on performance following impressive returns from the company in 2023 and the first two quarters of 2024. NVIDIA’s stock fell during periods of the quarter after the company reported second quarter earnings. While the earnings came in higher than expectations, investors were concerned that the company did not guide earnings high enough, signaling a potential slowdown in AI buildout. NVIDIA’s demand remains strong and the company has forecast orders for upcoming quarters. The question that remains is whether the company can meet the demand for its AI processors and connectivity chips. Our team continues to remain cautious on NVIDIA’s high customer concentration. Microsoft and Meta have driven a significant amount of the company’s revenue, which presents added risk.”
While we acknowledge the potential of NVIDIA Corporation (NASDAQ:NVDA) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for a promising AI stock that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
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