In this article, we will take a look at the 10 best growth stocks to invest in now.
What Does the Santa Claus Rally Mean for Stocks?
Is a December rally in store for stocks in 2024? Some investors are expecting a surge in stocks from the 24th of December to the 3rd of January, 2025, also referred to as the Santa Claus Rally. On December 17, Ryan Detric, Chief Market Strategist at Carson Group, Joined Catalysts on Yahoo Finance to discuss whether he expects December to be a record-breaking month for the stock market.
Historically, the first half of December is usually slow for the stock market, while the second half is faster, suggested Detric. He also added that compared to election years in the past, this December has been very “flattish” so far. He also suggested that the Fed is going to continue the easing cycle and with the CPI declining, the current market conditions are favorable. Detrick then added that despite macroeconomic conditions and the performance of the Dow Jones index recently, he expects to see a record surge this month and expects “Santa Claus” to make an appearance this year.
“It’s a Bullish Environment for Big Tech”
Since the elections, stocks have been rallying with high hopes for the future. On December 18, Dan Ives, Managing Director at Wedbush Securities, joined Market Domination on Yahoo Finance to discuss his outlook on Big Tech and the new administration. Ives emphasized that the autonomous robotics and disruptive technologies sectors are going to benefit strongly from the new administration and its policies, despite concerns over tariffs. He also discussed the growing relationship between the new administration and Elon Musk, and how the two parties “need each other” to thrive, suggesting that Musk’s company has solid growth potential in the coming year and AI innovation will strengthen the collaboration immensely.
He also added that the environment is extremely bullish for Big Tech and expects growth in the coming year. Ives shared that while there are a few road bumps, especially from the Chinese market, the environment in retrospect is positive. Speaking of the electric vehicle market, he emphasized that new policies in the US coupled with international consolidation, especially in Europe and Asia, will benefit EV makers in the United States immensely.
The expectations from growth stocks are immense as the AI revolution takes precedence. That said, let’s take a look at the 10 best growth stocks to invest in now.
A financial analyst looking at a monitor displaying the stocks of the public company.
Our Methodology
To come up with the 10 best growth stocks to invest in now, we went over multiple rankings on the internet to compile an initial list of growth stocks. We then examined the hedge fund sentiment of each stock and picked the most popular ones. Our list is in ascending order of the number of hedge fund holders as of Q3 2024.
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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Growth Stocks To Invest In Now
10. Micron Technology, Inc. (NASDAQ:MU)
Number of Hedge Fund Holders: 107
Micron Technology, Inc. (NASDAQ:MU) ranks 10th on our list of the best growth stocks to invest in. Its primary offerings include memory and storage products for computers, consumer electronics, artificial intelligence use cases, servers, and automobiles. The company has been making significant waves in AI.
On October 23, the company was added to NVIDIA’s recommended vendor list for its new data center SSDs, and more recently, on November 12, the company introduced the world’s fastest SSD, with efficiency ramped up to 67% more density per rack for data centers. With this new SSD, Micron Technology, Inc. (NASDAQ:MU) has been able to set a new standard in data center efficiency and performance.
Micron Technology, Inc. (NASDAQ:MU) is shifting its complete focus to meeting the demands for artificial intelligence and data center customers, two of the fastest-growing industries at the moment. The company expects demand for AI servers to continue to increase, positioning it as a major player in AI.
9. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 107
Advanced Micro Devices, Inc. (NASDAQ:AMD) ranks ninth on our list of the best growth stocks to invest in. The semiconductor and IT company produces accelerators that are capable of managing complex AI workloads, because of high bandwidth memory and a huge memory density.
Previously in October, the company unveiled new processors to power the next generation of commercial PCs and launched high-performance computing solutions to keep up with the AI computing era. Fast forward to December 10, Advanced Micro Devices, Inc. (NASDAQ:AMD) announced the expansion of its AMD Versal adaptive system-on-chip (SoC) portfolio with the new Versal RF Series. The new series offers unmatched compute performance and precise observability.
In the third quarter of 2024, Advanced Micro Devices, Inc. (NASDAQ:AMD) generated $6.8 billion in revenue, up by 18% year-over-year and 17% sequentially. The company attributed its strong financial results to revenue growth in data center and client segments. Overall, the company is leading the AI and technology wave with its advanced accelerators and processors and expects to deliver strong results over the next few years in data center and client segments.
8. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 116
Salesforce Inc (NYSE:CRM) is a leading cloud provider and one of the best growth stocks to invest in. What started as a collaborative cloud company is now an AI powerhouse that boasts advanced technological capabilities. Salesforce, Inc. (NYSE:CRM) is committed to innovation in cloud and performance management using AI. In October, the company announced the general availability of Agentforce, a new feature on the Salesforce platform, that will help companies develop and deploy autonomous AI agents. Very recently, on December 4, the company launched several updates to its Heroku platform to enhance developer capabilities and operational performance.
During the fiscal third quarter of 2025, Salesforce Inc (NYSE:CRM) recorded revenue worth $9.44 billion, up by 8% year-over-year. The company particularly benefitted from Agentforce, its complete AI system for businesses, and its autonomous AI tools. Consequently, the company raised its FQ4 2025 revenue guidance to $9.9-$10.10 billion, representing a growth of nearly 8%. Overall, Salesforce Inc (NYSE:CRM) expects to become an AI powerhouse and is expecting a major tailwind in revenue due to AI adoption in the coming years.
7. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 128
Broadcom Inc. (NASDAQ:AVGO) designs and develops a range of semiconductor products and is well known for making application-specific integrated circuits (ASICs). The company serves the data center, networking, software, broadband, storage, and wireless markets. During the third quarter, Broadcom Inc. (NASDAQ:AVGO) generated $13.1 billion in revenue, up by 47% year over year. The growth in revenue and operating profits was driven by AI revenue, VMware bookings, and sustained non-AI semiconductor revenue. In the fiscal fourth quarter of 2024, Broadcom expects revenue from AI to grow by 10% sequentially to $3.5 billion, bringing the full-year total to $12 billion, driven by ethernet networking and custom accelerators for AI data centers.
AVGO’s CEO expects a solid opportunity from AI over the next few years, and some strategists agree. On December 14, Laffer Tengler Investments CEO and CIO, Nancy Tengler, joined Yahoo Finance to discuss her position on AVGO. She categorized AVGO as a long-term stock and emphasized that it is a “well-operated company” with solid fundamentals. She also added that the AI spending is “not over” and expects AVGO to benefit from that. Overall, Broadcom Inc.’s (NASDAQ:AVGO) cloud computing platform for enterprises promises a solid growth opportunity as it leverages artificial intelligence.
ClearBridge Investments’ ClearBridge Large Cap Value Strategy stated the following regarding Broadcom Inc. (NASDAQ:AVGO) in its Q3 2024 investor letter:
“In IT, we bought Broadcom Inc. (NASDAQ:AVGO) as we believe the company has a long runway for growth with its custom silicon business, which should be more durable and less volatile than other components within the AI food chain. We also believe the acquisition of VMware creates another opportunity for steady, subscription-based durable growth that is still in its early innings. We believe the stock has an attractive risk/reward profile given the reasonable visibility toward mid-teens EPS growth at a low-20s P/E multiple. We made room for Broadcom by exiting Lam Research, whose shares we believed priced in a full recovery, while we grew increasingly concerned that China exposure might create an air pocket.”
6. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 158
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), a chip maker for technology giants like NVIDIA and AMD, attributes its revenue growth to the increasing demand for artificial intelligence. In the third quarter of 2024, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) logged revenue worth $23.7 billion (NT$759.69 billion) and net income worth $10.13 billion (NT$325.26 billion), up by 39% and 54.2% year-over-year, respectively.
Its advanced microprocessors have fueled business for TSMC immensely, keeping the hopes up of investors, especially after ASML cut down guidance. On October 17, TECHnalysis Research president and chief analyst, Bob O’Donnell, appeared on Yahoo Finance to discuss the position of TSMC. He shared that ASML cutting its guidance has more to do with challenges in China and much less with the semiconductor industry. He added that Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) posted a solid financial performance, emphasizing that the company beat earnings and raised its guidance for 2025, suggesting that TSMC is a “much better bellwether” of AI.
Overall, TSMC expects its four-year revenue to increase by nearly 30% due to the growing demand for artificial intelligence. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) also plans to spend nearly $32 billion to $40 billion in capital expenditures in 2024 and expects revenue from AI chips to grow at a compound annual growth rate (CAGR) of 50% by 2027.
Baron Global Advantage Fund stated the following regarding Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its Q3 2024 investor letter:
“We established a small position in Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM). Morris Chang founded TSMC in 1987, as the world’s first dedicated semiconductor foundry. Until then, semiconductor chips were always designed and manufactured by the same company. TSMC introduced a groundbreaking new business model, in which it acted purely as a contract manufacturer, which proved to be highly successful. TSMC maintained a focus on improving its manufacturing process technology and enabled the emergence of innovative fabless design companies, including NVIDIA, Apple, and Qualcomm, who became TSMC’s key customers. Today, TSMC has a more than 60% share of the total semiconductor foundry market and over 90% share in leading-edge manufacturing. TSMC enjoys high barriers to entry given the ever-increasing cost and technological complexity of semiconductor manufacturing while benefiting from economies of scope as once leading-edge manufacturing becomes lagging edge on fully depreciated equipment. TSMC also benefits from scale– higher profits lead to higher R&D and capex investments, allowing for further technological differentiation, resulting in more profits. We believe TSMC will sustain strong double-digit earnings growth for years to come, driven by continued market share gains, strong pricing power, and structural growth in AI demand. According to C.C. Wei, TSMC’s CEO, “almost all the AI innovators are working with TSMC to address the insatiable AI-related demand.”6 Management forecasts that revenue from server AI chips, such as GPUs and other AI accelerators, will grow at a 50% CAGR from 2022 to 2028 and account for more than 20% of TSMC’s revenue by 2028. We except further long-term upside from the eventual proliferation of edge AI devices, including AI smartphones and AI PCs, which will require significantly more computing power and drive even stronger demand for TSMC’s leading-edge technology.”
5. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 193
NVIDIA Corporation (NASDAQ:NVDA) is a leading GPU maker driving innovation in artificial intelligence, gaming, creative design, autonomous vehicles, and robotics. In the third quarter of 2024, the company generated revenue worth $35.1 billion, up by 17% sequentially and 94% year-over-year. Most of the demand was propelled by the market’s growing AI needs in hardware especially. The company’s growing demand for its data center services and its Blackwell AI chip has ramped up expectations for the coming year.
NVIDIA Corporation (NASDAQ:NVDA) has been lagging compared to its record close last month. However, despite that analysts remain bullish on the stock, tying great expectations to its growth potential. On November 21, CFRA Research senior equity analyst, Angelo Zino, joined Yahoo Finance where he discussed his thesis on the stock. Zino shared that the stock has enormous cash flow potential, given the demand projections for its Blackwell AI chip and data center services. He also added that the stock has solid financials and will continue to exceed expectations in the coming year. Zino emphasized that investors must not read “too much” into the guidance especially because making a complex technology demands time. Overall, analysts are also bullish on NVDA and their median price target of $175 points to an upside of nearly 35%.
Ithaka Group’s Ithaka US Growth Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q2 2024 investor letter:
“NVIDIA Corporation (NASDAQ:NVDA) is the market leader in visual computing through the production of high-performance graphics processing units (GPUs). The company targets four large and growing markets: Gaming, Professional Visualization, Data Center, and Automotive. NVIDIA’s products have the potential to lead and disrupt some of the most exciting areas of computing, including: data center acceleration, artifi cial intelligence (AI), machine learning, and autonomous driving. The reason for the stock’s appreciation in the quarter was twofold: First, the stock benefi ted from tremendous excitement surrounding the further development of generative AI and the likelihood this would necessitate the purchase of a large number of Nvidia’s products far into the future; Second, Nvidia posted another strong beat[1]and-raise quarter, where the company upped its F2Q25 revenue guidance above Street estimates, showcasing its dominant position in the buildout of today’s accelerated computing infrastructure.”
4. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 202
Alphabet’s (NASDAQ:GOOGL) ranks fourth on our list of the best growth stocks to invest in. The company’s performance in Q3 2024 was driven by its growing demand for search and cloud due to artificial intelligence. Aligning with its AI strategy, Alphabet Inc. (NASDAQ:GOOGL) recently revealed that new Chromebooks would now come with built-in artificial intelligence features. On the shopping front, the company also launched a new artificial intelligence tool to help consumers pick the right products. As of Q3 2024, all products and services with more than 2 billion monthly users use Gemini models. Extending beyond its products, Alphabet Inc. (NASDAQ:GOOGL) is also working to offer Gemini more broadly to developers.
Alphabet Inc. (NASDAQ:GOOGL) is a prominent name in AI and cloud. On October 30, CFRA Research Senior Equity Analyst, Angelo Zino, joined Yahoo Finance to share his outlook on GOOGL. Zino suggested that the growing role of AI in search has been a primary challenge for the company, but emphasized that the company is navigating through it well. He also added that he is happy with how the company is adapting to the evolution and remains bullish on the stock and its future potential.
3. Meta Platforms Inc (NASDAQ:META)
Number of Hedge Fund Holders: 235
Meta Platforms Inc (NASDAQ:META) is the technology conglomerate behind Facebook, Instagram, Threads, and WhatsApp, with over 3 billion daily active users across all its platforms. META is leveraging artificial intelligence rapidly, especially for its overall social media experience. On November 20, the company introduced AI backgrounds and several other features for Messenger calling, also ensuring that its customers enjoy a more entertaining social media experience.
Some may argue that Meta Platforms Inc (NASDAQ:META) holds dominance in the social media sector, especially because it owns some crucial AI technologies. On October 29, JPM Securities managing director & equity research analyst, Andrew Boone, appeared in an interview on Yahoo Finance where he shared insights on META. Boone suggested that META has become a leader in AI implementation to enhance the overall social media user experience, highlighting it is currently the most mature, especially in terms of operational LLMs. Overall, Meta Platforms Inc (NASDAQ:META) has a solid business model with a prominent growth trajectory. The company is pioneering artificial intelligence and is expected to spend billions to support the goal.
Rowan Street Capital stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its Q2 2024 investor letter:
“We are pleased to report that Meta Platforms, Inc. (NASDAQ:META), our largest position in the fund, has delivered a remarkable performance, +450% since our November 2022 note. Our investment in Meta dates back to 2018, with an average cost basis of approximately $172 per share. Today, the stock trades around $535, reflecting a 3x return over the six-year holding period, equating to a 20% annualized return.
We would like to remind you that achieving these types of returns is never a straight path. From time to time, we might experience volatility — that’s simply part of the investment journey. In fact, wealth creation and volatility go hand in hand. There’s no escaping it; it’s the “price of admission” the market demands. If you take a look at the chart below, you’ll notice the drawdowns META stock has faced over the years, with 2022 standing out as a particularly challenging period, where the stock saw a 75% drop….. ” (Click here to read the full text)
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Recently, Microsoft Corporation (NASDAQ:MSFT) partnered with Accenture and Avanade to help businesses transform their functions using artificial intelligence and Microsoft Copilot. In addition to that, the company also launched new and improved adapted AI models for various industries, addressing the particular AI needs of organizations.
Speaking of MSFT’s position on AI, on November 19, the company reported on the global impact of its artificial intelligence applications. According to the report, more than 85% of the companies in the Fortune 500 are now using Microsoft AI and almost 70% are using Microsoft 365 Copilot. Overall, the company saw widespread adoption of its AI tools and products by prominent names across the globe. These partnerships and advancements helped Microsoft Corporation (NASDAQ:MSFT) report solid financial results, giving it a strong head start to the fiscal year 2025.
Microsoft Corporation (NASDAQ:MSFT) is showing solid performance in the AI domain. On October 31, RBC Capital Markets software equity analyst, Rishi Jaluria, appeared on Yahoo Finance to discuss the competitive position of MSFT in the AI sector. Jularia suggested that while the overall business is accelerating, Azure AI has been performing exceptionally, which in his opinion is very encouraging. He also added that despite the hefty capital expenditure, MSFT is in an “enviable” competitive position.
Baron Opportunity Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q3 2024 investor letter:
“Microsoft Corporation (NASDAQ:MSFT) is the world’s largest software and cloud computing company. Microsoft was traditionally known for its Windows and Office products, but over the last five years it has built a $147 billion run-rate cloud business, including its Azure cloud infrastructure service and its Office 365 and Dynamics 365 cloud-delivered applications. Shares gave back some gains from strong performance over the first half of this year. For the fourth quarter of fiscal year 2024, Microsoft reported a strong quarter with total revenue growing 16%, in line with the Street; Microsoft Cloud up 22%; Azure up 30%; 43% operating income margins; and 36% free cash flow margins. Core Azure growth came in one point shy of expectations, however, due to a soft European market and continued constraints on AI compute capacity. In the same vein, while Microsoft reiterated its fiscal 2025 targets of double-digit top-line and operating income growth, quarterly guidance called for Azure growth to slow a bit before accelerating in the back half of the fiscal year, as capital expenditures increase, yielding an expansion of AI compute capacity. We believe this investment is a leading indicator for growth, with more than half of the spend related to durable land and data center build outs, which should monetize over the next 15-plus years. We remain confident that Microsoft is one of the best-positioned companies across the overlapping software, cloud computing, and AI landscapes, and we remain investors.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 286
Amazon.com, Inc. (NASDAQ:AMZN) ranks first on our list of the best growth stocks to invest in right now. In addition to its growing customer base in e-commerce and cloud, the company also has a strong cash flow situation. For the trailing 12 months ended September 30, Amazon.com, Inc. (NASDAQ:AMZN) generated $112.7 billion in operating cash flow, up by 57% from the trailing 12 months ended September 30, 2023. During the same period, the company increased its free cash flow to $47.7 billion, up from $21.4 billion in 2023.
For the fourth quarter of 2024, Amazon.com, Inc. (NASDAQ:AMZN) expects net sales to range between $181.5 billion and $188.5 billion, up by 7-11% year-over-year. Operating income, on the other hand, is expected to range between $16 billion and $20 billion, up from $13.2 billion during the fourth quarter of 2023. Overall, AMZN is seeing significant growth in AWS sales and its international segment, with sustained growth in its North America segment.
Amazon.com’s (NASDAQ:AMZN) performance explains why analysts are bullish on the stock. On December 14, Wedbush Securities managing director of equity research Scott Devitt joined Yahoo Finance to discuss his thesis on AMZN heading into 2025. He suggested that all three businesses led by AMZN are expected to perform extremely well in 2025, for the first time since the pandemic. He added that the stock surged throughout 2024, and the momentum is expected to carry forward into 2025. Devitt also emphasized that previous slowdowns in retail were due to the macroeconomic conditions of the country, and with a solid economic recovery expected, AMZN’s retail aspect is also going to benefit.
Diamond Hill Select Strategy stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q2 2024 investor letter:
“Among our top individual contributors in Q2 were Amazon.com, Inc. (NASDAQ:AMZN), Texas Instruments and Mr. Cooper Group. Internet retail and cloud infrastructure company Amazon is benefiting from strong profitability, particularly in its Amazon Web Services (AWS) business. Shares also received a boost amid growing optimism around the demand for AWS as Amazon customers’ investments in generative AI projects continue growing.”
While we acknowledge the potential of AMZN to grow, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AMZN but 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.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
