In this article, we will take a look at the 10 best revenue growth stocks to buy according to hedge funds.
Outlook for the Year 2025: A Positive Year for Equities?
Citigroup has forecasted 2025 to be a positive and strong year for global stocks. Citi expects a rally in global equities to extend into the year 2025 and estimates a 10% EPS growth for global equities which is slightly below analysts’ consensus of 13%.
The stance was that declining interest rates and easing inflation could help boost corporate earnings. The major world stock benchmark, MSCI All Country World Index Local, is expected to reach 1,140 points by the end of this year which signals a 10% increase from its previous close of 1,035.46. Citi added that the United States and emerging market regions could witness the most robust earnings per share growth of about 15%.
Citi remains ‘overweight’ on U.S. equities but believes that the new Trump administration brings a lot of uncertainty with potential tariffs, tax cuts, and deregulation resulting in a ‘complicated mix of favorable and adverse economic effects’. In 2024, the S&P 500 index rallied 24%, driven by the expected Fed rate cuts, optimism relating to Artificial Intelligence, and the potential deregulation under the new US President-elect. Regarding the effect of these drivers on 2025, Citigroup analysts stated:
“While AI is no longer expected to provide as much EPS growth advantage vs. the rest of the index, any continuation of USD strength and policy uncertainty on tariffs could extend its outperformance”
With that being said, let’s move to the 10 best revenue growth stocks to buy according to hedge funds.
Our Methodology:
In order to compile a list of the 10 best revenue growth stocks to buy according to hedge funds, we first used a stock screener to screen stocks that have more than $2 billion market cap and at least 25% revenue growth over the past 5 years. Moving on, we shortlisted the top 10 stocks from our list which had the highest revenue growth and were the most popular among hedge funds. The 10 best revenue growth stocks to buy according to hedge funds have been arranged in ascending order of their hedge fund sentiment, as of Q3.
At Insider Monkey we are obsessed with 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. Shopify Inc. (NYSE:SHOP)
Number of Hedge Fund Holders: 56
5-Year Revenue Growth: 42.11%
Shopify Inc. (NYSE:SHOP) is a leading commerce technology company that offers essential internet infrastructure for commerce. SHOP powers millions of businesses in more than 175 countries globally through an all-in-one commerce platform to start, run, and grow a business.
With its unified commerce platform becoming the go-to choice for merchants of all sizes, the firm continues to position itself as a leader in powering commerce anywhere, anytime. The opportunity stands large and growing for the firm in a massive global market with accelerated e-commerce penetration. The firm is creating and expanding its total addressable market through more products, more geographies, and more merchant sizes.
Shopify Inc. (NYSE:SHOP) demonstrates the durability of its business in its financials. The company most recently closed its sixth consecutive quarter of over 25% revenue growth excluding logistics by posting a 26% revenue growth. Through the year 2024, it boosted its free cash flow margin sequentially each quarter. Since the firm has grown its Gross Merchandise Volume over the preceding 5 years, the story comes down to the fact that when merchants grow their sales, they tend to reinvest in their business eventually making Shopify more successful.
9. KKR & Co. Inc. (NYSE:KKR)
Number of Hedge Fund Holders: 66
5-Year Revenue Growth: 42.50%
KKR & Co. Inc. (NYSE:KKR) is a leading global investment firm investing across private markets in every asset class worldwide. The firm offers alternative asset management, capital markets, and insurance solutions. KKR was founded in 1976 by George Roberts, Henry Kravis, and Jerome Kohlberg. The firm operates through segments including Asset Management, Insurance, and Strategic Holdings.
KKR is positioned in a growing alternative asset management industry. While Asia Pacific is the driver of global growth and boasts a significant runway for alternatives, KKR is the leading franchise in the region in addition to being the leading franchise in Japan, one of the largest global economies as well as one of the largest life and annuity markets globally. Other growth drivers include the global need for infrastructure and individuals managing their retirement wealth.
With a purpose-built business model with three growth engines, Asset Management, Insurance, and Strategic Holdings, the firm set itself to drive recurring earnings. KKR recorded a strong third quarter of 2024, highlighted by an over 50% year-over-year growth in adjusted net income as well as Total Operating Earnings (TOE-the sum of Fee Related Earnings, Insurance Operating Earnings and Strategic Holdings Operating Earnings) up, 71% year-over-year. Although most of the rise in TOE over the last 12 months was due to the growth in Fee Related Earnings, the firm expects Strategic Holdings Operating Earnings to contribute more to TOE over time.
