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.
8. CrowdStrike Holdings, Inc. (NASDAQ:CRWD)
Number of Hedge Fund Holders: 74
5-Year Revenue Growth: 55.62%
CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is an American cybersecurity technology company that came into being in 2011 to reinvent security for the cloud era. The firm created the CrowdStrike Falcon platform to detect threats and stop breaches and also built the first multi-tenant, cloud-native, intelligent security solution capable of protecting workloads across on-premise, virtualized, and cloud-based environments running on various endpoints.
CrowdStrike recently positioned itself as the fastest and only pure-play cybersecurity software company to reach a major milestone as it crossed $4 billion in ending ARR (Annual Recurring Revenue) in the third quarter of fiscal year 2025. Simultaneously, the company surpassed the $1 billion quarterly total revenue milestone, recording a 29% rise year-over-year.
In July 2024, CrowdStrike Holdings, Inc. (NASDAQ:CRWD) faced a major setback when a single content update from it resulted in over 8.5 million systems crashing while disrupting operations for organizations globally, including many Fortune 1000 companies. From what was referred to as the largest IT outage in history, CrowdStrike seems to have bounced back and has more than recovered the $30 billion in market value the firm shed after the outage. The firm’s chief executive George Kurtz told the Financial Times that CrowdStrike had bounced back by turning the crisis into “a competitive advantage”, reiterating that customer trust was not lost. Analysts attributed the firm’s recovery to its handling of the outage.
7. ServiceNow, Inc. (NYSE:NOW)
Number of Hedge Fund Holders: 78
5-Year Revenue Growth: 26.55%
ServiceNow, Inc. (NYSE:NOW) is an American software company based in California. The company runs the Now platform, a cloud-based solution with embedded artificial intelligence and machine learning capabilities that help global enterprises across industries, universities, and governments unify and digitize their workflows. Thus, the Now platform drives business outcomes such as streamlining processes, unlocking productivity, and improving experiences for both employees and customers.
ServiceNow, Inc. (NYSE:NOW) has been an integral part of the IT world for two decades. The company’s over 8,100 global customers include approximately 85% of the Fortune 500, relying on ServiceNow solutions using the intelligent and intuitive cloud platform to drive successful business transformation, the Now Platform.
ServiceNow has been seeing solid momentum coming from both existing and new customers doubling down on their investments in the firm as the AI platform for business transformation. The most recent quarter went robust driven by a strong demand for the Now Platform and exceptional team execution. Total revenues represented a 22% year‑over‑year growth. ServiceNow’s largest AI release to date, the Now Platform Xanadu release, is set to drive the firm’s durable topline growth and margin expansion.
6. PDD Holdings Inc. (NASDAQ:PDD)
Number of Hedge Fund Holders: 78
5-Year Revenue Growth: 71.61%
PDD Holdings Inc. (NASDAQ:PDD) is a multinational commerce group owning and operating a portfolio of businesses including Pinduoduo and Temu. While Temu is an online marketplace, Pinduoduo is an e-commerce platform offering products related to agricultural produce, apparel, shoes, bags, food and beverage, electronic appliances, and others. The firm was founded by Colin Huang in 2015.
PDD has emerged as one of the major e-commerce players in China. As stated by the investment management company, Baron Funds, PDD’s competitive moat lies in its team purchase model that facilitates bulk buying through direct partnerships with manufacturers, thereby eliminating intermediaries and lowering costs. With more demand for affordable products in China alongside small-scale merchants finding alternatives to Alibaba, PDD has driven growth. Even Americans looking for bargains have been heading to Temu, which according to Earnest Analytics, had nearly 17% of the US online discount store market as of last November.
For the third quarter, PDD Holdings Inc. (NASDAQ:PDD) recorded total revenues of RMB99,354.4 million, increasing 44% from RMB68,840.4 million in the same quarter of 2023. Regardless of intense competition and external challenges, the topline growth was good. With the plans to create a healthy and sustainable ecosystem, the firm has been investing in its platform ecosystem through merchant support policies and trust and safety updates. The CEO remains positive about this consistent investment which will be driving impactful results in the long term.
5. Apollo Global Management, Inc. (NYSE:APO)
Number of Hedge Fund Holders: 82
5-Year Revenue Growth: 77.12%
Apollo Global Management, Inc. (NYSE:APO) is an American asset management firm that has created a notable record of success in alternative investments since its founding in 1990. In its asset management business, the firm provides its clients excess return at every point along the risk-reward spectrum from investment grade credit to private equity. Simultaneously, the firm’s retirement services business Athene provides a suite of retirement savings products.
Apollo Global Management, Inc. (NYSE:APO) serves as a high-growth, global alternative asset manager with approximately $733 billion of assets under management, as of September 30, 2024. The company is building a next-generation financial services business positioned uniquely to win across massive market opportunities relating to the global industrial renaissance, the growing need for retirement products, and individual investors.
Apollo has been a robust, sustainable business with growth momentum through 2024. The firm recorded strong third-quarter financial results, posting record quarterly FRE (Fee Related Earnings) of $531 million and the second-highest quarter of SRE (Spread Related Earnings) amounting to $856 million. The two earnings streams totaled $1.4 billion in the quarter. At the same time, total assets under management of $733 billion benefited from inflows of $42 billion in the quarter.
4. MercadoLibre, Inc. (NASDAQ:MELI)
Number of Hedge Fund Holders: 87
5-Year Revenue Growth: 55.26%
MercadoLibre, Inc. (NASDAQ:MELI) is a leading fintech and e-commerce company in Latin America. The company has been democratizing commerce and financial services for 25 years. It has a presence in 18 countries including Argentina, Brazil, Mexico, Colombia, Chile, and Peru.
MercadoLibre, Inc. (NASDAQ:MELI) is a dominant player in key industries in Latin America. The company serves as one of the leading fintechs in the region with its ecosystem as its competitive advantage. With financial services ripe for disruption in the firm’s markets, it successfully operates a fintech business that matches the lowest cost-to-serve in the region.
Overall, Mercado has a diversified mix of revenue with ample opportunities for growth and monetization. Other than fintech, it operates as the largest online commerce ecosystem in Latin America, based on unique visitors and processed orders. By targeting a region with a population of more than 650 million people and with one of the rapidly growing Internet penetration and e-commerce growth rates in the world, the business is poised to grow.
3. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 99
5-Year Revenue Growth: 31.81%
Tesla, Inc. (NASDAQ:TSLA) designs, develops, manufactures, sells, and leases high-performance fully electric vehicles and energy generation and storage systems while offering services related to its products. Tesla operates through two reportable segments including automotive and energy generation and storage.
The solid mission to accelerate the world’s transition to sustainable energy complimented by its engineering expertise, vertically integrated business model, and focus on user experience differentiates Tesla from other companies. The electric car maker came out to be one of the biggest beneficiaries of Trump’s victory with Elon Musk being pro-Trump as its shares climbed to a record during the stock rally following Trump’s win while the company hit the massive $1 trillion market cap.
However, Tesla ended up starting 2025 on a low note since investors were not impressed with the company posting a big fourth-quarter delivery miss. The company also missed analyst estimates for 2024 while witnessing the first year-over-year delivery decline. According to Morgan Stanely, the Q4 deliveries missed consensus by about 3%, stating
“The miss reflects a relatively aged product and increased availability of lower priced competition globally ahead of the hyped introduction of the cheaper new model (Juniper) in early/mid-2025”
2. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 107
5-Year Revenue Growth: 32.17%
Advanced Micro Devices, Inc. (NASDAQ:AMD) serves as the high-performance and adaptive computing leader that came into being as a Silicon Valley startup in 1969. The firm operates through multiple segments including Data Center, Client, Gaming, and Embedded. AMD’s mission revolves around building products that accelerate next-generation computing experiences.
Advanced Micro Devices, Inc. (NASDAQ:AMD) has been a major player in the semiconductor landscape. However, it has underperformed peers in the chips sector and has declined by 18% in the past year. Although its growth opportunities as a top AI chip maker are defended, it is major AI stocks such as Credo, Nvidia, and Broadcom have more than doubled in value while stocks with less exposure to AI and more exposure to traditional PCs and servers have suffered. Another concerning aspect is that AMD’s Gaming and Embedded segments remain in a slump with their revenues declining 69% and 25% year over year, respectively, in the most recent quarter although the company is witnessing significant growth in its Data Center and Client segments.
While Bank of America analyst Vivek Arya believes that AMD’s pipeline lacks Nvidia’s by more than a year deeming the company a distant second to NVDA in the race for AI-powering chips and processors. With rising competitive pressures set to weigh down AMD more heading into 2025, Goldman Sachs analyst Toshiya Hari downgraded the stock to ‘neutral’ from ‘buy’ and lowered the price target from $175 to $129, while noting:
“Although we remain constructive on AMD’s ability to take share from Intel in x86-based compute across PCs and traditional servers, we are increasingly concerned [over] the rise of Arm-based custom CPUs and heightened competition in accelerated computing”
1. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 193
5-Year Revenue Growth: 62.43%
NVIDIA Corporation (NASDAQ:NVDA) specializes in products and platforms for the gaming, professional visualization, data center, and automotive markets. The chip maker is a pioneer of GPU-accelerated computing and is well known for its GPU technology. As of 2024’s third quarter, the firm had 90% of the global GPU market share.
Based on the rising interest in AI and a strong demand for its AI-centric chips across various industries, NVIDIA ended up being the largest global gainer in market capitalization for 2024. Among the most valuable global stocks, the chip maker witnessed its market value increasing by more than $2 trillion last year and hitting $3.28 trillion at the close of 2024. Amid the booming demand for AI chips, NVDA beat Wall Street’s expectations in its recent quarter.
Recently, a risk started hovering over NVDA’s sales of GPUs for data centers which account for a major portion of its revenue. The company’s shares fell nearly 2% as the Biden administration released stricter rules on AI chip exports, capping the number of AI chips called GPUs that can be ordered by most countries without a special license. Nvidia vice president of government affairs Ned Finkle referred to the rule as being “drafted in secret and without proper legislative review”. Previously, Bank of America analyst Vivek Arya reiterated his Buy rating on NVDA shares while mentioning the stricter rule muddying the water for the company.
While we acknowledge the potential of NVDA as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stock To Buy Now and 30 Most Important AI Stocks According to BlackRock.
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