In this article, we will take a look at the 1o best stocks to buy for long term growth.
Strategist Expects S&P 500 to reach 6,600
Some investors consider 2024 as a transition year, while others debate that this year was just the beginning of the level of volatility awaiting financial markets in 2025. It is not an exaggeration to say that 2024 has been rough for markets given that crucial events like the commencement of an easing cycle followed by the US elections remained a major influence on the overall environment. Amid all these awaited events, the tech sector has not been an investor favorite, however, that may change sooner than we think.
On November 26, Venu Krishna, head of US equity strategy at Barclays, joined Yahoo Finance to share his opinion on the stock market, particularly the tech sector. Krishna raised his S&P 500 price target for 2025 to 6,600 and shed light on why he believes such is possible.
He shared that the economy is pretty constructive from a macro perspective given that the virtuous cycle between income and employment remains solid. He added that consumer balances are going up and believes that the overall economic conditions of the country have been positive. All these reasons combined explain the price target of 6,600 for the S&P 500.
Speaking of the technology sector, Krishna agreed that the “market is, on a consistent basis, underestimating the earnings power of tech, especially big tech.” He added that at the same time, the market is also overestimating the earnings power of the other non-tech names in the S&P 500. He shared that the market expected Big Tech to post earnings up by 19% year-over-year and have “flat revisions” in the third quarter. Non-tech stocks on the other hand were marked down by 2%.
However, Krishna revealed that as the earnings period of Q3 2024 comes to a close, Big Tech actually delivered 31% of earnings growth during the quarter. He added that non-tech stocks have moved in the same direction but only incrementally. He explained that, for example, non-tech stocks were originally marked down, but instead, they expanded by 2%, accelerating at a very slow pace.
He also emphasized that the rate at which the market expects Big Tech earnings to slow down is in reality much lower than the actual deceleration rate. Overall, Krishna expects the market to converge but highlighted that it may not be as close as we expect it to be, probably not sooner than Q1 2026.
While turmoil and uncertainty remain a key element in the market, some stocks are revolutionary enough that they are bound to offer great opportunities in the coming years, if not now. That said, let’s take a look at the 10 best stocks to buy for long term growth.
Our Methodology
To come up with the best stocks to buy for long term growth we sifted through multiple rankings on the internet. We then examined the hedge fund sentiment of each stock and ranked them in ascending order of the hedge fund sentiment 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 Stocks to Buy For Long Term Growth
10. Alibaba Group Holding Limited (NYSE:BABA)
Number of Hedge Fund Holders: 115
Alibaba Group (NYSE:BABA) is a technology and internet retail company that operates e-commerce sites that serve both consumers and small business owners. In addition to e-commerce, Alibaba Group (NYSE:BABA) is also involved in cloud computing, logistics, digital media, and entertainment.
Alibaba Group (NYSE:BABA) is among the best stocks for long term growth and we say that because its e-commerce platforms are used by more than 800 million people worldwide. In addition to that, The company’s leading e-commerce platform, Alibaba.com, has over 150 million users and is present in 190 countries. Overall, it has a 40% share in the Chinese e-commerce market, as per estimates by the DBS Bank in Hong Kong.
AliExpress, its leading consumer retail site, is known for fast deliveries and unmatched customer experiences. It allows shoppers to source products directly from factories, shrinking the supply chain and making shopping more convenient. In addition to that, the company entered significant partnerships during the second quarter of 2024 to improve logistics and payment structures. Analysts are also bullish on the stock, and their median price target of $119.8 points to a 37% upside from current levels.
Oakmark International Fund stated the following regarding Alibaba Group Holding Limited (NYSE:BABA) in its Q3 2024 investor letter:
“Alibaba Group Holding Limited (NYSE:BABA) was the top contributor during the quarter. The China-headquartered consumer discretionary company’s stock price rallied following the announcement of a multipronged stimulus package by the Chinese government. Despite the stock’s strong performance for the quarter, we continue to believe there is upside in the name and that the market is not fully pricing in the turnaround potential for the e-commerce business or other optionality the company possesses.”
9. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 116
Salesforce Inc (NYSE:CRM) is a leading cloud provider and one of the best stocks to buy for long term growth. The company has one of the world’s most trusted customer relationship management platforms. 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. Previously the launch of AsyncAPI in MuleSoft aimed to facilitate the widespread adoption of event-driven infrastructures, allowing businesses to respond to real-time events faster. Fast forward to October 29, Salesforce Inc (NYSE:CRM) announced the general availability of Agentforce, a new feature on the Salesforce platform, that will help companies develop and deploy autonomous AI agents.
The company’s strategy to become an AI enterprise is driven by forging partnerships and new product launches. During Q2 2024, Salesforce Inc (NYSE:CRM) posted new bookings for its AI products, which more than doubled sequentially, and signed 1,500 AI deals during the same period. On November 27, the company and AWS expanded their existing partnership by empowering customers to focus on technology and the full potential of AI.
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. Analysts are also bullish on the stock and their median price target of $345 implies an upside of 4%.
8. 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). It also provides infrastructure software products. Some of its products include cable modems, networking processors, and storage adapters. The company serves the data center, networking, software, broadband, storage, and wireless markets.
2024 has been incredible for AVGO. Earlier this year, the company launched breakthrough technologies able to manage AI tasks and scalable AI systems. On November 5th, the company unveiled VeloRAIN, a platform that uses artificial intelligence and machine learning to improve the performance of AI security workloads. On the same day, the company launched a private cloud platform under its VMware Cloud Foundation to improve customers’ AI autonomy and security.
The company also forged prominent partnerships throughout the year. To align with its strategic trajectory, on November 5, the company expanded its partnership with Telia to revolutionize Telco and Cloud infrastructure. Overall, Broadcom Inc. (NASDAQ:AVGO) 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 in Q4 2024.
Broadcom Inc.’s (NASDAQ:AVGO) emphasis on introducing groundbreaking technologies is immense and is also its economic moat. At the moment, company officials believe AVGO is finally achieving stability on a company-wide level and is on track to becoming a technology powerhouse.
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.”
7. Uber Technologies, Inc. (NYSE:UBER)
Number of Hedge Fund Holders: 136
Ride-hailing company Uber Technologies, Inc. (NYSE:UBER) is working to improve the overall customer experience. During the quarter, the company launched all-electric Uber Green, an EV-only ride option in 40 cities globally with an EV preference feature in other markets. Other than that, the company recently introduced new features to make holiday customers happy with the service. UberXXL, a new feature, was launched by Uber on November 20 to facilitate incoming holiday travelers on Thanksgiving by offering extra trunk space and rides to and from nearly 60 airports across the globe.
The company is not just trying to satisfy customers. For drivers, Uber (NYSE:UBER) introduced an AI assistant that helps answer EV-related questions supported by an EV mentorship program. More recently, on October 3, Uber (NYSE:UBER) formed a partnership with ENSO, The Earthshot Prize Finalist, to launch a range of low-emission electric vehicle tires across the United Kingdom and the United States.
Uber Technologies, Inc. (NYSE:UBER) is making strides in electric and autonomous vehicles, while also maintaining its position as a leading ride-hailing cab service. Analysts are also bullish on the stock, and their 1-year median price target of $90 points to a 25% upside from current levels.
6. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 158
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is one of the best stocks to buy for long term growth. The semiconductor company makes chips for technology giants like NVIDIA, Apple, and AMD.
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, driven by the increasing demand for artificial intelligence.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is expanding its presence across the world. The company recently formed a joint venture with major partners in Germany and expanded its partnership with Amkor to facilitate advanced packaging in Arizona, fueling the semiconductor ecosystem in the region.
To emphasize TSM’s position in the market, on July 18, Matt Bryson, SVP of equity research at Wedbush Securities joined Yahoo Finance. Bryson discussed the overall market and shared that TSM is not going anywhere despite geopolitical tensions. He added that “there’s no alternative to Taiwan Semi.” Overall, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) plans to spend $32 billion to $40 billion in capital expenditures in 2024 and expects revenue from AI chips to increase 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) ranks fifth on our list of the best stocks to buy for long term growth. NVIDIA is a leading GPU maker driving innovation in artificial intelligence, gaming, creative design, autonomous vehicles, and robotics. The company is also an AI powerhouse and is commonly referred to as the AI Star.
There is no doubt about NVIDIA’s position in the technology and AI sector. As part of its recent updates, on October 29, the company revealed Enterprise Reference Architectures that will help the company’s partners and customers build AI factories. More recently, on November 6, NVIDIA Corporation (NASDAQ:NVDA) partnered with Hugging Face to fuel open-source AI robotics research and development. Aligning with the trend, on November 27, the company launched AI agents in RTX AI to help solve complex problems, an incredible feat in making the technology more accessible.
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 growing AI needs of the market. In addition to that, the demand for Hopper and the much-awaited Blackwell is immense, contributing to NVDA’s influence over the market.
Overall, NVIDIA Corporation (NASDAQ:NVDA) is on our list because of its resources and expertise in scalable AI hardware and software solutions. At the end of Q3 2024, 193 hedge funds were bullish on the stock, according to Insider Monkey’s database.
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 Inc. (NASDAQ:GOOGL) is one of the biggest technology companies in the world that ranks fourth on our list. The company owns a range of products, including Google Search, Google Maps, YouTube, Google Cloud, and Waymo. Alphabet’s (NASDAQ:GOOGL) performance in Q3 2024 was predominantly driven by its growing demand for search and cloud due to artificial intelligence. The company generated almost $88.3 billion in revenue, of which cloud revenue reached $11.4 billion, up by 35%. Alphabet (NASDAQ:GOOGL) also launched several AI breakthroughs recently.
The company improved the performance of AI in search by expanding the type of questions people can ask. In addition to that, the company revealed that new Chromebooks would now come with built-in artificial intelligence features. On the shopping front, Alphabet Inc. (NASDAQ:GOOGL) launched a new artificial intelligence tool to help consumers pick the right products supported by generous product details.
Alphabet Inc. (NASDAQ:GOOGL) is a prominent name in AI and cloud. Analysts are also bullish on the stock and their median price target represents an upside of 24% from current levels.
3. Meta Platforms Inc (NASDAQ:META)
Number of Hedge Fund Holders: 235
Meta Platforms Inc (NASDAQ:META) is a technology conglomerate behind Facebook, Instagram, Threads, and WhatsApp. The company has a large user base of over 3 billion daily active users across all its platforms. Over the past few months, the company has leveraged its expertise in AI and augmented reality, having launched its debut AR glasses, Orion, in September. On the same day, the company released its most affordable mixed-reality headset, Meta Quest 36. Meta Platforms Inc (NASDAQ:META) is also working relentlessly to become one of the best recommendation technology companies backed by AI.
The company is not just improving the life of the mass consumer. In fact, the company aims to solve mission-critical tasks at a state level. On November 4, Meta Platforms Inc (NASDAQ:META) announced that it is making Llama available to government agencies in the United States dedicated to national security applications. The company believes that the use of open-source AI would help the sector improve efficacy. Llama is already in use and functional by some of the biggest technology companies in the world, positioning it as Meta’s breakthrough technology that sets it apart.
Meta Platforms Inc (NASDAQ:META) has a solid business model with a prominent growth trajectory. The company is pioneering ad tech using artificial intelligence, which is challenging for any other company to replicate.
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
Microsoft Corporation (NASDAQ:MSFT) is a technology giant that is spending generously on artificial intelligence. As the company ventures into new technologies and AI, it does represent a breakthrough stock that could promise long term growth. Microsoft Corporation (NASDAQ:MSFT) is known for making impactful technologies. In this month alone, the company has introduced several key partnerships and products. On November 14, Microsoft Corporation (NASDAQ:MSFT) partnered with Accenture and Avanade to help businesses transform their functions using artificial intelligence and Microsoft Copilot.
On November 13, the company launched new and improved adapted AI models expanding its position in various industries. The new models will help organizations address their particular AI needs with greater efficacy and will readily be available through the Azure AI model catalog. More recently, on November 19, Microsoft Corporation (NASDAQ:MSFT) announced that is it building three trusted platforms aimed at maximizing the benefits AI could reap for overall business functionality and efficiency.
Microsoft Corporation (NASDAQ:MSFT) is a company with solid fundamentals. This coupled with its investments in AI and data position it as a prominent investment opportunity, especially in the coming years.
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 stocks to buy for long term growth. The technology company is an e-commerce giant and an emerging leader in cloud computing services.
The company has been actively involved in the development of AI hardware and software recently. In addition to that, the company has formed crucial partnerships with the government and AI startups. On November 22, Amazon.com, Inc. (NASDAQ:AMZN) announced that it was investing another $4 billion in Anthropic, OpenAIs biggest rival, bringing the total investment by AMZN to $8 billion. AWS will also function as the primary training partner to Anthropic.
On the product development front, on November 4, Amazon.com, Inc. (NASDAQ:AMZN) announced the general availability of the company’s latest and most intelligent models in the Claude family in Amazon Bedrock, a fully managed service allowing people to build AI applications with complete autonomy.
Amazon.com, Inc. (NASDAQ:AMZN) has significant growth potential and to achieve such the company is working tirelessly. Over the next few years, the company is poised to become a fully functional AI company.
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.
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