In this article, we will discuss the 10 Hot Growth Stocks to Invest in According to Analysts.
The big rally in the broader stock market might have ceased, but there are a lot of things to focus on under the surface, says Morningstar. Notably, technology stocks, which were the leading contributors to the big bull market in 2023 and 2024, have seen strong declines in 2025. Elsewhere, other sectors including financial services, basic materials, and healthcare continue to see new investor interest.
Morningstar, while highlighting the comment from Michael Arone (chief investment strategist at State Street Global Advisors), mentioned that non-US markets including China, the UK, and Germany have seen strong rallies. Notably, the market strategists continue to see a subtle transition in leadership. The broader markets have been struggling to find focus due to the uncertainties related to the future. The US Fed rate cuts are not guaranteed this year, while inflation remains sticky. Also, the potential impact of Trump’s economic policy proposals is unknown yet.
Is a Market Rotation on the Horizon?
To provide a brief perspective, when a rotation occurs, the market investors tend to shift their focus from stocks that were critical to a strong trend to other parts of the broader equity market that have not seen much movement. Morningstar believes that there is plenty of evidence that a rotation is underway. Technology stocks, which have seen an increase of over 36% in 2024, are down in 2025. The NASDAQ-100 Technology Sector has seen a decline of ~0.74% on a YTD basis.
The basic materials sector was the worst performing sector in 2024. However, so far in 2025, related stocks have managed to deliver decent gains. Dow Jones U.S. Basic Materials Index increased by over ~6% on the YTD basis. Also, healthcare stocks have grabbed investors’ attention after they returned ~2.7% in 2024, says Morningstar. Dow Jones U.S. Health Care Index returned over 7% on a YTD basis. As per Dan Kemp, Morningstar chief research and investment officer, there seems to be a rotation in terms of valuations.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
UBS Remains Optimistic About S&P 500 in 2025 Despite Challenges
UBS has reiterated the importance of portfolio diversification and hedging in a bid to navigate the market volatility moving forward. Investors are required to consider capital preservation strategies so that they can limit the portfolio losses. Investors looking to build up long-term AI exposure can use structured strategies or “buy the dip” strategy in certain quality AI stocks.
UBS expects 2025 capex from the Big 4 US tech firms to increase by 35% to reach US$302 billion, with the firm seeing strong demand for frontier models. Due to the AI adoption trends fueling monetization, it projects mid-teens returns for global AI stocks this year.
Amidst such trends, let us now have a look at the 10 Hot Growth Stocks to Invest in According to Analysts.
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Our Methodology
To list the 10 Hot Growth Stocks to Invest in According to Analysts, we used a screener to shortlist stocks that have gained at least 30% over the past 6 months and that analysts see at least 20% upside to over the next 12 months. Next, we ranked the stocks in ascending order of their average upside potential, as of March 5. We also mentioned the hedge fund sentiments around each stock, as of Q4 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10 Hot Growth Stocks to Invest in According to Analysts
10. Shopify Inc. (NYSE:SHOP)
% Gain Over 6-Month Period: ~58.9%
Average Upside Potential: ~26%
Number of Hedge Fund Holders: 64
Shopify Inc. (NYSE:SHOP) is a commerce technology company which is engaged in providing tools to start, scale, market, and run a business of various sizes. The company’s expansion into enterprise and international markets offers a significant growth opportunity. The enterprise segment provides the potential for larger deal sizes and stable recurring revenue. With Shopify Inc. (NYSE:SHOP) continuing to sign new enterprise customers and expanding its offerings for larger businesses, it can see strong growth in GMV and revenue. Furthermore, international expansion, mainly in regions such as Europe, can support the company to tap into new markets and diversify revenue streams.
Shopify Inc. (NYSE:SHOP) expects the strong merchant momentum from Q4 2024 to carry over into Q1 2025, recognizing that Q1 is consistently the company’s lowest GMV quarter seasonally. For Q1 2025, the company expects revenue to grow at a mid-twenties percentage rate on a YoY basis and gross profit dollars to increase at a low-twenties percentage rate YoY. Benchmark analysts maintained a “Buy” rating on the company’s stock, reiterating a price objective of $150. The analysts highlighted the healthy cohort momentum, which indicates the performance and growth patterns in different groups of customers who started using Shopify Inc. (NYSE:SHOP)’s services at various times.
This momentum reflects that the company’s existing users continue to grow their businesses on the platform, resulting in the overall growth. Polen Capital, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“Shopify Inc. (NYSE:SHOP), a new addition to the portfolio in the second quarter, represented the top contributor to relative performance in the fourth quarter. The company is firing on all cylinders and the stock responded, up 21% on the back of its latest set of strong results. Gross Merchandise Value (GMV) growth accelerated despite a tough YoY comparison, +24%. The company is experiencing strength across its Shopify Plus enterprise business, offline point of sale (“POS”) segment, and international and “B2B” segments. With several powerful tailwinds at their back (eCommerce, mobile commerce, social media, digital payments, seamless omnichannel, DTC, cloud software digitization) and a highly scalable business model, we think Shopify is exceptionally well-positioned for where the world is heading, with growth likely stronger for longer than investors expect.”
9. Snowflake Inc. (NYSE:SNOW)
% Gain Over 6-Month Period: ~43.9%
Average Upside Potential: ~37.6%
Number of Hedge Fund Holders: 85
Snowflake Inc. (NYSE:SNOW) offers a cloud-based data platform for various organizations. Derrick Wood from TD Cowen reiterated a “Buy” rating on the company’s stock with a price objective of $210.00. The analyst’s rating is backed by factors highlighting the company’s healthy performance and strong prospects. After Snowflake Inc. (NYSE:SNOW)’s Q4 2024 results, TD Cowen sees a stabilization in core consumption growth, with favourable impacts from Iceberg and growth traction in Data Engineering and AI/ML, and the company’s management expects this to continue.
Overall, the adoption of new products, like Snowpark and Iceberg, continues to contribute to revenue growth, and Snowflake Inc. (NYSE:SNOW) has been seeing strong consumption rates among large customers. Such factors are supporting the analyst’s Buy rating. The company’s focus on AI integration and new product development can act as catalysts for strong growth. With AI workloads coming online and gaining traction, they can fuel higher data consumption and platform usage. New offerings, including Snowpark and Cortex, can expand Snowflake Inc. (NYSE:SNOW)’s value proposition, bringing in new customers and encouraging existing clients to enhance usage.
Baron Funds, an investment management firm, released its Q3 2024 investor letter. Here is what the fund said:
“Snowflake Inc. (NYSE:SNOW) is a leading cloud data platform predominantly used for data analytics. Shares fell 15.2% in the third quarter due to a cybersecurity incident, a shifting competitive landscape, a change in leadership, and general macro complexities which are pressuring customer IT budgets. With generative AI (Gen AI) front and center, both investors and customers are closely evaluating Snowflake’s positioning in the future data ecosystem. Databricks and other competitors whose core users are data scientists who are also key buyers of Gen AI technologies, are benefiting. In addition, while Snowflake’s product innovation push should fuel future growth, it may also lead to short-term headwinds to profitability. Management reported healthy demand for its core data analytics, evidenced by solid growth rates among current customers alongside new go-to-market initiatives that could support growth. We are optimistic the new CEO, Sridhar Ramaswamy, can lead the company towards an AI-centric strategy, and therefore remain shareholders.”
8. HubSpot, Inc. (NYSE:HUBS)
% Gain Over 6-Month Period: ~31.3%
Average Upside Potential: ~38.0%
Number of Hedge Fund Holders: 73
HubSpot, Inc. (NYSE:HUBS) is engaged in providing a cloud-based customer relationship management (CRM) platform for businesses. Barclays upped the company’s price target to $815 from $725, keeping an “Equal Weight” rating. As per the analyst, the company’s increased Pro and Enterprise tier and multi-hub adoption continue to aid its fiscal 2025 revenue outlook. Elsewhere, analysts at Needham upped their price objective on HubSpot, Inc. (NYSE:HUBS)’s stock to $900 from $730, maintaining a “Buy” rating.
As per the firm’s analysts, HubSpot, Inc. (NYSE:HUBS) remains in a prime position to fuel subscription growth earlier than several of its SaaS counterparts as the broader economic cycle starts to shift. Entering 2025, the company remains focused on strengthening its position as the leading AI-first customer platform for scaling companies. For FY 2025, HubSpot, Inc. (NYSE:HUBS) expects total revenue of $2.985 billion – $2.995 billion, reflecting a rise of 14% YoY on an as-reported basis and 16% in constant currency. The company’s commitment to AI integration continues to act as a standout feature of the current product development efforts. The roll-out of Breeze Intelligence, which happens to be a competitively-priced product which integrates with generative AI and data offerings, highlights HubSpot, Inc. (NYSE:HUBS)’s focus on innovation. This new product can enhance its competitive edge in the broader market.
7. GE Vernova Inc. (NYSE:GEV)
% Gain Over 6-Month Period: ~53.6%
Average Upside Potential: ~38.4%
Number of Hedge Fund Holders: 111
GE Vernova Inc. (NYSE:GEV) is an energy company, which is engaged in the provision of various products and services that generate, transfer, orchestrate, convert, and store electricity. The company remains well-positioned to capitalize on the higher global demand for electricity, mainly because of the data centers and electrification trends. GE Vernova Inc. (NYSE:GEV)’s robust presence in gas power, grid solutions, and renewable energy enables it to cater to multiple aspects of this growing demand. With electricity consumption continuing to rise, the company is expected to see strong growth opportunities throughout its business segments, exceeding current market projections.
GE Vernova Inc. (NYSE:GEV) remains well-placed to reap the benefits from several major industry trends, such as the global energy transition, increased electrification, and the elevated demand for clean energy solutions. Its diverse portfolio enables the company to address several aspects of these trends, ranging from conventional power generation to renewable energy and grid modernization. Overall, GE Vernova Inc. (NYSE:GEV)’s robust market position is aided by its technological expertise, global reach, and extensive installed base.
Fidelity Investments, an investment management company, recently released its Q3 2024 investor letter. Here is what the fund said:
“Among individual holdings, the top relative contributor was an overweight stake in GE Vernova Inc. (NYSE:GEV). The company’s shares gained about 49% the past three months, as the power-generation business that split from General Electric on April 2 continued to fare well as a stand-alone entity. On July 24, the company reported quarterly earnings that were better than expected, boosted by its natural gas power-turbine business, and released an optimistic financial forecast for the rest of 2024.”
6. Reddit, Inc. (NYSE:RDDT)
% Gain Over 6-Month Period: ~165.1%
Average Upside Potential: ~39.3%
Number of Hedge Fund Holders: 87
Reddit, Inc. (NYSE:RDDT) operates a digital community in the US and internationally. Needham analyst Laura Martin has maintained a bullish stance on the company’s stock, offering a “Buy” rating. The analyst’s rating is backed by several favorable performance indicators demonstrated by the company’s Q4 2024 results. Reddit, Inc. (NYSE:RDDT)’s total revenue went up by 71% YoY to $427.7 million in Q4 2024, with Ad revenue rising 60% YoY to $394.5 million. As per the analyst, these metrics demonstrate a strong business model and sound monetization strategies.
Furthermore, Reddit, Inc. (NYSE:RDDT) has successfully introduced new products such as Reddit Search and Reddit Answers, which continue to improve user discovery and engagement. Its gross margin expansion and healthy FCF projections further strengthen its financial health. Also, Reddit, Inc. (NYSE:RDDT)’s strategic moves in content licensing and international user growth with the help of AI-driven language translations can act as promising avenues for potential growth. The company’s investments in AI and ML continue to hold strong promise for fueling revenue growth. Its AI-powered search improvements and content recommendation algorithms can result in improved user engagement and time spent on the platform. This can help create more opportunities for ad impressions and revenue generation.
Reddit, Inc. (NYSE:RDDT)’s AI initiatives tend to go over and above the user-facing features. Its acquisition of Memorable AI and a strong emphasis on incorporating AI/ML into the advertising platform can lead to efficient ad targeting and improved ROI for advertisers. This can potentially attract larger ad budgets from current and new clients.
5. Atlassian Corporation (NASDAQ:TEAM)
% Gain Over 6-Month Period: ~55.3%
Average Upside Potential: ~41.6%
Number of Hedge Fund Holders: 75
Atlassian Corporation (NASDAQ:TEAM) is engaged in designing, developing, licensing, and maintaining various software products. Keith Weiss from Morgan Stanley reiterated a “Buy” rating on the company’s stock, with a price target of $315.00. The analyst’s optimism around the company’s prospects is supported by Atlassian Corporation (NASDAQ:TEAM)’s expanding market opportunities throughout several large sectors, together with significant potential for cross-selling and upselling as a result of a broadened range of solutions and a more focused go-to-market strategy. Furthermore, the ongoing migration from Data Center to Cloud, together with the company’s strong pricing power, continue to paint a favourable outlook for the company.
The expected operational efficiency gains, mainly with the internal use of Gen AI to fuel developer productivity, are some of the growth enablers. Elsewhere, Barclays analyst Ryan MacWilliams upped the price objective on Atlassian Corporation (NASDAQ:TEAM)’s stock to $350 from $275, keeping an “Overweight” rating. The firm believes that investors can gain more confidence in Atlassian Corporation (NASDAQ:TEAM)’s medium-term revenue growth algorithm considering management’s optimism around customer desire to increase their spend with the company and higher interest in committing to a cloud migration.
Artisan Partners, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“Among our top Q4 contributors were Atlassian Corporation (NASDAQ:TEAM), Spotify and Marvell Technology. Atlassian provides collaboration and productivity software tools—a large, structurally growing addressable market that is expanding from the core software developer market to a much larger “knowledge worker” market. Along with much of the software industry, the company went through a period of weakness as small and medium-sized businesses pulled back spending due to macroeconomic concerns, and enterprise IT spending shifted toward AI projects at the expense of traditional cloud software offerings. However, shares rallied after earnings results beat expectations and showed signs of a turnaround, including higher-than-expected paid seat expansion.”
4. Tesla, Inc. (NASDAQ:TSLA)
% Gain Over 6-Month Period: ~32.4%
Average Upside Potential: ~43.4%
Number of Hedge Fund Investors: 126
Tesla, Inc. (NASDAQ:TSLA) is engaged in designing, developing, manufacturing, leasing, and selling EVs, and energy generation and storage systems. Morningstar believes that the company’s strong brand cachet as a luxury automaker commands premium pricing. At the same time, its EV manufacturing expertise enables it to make vehicles cheaper than its competitors. Tesla, Inc. (NASDAQ:TSLA) is well-placed to disrupt the broader automotive and power generation industries with the help of its technology for EVs, AVs, batteries, and solar generation systems. Furthermore, the company’s full self-driving software is expected to help it achieve profit growth over the coming years with the improvement in technology, resulting in higher adoption by Tesla drivers as well as licensing from several other auto manufacturers.
Furthermore, Tesla, Inc. (NASDAQ:TSLA)’s investments in Al and autonomous driving technology are expected to create significant value over and above its core automotive business. The Robotaxi service is expected to revolutionize urban transportation and offer the company a lucrative new business model. Apart from this, with the world transitioning to renewable energy sources, the demand for efficient energy storage solutions can significantly grow. Tesla, Inc. (NASDAQ:TSLA)’s Powerwall and Megapack products place it well to capitalize on these evolving trends in both residential and utility-scale markets.
Baron Funds, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“Tesla, Inc. (NASDAQ:TSLA) designs, manufactures, and sells electric vehicles, related software and components, and solar and energy storage products. Shares rose on growth in the energy segment, the promise of new model launches in 2025, and increasing investor confidence in Tesla’s AI initiatives. Despite macroeconomic challenges, delivery data in major markets like China have shown considerable improvement. The energy and automotive segments demonstrated stronger-than-expected profitability. Tesla also expanded its advanced computing center in Texas, released improved version of its software-enhanced driving solution, and is set to launch new mass market vehicles years after the initial rollouts of Models 3 and Y. Expectations of deregulation under the incoming administration point to the potential acceleration of new technology rollouts, which could enhance Tesla’s leadership position in real world AI and bolster investor confidence that Tesla will benefit from these large and attractive growth opportunities.”
3. Robinhood Markets, Inc. (NASDAQ:HOOD)
% Gain Over 6-Month Period: ~136.7%
Average Upside Potential: ~65%
Number of Hedge Fund Holders: 79
Robinhood Markets, Inc. (NASDAQ:HOOD) operates a financial services platform. Cantor Fitzgerald initiated coverage of the company’s stock with an “Overweight” rating and a price objective of $69. As per the firm, Robinhood Markets, Inc. (NASDAQ:HOOD) happens to be one of the most popular financial services platforms, mainly among younger generations. The company now possesses a handful of growth vectors that are expected to support through-cycle growth and market share gains, says the analyst.
Furthermore, Cantor Fitzgerald opines that the market has been underestimating Robinhood Markets, Inc. (NASDAQ:HOOD)’s potential within both equities and crypto. The firm expects platform expansion to drive upside surprises to profitability over the medium-term. Elsewhere, BofA Securities remains optimistic about the company, and maintained a “Buy” rating and a price objective of $65.00. The analyst highlighted numerous reasons for an optimistic outlook on Robinhood Markets, Inc. (NASDAQ:HOOD), lauding the platform’s higher retail engagement and strong organic growth. According to the analyst, the company has a significant growth potential in the self-directed retail and cryptocurrency sectors.
Artisan Partners, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“During the quarter, we initiated new GardenSM positions in US Foods, Pure Storage and Robinhood Markets, Inc. (NASDAQ:HOOD). Robinhood has emerged as the go-to-trading platform for millennials, boasting approximately 25 million accounts (versus Charles Schwab’s 34 million). The company’s user base skews younger, with deposits growing significantly faster than the broader industry due to several drivers, including the rise of self-directed trading, the generational wealth transfer to millennials and increasing market share. As Robinhood’s customer base matures and accumulates wealth, we believe the company is well positioned to expand its product offerings to meet evolving financial needs. Furthermore, management’s focus on profitable growth and a 90% fixed cost structure suggests meaningful margin expansion potential.”
2. MicroStrategy Incorporated (NASDAQ:MSTR)
% Gain Over 6-Month Period: ~166.0%
Average Upside Potential: ~80.8%
Number of Hedge Fund Holders: 44
MicroStrategy Incorporated (NASDAQ:MSTR), doing business as Strategy, provides AI-powered enterprise analytics software and services. Maxim upped the company’s price target to $500 from $480, keeping a “Buy” rating after it announced to rebrand itself, and changing the name to Strategy. Maxim believes that it is better aligned with its dual focus as a bitcoin treasury company as well as a business intelligence software company. The firm has increased the target based on its 12-month estimated value of MicroStrategy Incorporated (NASDAQ:MSTR)’s bitcoin holdings, plus the value of the core software business. Notably, as of December 31, 2024, the carrying value of its digital assets (comprised of approximately 447,470 bitcoins) sat at $23.909 billion.
The company is at the cutting edge of innovation, championing the 2 most transformative technologies of the 21st century: Bitcoin and AI. Looking ahead, MicroStrategy Incorporated (NASDAQ:MSTR) is confident about enhancing shareholder value via the strategic initiatives in Bitcoin and AI technologies. It remains well-placed to continue growth and transformation efforts, courtesy of robust investor backing, along with a focus on value creation and transparency. Furthermore, higher institutional adoption of Bitcoin is expected to significantly benefit MicroStrategy Incorporated (NASDAQ:MSTR).
Greenlight Capital, an investment management firm, released its Q4 2024 investor letter. Here is what the fund said:
“There is an open debate as to whether Bitcoin will at some point enter the mainstream as an official currency. In fact, there is a bill before Congress for the U.S. to establish a “Strategic Bitcoin Reserve” and buy one million Bitcoins over five years. The bill’s purpose appears to be the use of public funds to ramp up the price of Bitcoin, thereby enhancing the wealth of existing Bitcoin holders. This seems a dubious use of taxpayer funds, but the new administration has a lot of Bitcoin-owning supporters, so it might happen. More likely, cooler heads will decide that the government should not borrow another trillion dollars in the bond market to speculate in Bitcoin and that there is, in fact, nothing strategic about doing so.
One of the biggest owners of Bitcoin is MicroStrategy Incorporated (NASDAQ:MSTR). While MSTR owns a small software business, its principal pursuit is buying Bitcoin. In practice, MSTR is an investment company that buys and holds Bitcoin.2 MSTR trades at a large premium to the value of the underlying Bitcoin it holds. The idea is to raise money from new investors at a premium and use the proceeds to buy more Bitcoin. Since the Bitcoin that MSTR buys costs less than the Bitcoin-implied value of MSTR’s stock, the new investment is dilutive to new investors but accretive to existing investors. MSTR’s promoters have labeled the return to existing investors created by this scheme the “Bitcoin yield”. As Bitcoin itself yields nothing, the Bitcoin yield is simply a measure of the Ponzi finance’s effectiveness. Lately, it has been pretty effective.”
1. Summit Therapeutics Inc. (NASDAQ:SMMT)
% Gain Over 6-Month Period: ~54.7%
Average Upside Potential: ~84.3%
Number of Hedge Fund Holders: 25
Summit Therapeutics Inc. (NASDAQ:SMMT) is a biopharmaceutical company, which is focused on the discovery, development, and commercialization of patient, physician, caregiver, and societal friendly medicinal therapies. Goldman Sachs analyst Salveen Richter initiated coverage of the company’s stock with a “Buy” rating and a price objective of $42. As per the analyst, Summit Therapeutics Inc. (NASDAQ:SMMT)’s lead bispecific antibody asset ivonescimab, in-licensed from Chinese biotech Akeso, demonstrated strong efficacy in recent Phase 3 head-to-head data in comparison to standard-of-care Keytruda in first-line advanced non-small cell lung cancer in China.
Also, Akeso, Inc. announced that its partner on ivonescimab, Summit Therapeutics Inc. (NASDAQ:SMMT) entered into a clinical trial collaboration with Pfizer Inc. in a bid to evaluate ivonescimab, which is a novel, investigational PD-1 / VEGF bispecific antibody, in combination with several of Pfizer’s antibody drug conjugates (ADCs) throughout multiple solid tumor settings. With Summit Therapeutics Inc. (NASDAQ:SMMT) seeking to ramp up the development of its potentially transformative ivonescimab throughout non-small cell lung cancer and other solid tumor settings, the collaboration is expected to enable Summit Therapeutics Inc. (NASDAQ:SMMT) to quickly advance beyond its promising late-stage development plan to evaluate ivonescimab in combination with some of the most innovative ADCs from Pfizer.
While we acknowledge the potential of SMMT 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 time frame. If you are looking for a deeply undervalued AI stock that is more promising than SMMT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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