In this article, we discuss the 11 hot growth stocks to buy now. If you want to read about some more growth stocks that are active in the market, go directly to the 5 Hot Growth Stocks To Buy Right Now.
As 2024 moves forward, the outlook for both the stock and bond markets undergoes regular fluctuations, influenced by various factors such as economic data releases, Federal Reserve communications, and changes in interest rate forecasts. As an example, the Federal Reserve hiked its benchmark interest rate 11 times from March 2022 to July 2023 amid resurgent inflation, reaching its highest level in more than two decades. This uptick in borrowing costs has contributed to alleviating inflationary pressures, with recent data showing consumer prices increasing by only 3.1% from January 2023, marking a decline from the peak of 9.1% in June 2022 and edging closer to the Fed’s 2% target.
Surprisingly, progress against inflation has been notable without inflicting significant economic hardship, with unemployment remaining below 4% for 24 consecutive months. Moreover, employers have consistently added an average of 244,000 jobs per month over the past year, with December and January seeing over 300,000 new jobs each. This combination of subdued inflation and GDP growth has fostered optimism that perhaps the Fed can achieve a rare “soft landing.”
On the other hand, the current year has an array of growth opportunities spanning different sectors within the capital markets. Leading the forefront is the technology sector, with artificial intelligence (AI) spearheading innovation. Its swift advancements and widespread integration across various industries render it an appealing option for investors pursuing growth and transformative prospects. As an illustration to this point, venture capital investments in generative AI and AI-related startups surged to nearly $50 billion the past year alone, with notable startups such as OpenAI, Anthropic, and Inflection commanding substantial portions of these investments.
Following suit is the healthcare sector, securing the second spot, as it progresses alongside developments in medical technologies and a growing emphasis on personalized medicine. The increasing demand for GLP-1, a medication class utilized in managing type 2 diabetes (T2D), is a key factor driving this trend. According to research by J.P. Morgan, the GLP-1 category is projected to surpass $100 billion by 2030, with growth attributed equally to its use in treating both diabetes and obesity.
When it comes to stock selection for substantial returns in such times, focusing on growth stocks is a popular strategy. Growth stocks are characterized by higher share prices relative to their earnings per share, reflecting expectations of significant future growth. One metric commonly used to identify growth stocks is the price-to-earnings ratio (P/E ratio). This ratio compares the current share price to the earnings per share, indicating the premium that the market is willing to pay for a stock’s earnings potential.
Some of the notable companies included in our list of hot growth stocks to buy are Salesforce, Inc. (NYSE:CRM) and Advanced Micro Devices, Inc. (NASDAQ:AMD), as well as industry giants like NVIDIA Corporation (NASDAQ:NVDA) and Uber Technologies, Inc. (NYSE:UBER), among others listed below.
A close-up of a stock market ticker displaying the company’s stocks.
Our Methodology
In this piece, we utilized stock screeners to identify stocks meeting specific criteria as of March 28. Our selection criteria included stocks with an average 3-month volume surpassing 3 million and a P/E ratio exceeding 50. Additionally, we incorporated a quarterly revenue growth rate of over 10% as another parameter for our list. Lastly, we provided insights into the number of hedge funds invested in each stock, shedding light on growth stocks favored by hedge funds.
Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
11. Palantir Technologies Inc. (NYSE:PLTR)
P/E Ratio: 254.82
Avg Volume: 70.81 million
Quarterly Revenue Growth: 19.61%
Number of Hedge Fund Holders: 44
Palantir Technologies Inc. (NYSE:PLTR) operates as a software company specializing in data fusion platforms, facilitating both machine-assisted and human-driven data analysis. Its product platform includes Palantir Gotham, Palantir Apollo, and Palantir Foundry.
Following encouraging financial results in the fourth quarter, Palantir Technologies Inc. (NYSE:PLTR) witnessed a 19% surge in its stock. Revenue increased by 20% to $608 million, driven by robust demand for its Artificial Intelligence Platform (AIP) among commercial customers, although growth in the government segment remained subdued. Additionally, GAAP net income tripled to $93 million as Palantir focused on cost control measures.
According to Insider Monkey’s analysis of 933 hedge fund portfolios for the December quarter of 2023, 44 had stakes in Palantir Technologies Inc. (NYSE:PLTR). D. E. Shaw emerged as the largest investor, owning 20.75 million shares valued at $356.39 million.
Much like Salesforce, Inc. (NYSE:CRM), Advanced Micro Devices, Inc. (NASDAQ:AMD), NVIDIA Corporation (NASDAQ:NVDA) and Uber Technologies, Inc. (NYSE:UBER), Palantir Technologies Inc. (NYSE:PLTR) is one of the best trending growth stocks.
10. CrowdStrike Holdings, Inc. (NASDAQ:CRWD)
P/E Ratio: 883.17
Avg Volume: 3.94 million
Quarterly Revenue Growth: 32.63%
Number of Hedge Fund Holders: 62
CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is a cybersecurity technology company headquartered in Austin, Texas, USA. Specializing in cloud workload and endpoint security, threat intelligence, and cyberattack response services, it plays a crucial role in safeguarding digital assets.
On March 14, analysts at Cantor Fitzgerald maintained an Overweight rating and set a price target of $400 for CrowdStrike Holdings, Inc. (NASDAQ:CRWD).
In the fourth quarter of 2023, 62 out of the 933 hedge funds tracked by Insider Monkey had investments in CrowdStrike Holdings, Inc. (NASDAQ:CRWD). The largest hedge fund investor in the company is Jim Simons’s Renaissance Technologies, with holdings valued at $450 million.
TimesSquare Capital U.S. Mid Cap Growth Strategy stated the following regarding CrowdStrike Holdings, Inc. (NASDAQ:CRWD) in its fourth quarter 2023 investor letter:
“Across the Information Technology universe, we seek companies possessing differentiated capabilities, products, and services. CrowdStrike Holdings, Inc. (NASDAQ:CRWD) provides cloud-delivered protection across endpoints and cloud workloads. Their stock rallied 53% on the heels of solid fiscal third quarter results, with net new annualized recurring revenues accelerating sequentially.”
9. Shopify Inc. (NYSE:SHOP)
P/E Ratio: 857.44
Avg Volume: 9.86 million
Quarterly Revenue Growth: 23.58%
Number of Hedge Fund Holders: 68
Shopify Inc. (NYSE:SHOP) stands as a premier provider of internet infrastructure for commerce, offering a suite of tools that empower businesses to establish, expand, market, and oversee retail operations across various scales. Serving millions of businesses in 175 countries, Shopify Inc. (NYSE:SHOP) plays a pivotal role in bolstering a diverse array of enterprises.
As of December 2023, Insider Monkey’s analysis of 933 hedge fund portfolios revealed that 68 of them held shares of Shopify Inc. (NYSE:SHOP). Notably, the largest shareholder among them was Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke, and John Campbell, with shares valued at $1.6 billion.
Artisan Mid Cap Fund stated the following regarding Shopify Inc. (NYSE:SHOP) in its fourth quarter 2023 investor letter:
“Among our top contributors were Chipotle, DexCom and Shopify Inc. (NYSE:SHOP). We got a chance to initiate a position in Shopify during the 2022 growth stock selloff, with the view that this is a leading e-commerce franchise that will continue to benefit from key secular tailwinds. Like many market participants, we were concerned about the company’s capital-intensive fulfillment investments in the face of a slowing e-commerce market and welcomed the news that it decided to exit the logistics business in favor of a capital-light partnership model. This change in strategy significantly narrows the downside range of outcomes, and allows us to focus on what it does so well: develop great e-commerce software solutions for brands of all sizes. We have been encouraged by Shopify’s subsequent pace of innovative new product enhancements, which include the use of AI assistants to help brands run their businesses.”
8. Block Inc (NYSE:SQ)
P/E Ratio: 14582.76
Avg Volume: 10.80 million
Quarterly Revenue Growth: 24.13%
Number of Hedge Fund Holders: 75
Block Inc. (NYSE:SQ), originally named Square Inc., is an American public company founded in 2009 by Jack Dorsey and Jim McKelvey. It operates across various sectors within the financial technology industry. With nearly 4 million merchants and 51 million users as of 2023, Block’s service network has experienced substantial growth.
The surge in Block Inc. (NYSE:SQ) shares followed the release of its Q4 results and strong 2024 EBITDA guidance. In the fourth quarter, Block Inc. (NYSE:SQ) reported a net income of 2 cents per share, a significant improvement compared to the loss of 93 cents per share in the year-ago period.
In the fourth quarter of 2023, 75 out of the 933 hedge funds tracked by Insider Monkey held stakes in Block Inc. (NYSE:SQ), marking a notable increase from 60 hedge funds in the previous quarter.
7. Merck & Co., Inc. (NYSE:MRK)
P/E Ratio: 998.11
Avg Volume: 8.69 million
Quarterly Revenue Growth: 13.82%
Number of Hedge Fund Holders: 98
Merck & Co., Inc. (NYSE:MRK), a renowned American multinational pharmaceutical company headquartered in Rahway, New Jersey, has a rich history dating back to the Merck Group, founded in Germany in 1668. As the American arm of this esteemed group, the company operates as Merck Sharp & Dohme or MSD outside the United States and Canada, maintaining a leading position in the pharmaceutical industry. Its focus areas include the development of medicines, vaccines, biologic therapies, and animal health products.
With a track record of consistent dividend growth spanning 11 consecutive years, Merck & Co., Inc. (NYSE:MRK) currently offers a quarterly dividend of $0.77 per share, translating to a dividend yield of 2.33% as of March 28.
In the fourth quarter of 2023, 98 out of the 933 hedge funds tracked by Insider Monkey held shares of Merck & Co., Inc. (NYSE:MRK). Among them, Ken Fisher’s Fisher Asset Management emerged as the company’s largest investor, with holdings valued at $1.4 billion.
6. Eli Lilly and Company (NYSE:LLY)
P/E Ratio: 136.85
Avg Volume: 3.20 million
Quarterly Revenue Growth: 28.10%
Number of Hedge Fund Holders: 102
Founded in 1876, Eli Lilly and Company (NYSE:LLY) is a renowned American pharmaceutical company based in Indianapolis, Indiana. Named after its founder, Colonel Eli Lilly, a pharmaceutical chemist and Civil War veteran, the company has a global presence, operating in 18 other countries.
Eli Lilly and Company (NYSE:LLY) currently pays out a quarterly dividend of $1.30 per share and has demonstrated consistent dividend growth over the past decade. Furthermore, the company has a notable track record of uninterrupted dividend payments to its shareholders for 138 years. As of March 16, the stock offers a dividend yield of 0.69%.
As of the end of December 2023, 102 out of the 933 hedge funds profiled by Insider Monkey had purchased and held shares of the company. Among these, Ken Fisher’s Fisher Asset Management held the largest stake in Eli Lilly and Company (NYSE:LLY), valued at $2.6 billion.
Similar to Salesforce, Inc. (NYSE:CRM), Advanced Micro Devices, Inc. (NASDAQ:AMD), NVIDIA Corporation (NASDAQ:NVDA) and Uber Technologies, Inc. (NYSE:UBER), Eli Lilly and Company (NYSE:LLY) is a hot growth stock to invest in.
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Disclosure. None. 11 Hot Growth Stocks To Buy Right Now was initially published on Insider Monkey.