Companies experiencing above-average earnings growth, which is often fueled by innovations and market expansions, are known as growth stocks. However, investing in them requires more than just chasing their rising share prices. These companies typically command higher valuations than their peers, which reflects investor confidence in their future potential. While they offer the prospect of substantial returns, they also come with heightened volatility and are susceptible to economic pressures like inflation and supply chain disruptions. Despite recent market fluctuations, periods of decline can present strategic entry points for long-term investors.
On February 20, Adam Crisafulli, Vital Knowledge founder, and Ryan Detrick, Carson Group chief market strategist, joined ‘Closing Bell Overtime’ on CNBC to discuss the state of the market. Detrick addressed the broadening nature of the market and the lack of panic following recent Fed minutes. He noted that all 11 sectors have increased year-to-date, with 7 sectors outperforming the S&P 500. Detrick highlighted that after two consecutive years of over 20% gains, the market has continued its upward trajectory, showing an increase of over 4%, almost 5%, so far this year. He emphasized that surprises in a bull market typically lean towards positive outcomes and reiterated that the ongoing rotation among sectors is beneficial for investors because it allows for a diversified portfolio.
Crisafulli then shifted the focus to specific companies which are set to report earnings. He connected these companies to trends in digital payments and marketing, emphasizing the role of data in driving customer loyalty and business growth in a modern economy. He discussed a broader theme of valuation reversion among high-multiple stocks and suggested that cheaper segments of the market are starting to catch up in terms of valuation expansion. Detrick added to this by discussing record highs for major indexes such as the S&P 500 and NASDAQ 100, as well as European indices like the DAX and Stoxx Europe 600. He also mentioned gold trading at record levels and questioned whether it is wise to invest at these heights or if the opportunity has passed. Detrick explained that they incorporated gold into their tactical models back in March 2023, adding more during a pullback post-election when the dollar rose sharply. He attributed gold’s rise to central bank indecision and suggested that the US dollar may have peaked. He advocated for including gold in a diversified portfolio, particularly within a 60-40 asset allocation model.
The overall discussion underscored the importance of diversification in investment strategies amidst changing market dynamics. That being said, we’re here with a list of the 12 best growth stocks to invest in according to analysts.
Methodology
We used stock screeners to compile a list of the top growth stocks. We then selected 12 stocks that had high average upside potential of over 30% and were the most popular among elite hedge funds. The stocks are ranked in ascending order of their average upside potential. We’ve also added the hedge fund sentiment for each stock, as of Q4 2024, which was sourced from Insider Monkey’s database.
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).
12 Best Growth Stocks to Invest In According to Analysts
12. Vertiv Holdings Co. (NYSE:VRT)
Number of Hedge Fund Holders: 92
Upside Potential as of February 19: 31.13%
Vertiv Holdings Co. (NYSE:VRT) designs, manufactures, and services digital infrastructure technologies and lifecycle services. These are essential for data centers, communication networks, and industrial environments worldwide. It offers a portfolio of power management, thermal management, and IT infrastructure solutions under well-known brands like Vertiv and Liebert.
Bank of America’s Andrew Obin reiterated a Buy rating on this company on January 21. He cited the company’s AI and data center positioning for this sentiment while projecting a 25% yearly EPS growth from 2024-2027, despite market caution. He sees undervalued potential due to both AI and non-AI revenue growth, driven by hyperscaler capex and overall data center expansion.
Power management is a critical component of AI data centers, and Vertiv Holdings Co. (NYSE:VRT) is a market leader in this area. AI’s demand for complex power distribution plays to the company’s strengths in AC and DC power conversion. It’s also investing in R&D and strategic acquisitions, such as BSE, to enhance its technology portfolio and maintain a competitive edge. It acquired BSE to enhance its cooling solutions for demanding AI data centers.
In Q4 2024, the company reported adjusted EPS of $0.99, which was a 77% year-over-year increase. 2025 adjusted EPS is projected between $3.5 and $3.6, with sales expected to reach $9.2 billion. The Americas are forecast to lead this growth, with sales increasing in the low 20% range. The company aims to stay price-cost positive and is expanding its capacity to meet the rising demand driven by AI and data center growth.
Baron Small Cap Fund highlighted the company’s strong performance as a key data center infrastructure provider. It cited its leadership in power and cooling, raised growth forecasts, and potential for further gains. The fund stated the following regarding Vertiv Holdings Co. (NYSE:VRT) in its Q4 2024 investor letter:
“Vertiv Holdings Co (NYSE:VRT), a critical digital infrastructure solutions provider for data centers, continued to perform well. With a leading market share in power and cooling applications for data centers, Vertiv is seen as a prime beneficiary of the AI-related data center buildout. At its November Analyst Day, Vertiv raised organic sales guidance to 12% to 14% CAGR for the next five years and gave guidance of 16% to 18% organic revenue growth for 2025. Vertiv also increased its target adjusted operating profit margin from 20% to 25%. While impressive on their own, these forecasts can prove conservative we think. With the stock up 141% in 2024, we have been trimming the stock into strength to manage position size but hold a large stake as we believe in its growth and that the stock is reasonably valued even after great appreciation the last two years.”
11. L3Harris Technologies Inc. (NYSE:LHX)
Number of Hedge Fund Holders: 48
Upside Potential as of February 19: 31.51%
L3Harris Technologies Inc. (NYSE:LHX) is an aerospace and defense technology company that delivers mission-critical solutions across several domains. Operating through specialized segments, it provides advanced technologies ranging from satellite payloads and ISR systems to tactical radios and propulsion systems. It serves both government and commercial clients worldwide.
The company has built a substantial satellite business, achieving a record backlog of 40 satellites in just five years. It’s a key partner in the SDA’s (Space Development Agency) Tranche 2 tracking layer program, which is a US government initiative to deploy a constellation of satellites. In the program, this company’s satellites are designed to detect and track hypersonic threats. L3Harris Technologies Inc. (NYSE:LHX) has already secured contracts for 38 satellites across various tranches, demonstrating its position in space-based missile defense. In 2024, it launched 4 satellites for SDA and 1 for MDA (Missile Defense Agency).
Its commitment to missile defense extends beyond satellites. It won contracts for the Glide Phase Interceptor and next-generation interceptor programs, which will fuel growth in its solid rocket motor business for decades. This aligns with national security priorities, including the development of advanced missile defense systems. The Space and Airborne Systems segment, which encompasses these activities, is projected to generate revenue between $6.9 billion and $7.1 billion in 2025. While facing some budgetary constraints in the space sector, the company anticipates growth resuming in 2026.
Diamond Hill Mid Cap Strategy initiated a position in L3Harris Technologies Inc. (NYSE:LHX) due to a favorable future defense budget, alignment with current defense priorities, and a compelling valuation after a share-price decline. It made the following comment about the company in its Q3 2023 investor letter:
“L3Harris Technologies, Inc. (NYSE:LHX) is a defense contractor focused primarily on communications, surveillance and electronic warfare. We anticipate the US’s defense budget will be better than expected over the next few years as the Defense Department focuses on preparing for peer-level threats — an area in which LHX’s capabilities fit nicely. We believe there is room for improvement in recent execution — particularly at recently acquired Aerojet Rocketdyne — and we think LHX’s new management team is well-qualified to improve results. We accordingly capitalized on a recent share-price decline to initiate a position at what we consider a compelling valuation.”
10. Coherent Corp. (NYSE:COHR)
Number of Hedge Fund Holders: 71
Upside Potential as of February 19: 38.15%
Coherent Corp. (NYSE:COHR) specializes in engineered materials, optoelectronic components, and laser systems. It serves markets like industrial, communications, electronics, and instrumentation. Operating across Networking, Materials, and Lasers segments, it provides a range of solutions from telecommunications products and advanced optics to laser systems and specialized materials.
The company is making headway in AI with its 800G transceivers. Earlier on November 18, 2024, Citi analyst Papa Sylla increased the stock’s price target to $136 from $106, maintaining a Buy rating. Sylla projects that the company will reach a 40% non-GAAP gross margin and $5 EPS by fiscal 2026, driven by AI sales in part. Citi believes that the market undervalues this AI potential.
Due to the strong adoption of its 800G transceivers, the company achieved record FQ2 2025 datacom revenue, which was up 4% sequentially and 79% year-over-year. To support this growth, indium phosphide production tripled year-over-year. This is a crucial semiconductor material used in lasers and other optoelectronic devices, which is needed for high-speed data transmission in applications like AI-driven data centers. The company also plans to increase production and sales of its 1.6T transceivers in 2025, and it’s already developing the next generation 3.2T transceivers. Coherent Corp. (NYSE:COHR) is investing in R&D to maintain its technological edge.
Invesco Small Cap Value Fund stated the following regarding Coherent Corp. (NYSE:COHR) in its Q3 2024 investor letter:
“Coherent Corp. (NYSE:COHR): This laser company develops and manufactures optoelectronic components and devices used in the communications, electronics and industrial markets. The company has been benefiting from growing awareness of an improved growth outlook driven by artificial intelligence (AI), given that its optical transceivers are key enablers for networking of AI servers.”
9. PG&E Corp. (NYSE:PCG)
Number of Hedge Fund Holders: 74
Upside Potential as of February 19: 39.86%
PG&E Corp. (NYSE:PCG) is an energy provider in northern and central California. It delivers electricity and natural gas to a wide range of customers. Using a diverse energy generation portfolio and extensive infrastructure, it ensures the reliable delivery of essential energy services.
It’s seeing a surge in the demand from data centers, making this beneficial load segment a key growth area. The company has applications for 5.5 gigawatts of new data center power, with 1.4 gigawatts already moving through advanced planning stages, which involves 15 customers and 27 sites. This growth is projected to come online between 2026 and 2030. The influx of data center power demand offers economic advantages. The company estimates that for every 1,000 megawatts of new data center load, customer bills could decrease by 1% to 2%.
To manage this growth efficiently, PG&E Corp. (NYSE:PCG) proposed “electric rule 30” to the CPUC (California Public Utilities Commission), which would allow large customers to fund upfront costs, thus protecting existing customers from potential financial risks. The company views this beneficial load as a long-term growth driver, allowing it to invest in grid improvements while keeping costs down. It’s taking a strategic approach to balance growth with affordability and is working closely with regulators to ensure that these projects benefit all customers.
Third Point Management discussed the implications of potential utility liability from California wildfires, emphasizing that PG&E Corp. (NYSE:PCG) benefits from AB1054 protections due to its safety compliance and substantial wildfire mitigation investments. It highlighted the financial safeguards in place, which include cost recovery mechanisms and an insurance fund, which provide stability despite inherent risks in grid infrastructure. Here’s what it said in its Q4 2024 investor letter:
“We are devastated by the recent events in Southern California. Several of our family members and team members call Los Angeles home, and our hearts are with all impacted by the fires.
While PG&E Corporation (NYSE:PCG) does not operate in this region, there is press speculation that one of the fires, Eaton, may have been related to transmission equipment owned by SoCal Edison (SCE), another investor-owned utility (parent company Edison International.) Edison has stated publicly that they do not believe their equipment was involved. The investigation is ongoing, and we believe it is premature to make conclusions about the origin of the fire…
If the Eaton fire ignition was related to SCE equipment, the California legal standard of “inverse condemnation” exposes SCE to resultant property damage liabilities. After PG&E’s bankruptcy in 2019, California passed a bill called AB1054 which protects the state’s investor-owned utilities (Edison, PG&E and Sempra) from these liabilities as long as they adhere to a rigorous safety standard. This includes a comprehensive wildfire mitigation plan approved annually by the government and a commitment to spend billions to harden the grid; for example, PG&E is spending a whopping $18 billion on wildfire mitigation from 2023 -2025. In exchange, AB1054 includes several protections, such as a legal prudency standard that entitles the utility to cost recovery via multiple avenues in the event of a catastrophic fire and a $21 billion insurance fund to cover incurred liabilities. SCE has an active safety certificate and thus should benefit from the protections under AB 1054, just as PG&E would in case of a future fire. Regulator-approved cost recovery is a routine proceeding for utilities in areas prone to severe climate events (hurricanes, tornadoes, earthquakes, etc.) in acknowledgement of the fact that it is not feasible to remove all risk from overhead grid infrastructure. PCG has been the preeminent advocate in California for undergrounding, which we believe is the only way to permanently eliminate wildfire risk from grid assets…” (Click here to read the full text)
8. Astera Labs Inc. (NASDAQ:ALAB)
Number of Hedge Fund Holders: 51
Upside Potential as of February 19: 39.91%
Astera Labs Inc. (NASDAQ:ALAB) leads semiconductor-based connectivity solutions and specializes in intelligent technologies for cloud and AI infrastructure. Through its sophisticated connectivity platform, including smart fabric switches, DSP retimers, and the COSMOS software suite, it empowers hyperscalers and OEMs to optimize and manage large-scale deployments. This drives the advancements in AI and cloud computing.
On February 11, Needham’s Quinn Bolton reiterated a Buy rating with a $140 target for the company. This sentiment came from its strong performance and growth potential. Its Q4 2024 results beat expectations with a 25% quarterly and 179% year-over-year increase. Revenue jumped 242% for the full year 2024. This was driven by Taurus SCMs, Aries SCMs, and Aries PCIe retimers, which demonstrate product diversification. All of these are the company’s high-speed connectivity solutions designed to enhance data transfer within AI and cloud infrastructure.
The company is also developing Leo CXL controllers and Scorpio Smart Fabric Switches, with Scorpio projected to become its largest product line, targeting the expanding AI fabric market. These new developments are expected to optimize data flow and interconnectivity within AI systems. Hyperscaler investments in AI and cloud infrastructure are fueling Astera Labs Inc.’s (NASDAQ:ALAB) growth. It’s involved in the development of the Ultra Accelerator Link (UA Link), which is an open standard for AI cluster interconnects. The company now projects FQ1 2025 revenues between $151 million and $155 million and expects Scorpio products to contribute at least 10% of this 2025 revenue.
Alger Small Cap Growth Fund highlighted the company’s strong performance which was driven by its innovative connectivity solutions for data-centric systems and exceeding analyst expectations in recent results. The fund stated the following regarding Astera Labs Inc. (NASDAQ:ALAB) in its Q4 2024 investor letter:
“Astera Labs, Inc. (NASDAQ:ALAB) is a semiconductor company specializing in connectivity solutions for data-centric systems, including cloud computing, artificial intelligence, and machine learning. Its products optimize data flow and performance in servers, GPUs, and AI accelerators, addressing bottlenecks in high-performance computing environments. The company’s Intelligent Connectivity Platform (ICP) integrates advanced semiconductor hardware with the proprietary COSMOS software suite, delivering customizable and cost-effective solutions. Astera’s Platform-Specific Standard Products (PSSP) enhance flexibility with features such as predictive analytics, monitoring, and troubleshooting. Backed by strong relationships with leading cloud and AI providers, we believe Astera is well positioned in rapidly growing markets, demonstrating high profitability and industry-leading gross margins. During the quarter, shares contributed to performance after reporting better-than-expected fiscal third-quarter results, with revenues and gross margins exceeding analyst estimates. Specifically, revenue growth spanned all four product segments, led by accelerated custom silicon sales and robust GPU demand. Management also raised fiscal fourth-quarter guidance, citing expanding product ramps and a broader customer base.”
7. Manhattan Associates Inc. (NASDAQ:MANH)
Number of Hedge Fund Holders: 34
Upside Potential as of February 19: 46.63%
Manhattan Associates Inc. (NASDAQ:MANH) provides software solutions that empower businesses to optimize supply chain, inventory, and omni-channel operations. It offers products like warehouse and transportation management systems, alongside omnichannel and inventory optimization tools. It serves diverse industries worldwide, enabling them to navigate the complexities of modern commerce.
In Q4 2024, the company’s cloud subscription revenue surged by 26% year-over-year. It grew by 32% for the full year 2024. The company anticipates maintaining a 20%+ cloud subscription revenue growth rate over the next several years, with projections indicating that cloud revenue will likely outpace services revenue by the end of 2026. This growth comes from the acquisition of new customers, the transition of existing on-premise customers to cloud-based solutions, and the successful cross-selling of its expanding product portfolio. With over 80% of on-premise customers yet to migrate, there’s an opportunity for continued cloud growth. Furthermore, a pipeline of potential new customers, representing ~35% of demand, supports this upward trajectory.
The company is heavily invested in innovation, allocating $138 million to R&D in 2024. This investment is driving the development of advanced cloud-native solutions, such as Manhattan Active Supply Chain Planning and enhanced PoS systems, which are broadening its market reach. For 2025, Manhattan Associates Inc. (NASDAQ:MANH) is forecasting cloud revenue to be between $405 and $410 million.
Baird Mid Cap Growth Equity Strategy stated the following regarding Manhattan Associates Inc. (NASDAQ:MANH) in its Q2 2024 investor letter:
“We made several adjustments to our technology sector mix. We also added Manhattan Associates, Inc. (NASDAQ:MANH) and Vertiv Holdings. Manhattan Associates provides enterprise grade warehouse management software. As a market leader, we believe Manhattan will benefit from a continuation of legacy software upgrades.”
6. Regeneron Pharmaceuticals Inc. (NASDAQ:REGN)
Number of Hedge Fund Holders: 68
Upside Potential as of February 19: 46.81%
Regeneron Pharmaceuticals Inc. (NASDAQ:REGN) discovers, develops, and commercializes life-transforming medicines for a range of serious diseases. With a portfolio of approved therapies, including EYLEA, Dupixent, and Libtayo, and a robust pipeline targeting eye diseases, inflammatory conditions, cancer, and rare diseases, it’s advancing innovative treatments and improving patient outcomes globally.
Dupixent, with over a million patients globally, saw global sales rise 15% to $3.7 billion in Q4 2024. US sales alone rose 10%. EYLEA/EYLEA HD generated combined US sales of $1.5 billion in Q4, capturing 46% of the anti-VEGF (vascular endothelial growth factor) market, with EYLEA HD sales reaching $1.2 billion for the full year. Libtayo saw global sales jump 50% to $367 million in Q4. These commercial successes translated to a 10% year-over-year revenue.
Regeneron Pharmaceuticals Inc. (NASDAQ:REGN) is expanding these franchises through new indications and product enhancements. For EYLEA HD, label expansions and a prefilled syringe are expected to drive uptake. Libtayo is targeting new approvals in skin and lung cancers. Dupixent is expanding into COPD, chronic urticaria, and bullous pemphigoid.
Baron Health Care Fun invested in Regeneron Pharmaceuticals Inc. (NASDAQ:REGN) due to its strong track record in drug development, successful existing products, and promising pipeline. This was despite the upcoming patent expirations. It stated the following in its Q3 2024 investor letter:
“We purchased Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN), a biopharmaceutical company that was built on a foundation in basic scientific research and antibody development. The company has successfully developed several blockbuster medicines, including Eylea and Eylea HD for retinal diseases (such as wet age-related macular degeneration, diabetic macular edema, and diabetic retinopathy) and Dupixent for immunological and inflammatory diseases (such as atopic dermatitis, asthma, and COPD). While Eylea is nearing the end of its patent life and faces potential biosimilar competition, the company has been transitioning patients to Eylea HD, which is a higher dose, longer-acting formulation of Eylea, and Dupixent is growing rapidly through indication expansion. Beyond the current product portfolio, Regeneron has an exciting new product pipeline with over 35 candidates in various stages of development, including a novel treatment for treating severe food allergy, a combination checkpoint inhibitor therapy for melanoma, lung cancer and other solid tumors, biospecific antibodies for blood cancers, and Factor XI antibodies for blood clot prevention, among others. Based on Regeneron’s track record of success discovering and developing new drugs, we are optimistic the pipeline will deliver some successes, which we think will drive upside in the stock.”
5. Trade Desk Inc. (NASDAQ:TTD)
Number of Hedge Fund Holders: 63
Upside Potential as of February 19: 47.47%
Trade Desk Inc. (NASDAQ:TTD) provides a powerful, cloud-based platform that revolutionizes digital advertising. By enabling buyers to plan, manage, and optimize data-driven campaigns across diverse formats and channels, it empowers advertisers to reach their target audiences on a global scale.
The company’s growth is anchored in its AI-powered advertising platform. The Kokai platform, its latest upgrade, is designed to enhance precision and value for clients, driving audience expansion. Retail data offerings are also a focus, which allows clients to measure real-world return on ad spend. Positioning itself within the $1 trillion advertising industry, the company currently manages over $12 billion in ad spend. It’s preparing for potential shifts in the open internet, notably a possible reduction in Google’s involvement, and emphasizing its objectivity as a key differentiator. It’s also pushing Connected TV to become the leading channel in programmatic advertising.
Trade Desk Inc. (NASDAQ:TTD) is driving the adoption of OpenPath for a more efficient supply chain and actively pursuing Joint Business Plans (JBPs) with major brands and agencies, which outpace its general growth by 50%. The company is transitioning all clients to the Kokai platform. Q4 2024 revenue was up 22% year-over-year, with Q1 2025 revenue growth forecasts around 17%. CTV remains a dominant channel, accounting for a high-40s percentage share of the business.
Rowan Street Capital cited this company as their most successful investment, achieving a 54% annualized return due to opportunistic initial purchase during the pandemic and subsequent significant valuation expansion. It said the following regarding Trade Desk Inc. (NASDAQ:TTD) in its Q4 2024 investor letter:
“The Trade Desk (TTD): Investment Initiated: March 2020
Internal Rate of Return (IRR): 54%
The Trade Desk has been our most successful investment to date. March 2025 will mark five years since we opportunistically initiated our position at a cost basis of $17.40 (split-adjusted). Since then, TTD has appreciated more than sevenfold, delivering an annualized return of approximately 54%.
These exceptional results far outpace the company’s strong fundamental growth, with revenues and earnings compounding at approximately 25% annually over this period (refer to the table below). The primary reason for this outsized return lies in the price at which we were able to acquire TTD during the early days of the pandemic, when market fears briefly drove it down to just 10x revenues. Today, the valuation has expanded significantly to approximately 25x revenues, amplifying our returns…” (Click here to read the full text)
4. Summit Therapeutics Inc. (NASDAQ:SMMT)
Number of Hedge Fund Holders: 25
Upside Potential as of February 19: 51.30%
Summit Therapeutics Inc. (NASDAQ:SMMT) develops innovative therapies that prioritize patient, physician, and caregiver needs. With a focus on oncology and infectious diseases, its lead candidate, Ivonescimab, targets cancer immunotherapy. Its antibiotic portfolio, including SMT-738, addresses multidrug-resistant infections. This shows a commitment to tackling critical medical challenges.
The company is heavily invested in ivonescimab, which is a novel bispecific antibody. It targets both PD-1 and VEGF, showing promise in treating non-small cell lung cancer (NSCLC) and other solid tumors. In the HARMONi-2 trial, ivonescimab demonstrated a 49% reduction in disease progression compared to pembrolizumab. The company is actively pursuing nine Phase 3 trials, six of which focus on NSCLC, with the aim to establish ivonescimab as a leading treatment. Clinical trials are progressing rapidly. Enrollment for the HARMONi trial in EGFR-mutated NSCLC is complete, with top-line data expected mid-2025. The HARMONi-3 trial is being amended to include non-squamous NSCLC, significantly expanding the patient pool.
Summit Therapeutics Inc. (NASDAQ:SMMT) ended Q3 2024 with $487 million in cash, boosted by a $235 million private placement. The company is efficiently managing its cash burn, keeping it below $35 million per quarter. Clinical operations are accelerating, with increased enrollment following positive data releases. It’s focused on completing its Phase 3 trials and expanding ivonescimab’s application to other cancer types.
3. Genmab (NASDAQ:GMAB)
Number of Hedge Fund Holders: 19
Upside Potential as of February 19: 51.39%
Genmab (NASDAQ:GMAB) develops innovative antibody-based therapies for cancer and other serious diseases. With a portfolio of marketed products, including EPKINLY, TEPKINLY, and Tivdak, and a robust pipeline featuring Epcoritamab and tisotumab vedotin, it’s advancing groundbreaking treatments in oncology and beyond.
Its commercialized medicines, particularly EPKINLY and TIVDAK, are the primary drivers of its revenue. EPKINLY achieved $281 million in sales in 2024, with $78 million in Q4 alone, propelled by strong uptake in the US and Japan. Its potential peak sales are estimated to exceed $3 billion, and three pivotal Phase 3 readouts are expected by the end of 2026. TIVDAK generated $131 million in sales for 2024, with $38 million in Q4, and is recognized as the global standard of care in advanced cervical cancer. Approvals in Japan and Europe are anticipated in 2025.
EPKINLY and TIVDAK account for 34% of the company’s projected revenue growth in 2025, and their sales are a major component of the recurring revenues, which represent 95% of total projected revenue. The commercialized medicines segment as a whole contributed 29% of Genmab’s (NASDAQ:GMAB) revenue growth for 2024.
2. Heico Corporation (NYSE:HEI)
Number of Hedge Fund Holders: 67
Upside Potential as of February 19: 56.05%
Heico Corp. (NYSE:HEI) is an aerospace, defense, and electronics company that delivers mission-critical products and services worldwide. Operating through its Flight Support Group and Electronic Technologies Group, it provides everything from aircraft component replacements and repair services to sophisticated electro-optical and electronic solutions. It serves both commercial and government sectors.
The company’s Flight Support Group (FSG) achieved record quarterly net sales of $691.8 million in Q4 2024, which was a 15% year-over-year increase. This surge was fueled by the successful integration of acquisitions, particularly Wencor. Wencor is a company that provides aftermarket parts and repair services for the aerospace industry. Operating income for the FSG jumped by 35% which reflected the heightened demand for commercial aviation products and services, as well as the expansion of its defense sector offerings.
The company’s strategic approach of operating Wencor as a standalone business has proven highly effective and has fostered cooperation and synergy without consolidation. Heico Corp. (NYSE:HEI) is now focused on expanding its market penetration, developing new products and services, and maintaining financial strength. Its emphasis on providing cost-effective solutions to both commercial and government clients positions it for sustained growth and profitability.
1. MicroStrategy Inc. (NASDAQ:MSTR)
Number of Hedge Fund Holders: 44
Upside Potential as of February 19: 66.13%
MicroStrategy Inc. (NASDAQ:MSTR), doing business as Strategy, specializes in AI-powered enterprise analytics software and services. It enables organizations globally to derive actionable insights from their data. Through its MicroStrategy ONE platform and specialized services like MicroStrategy Cloud for Government, it empowers users across many industries and government sectors to make data-driven decisions.
However, the company’s core business revolves around its Bitcoin Treasury Strategy, making it the world’s largest corporate holder of Bitcoin. As of February 2, it held 471,107 Bitcoins, having acquired 258,320 in 2024 alone for $22.1 billion. This accumulation is funded through capital market activities, including equity and debt offerings. Its financial strategy is marked by significant capital raising, including the “21/21 Plan” to secure $42 billion for Bitcoin purchases. It already raised $18.8 billion through equity and $6.2 billion through convertible notes.
Its focus on Bitcoin has led to the development of new KPIs like BTC Gain and BTC Dollar Gain, which showcase the performance of its Bitcoin holdings. In 2024, the BTC Gain was 140,538 Bitcoins, which translated to a $13.1 billion BTC Dollar Gain. Moving forward, MicroStrategy Inc. (NASDAQ:MSTR) targets a minimum 15% BTC Yield and a $10 billion BTC Dollar Gain for 2025.
While we acknowledge the growth potential of MicroStrategy Inc. (NASDAQ:MSTR), our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MSTR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
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