Earnings growth plays a vital role in global markets and equity investments, directly influencing stock prices and overall market performance. Companies with steady earnings growth are often considered more stable and reliable, attracting investor confidence and strengthening market sentiment. According to FactSet, the S&P 500 is expected to report a 9.5% earnings growth for 2024, surpassing the 10-year average annual growth rate.
Looking ahead, 2025 is projected to outperform 2024 in terms of earnings expansion. In a January 14, 2025 interview on Bloomberg’s ‘Open Interest’, Racquel Oden, HSBC’s U.S. Head of International Wealth and Private Banking, forecasted a 14.8% rise in corporate earnings for the year. She expressed optimism about broader market gains, particularly among the “forgotten 493” in the S&P 500—stocks beyond the high-performing “Magnificent 7.” Oden highlighted that technological advancements will enhance productivity, ultimately driving profitability and economic growth.
Similarly, in another Bloomberg interview in early January, Stephanie Guild, Head of Investment Strategy at Robinhood, discussed the challenges posed by elevated yields on valuations. She emphasized that equities are primarily influenced by three factors: market sentiment, valuation, and earnings growth. While high yields create hurdles, the key question remains whether corporate earnings can outpace the pressure from persistent interest rates. She also pointed out that the direction of earnings growth will largely depend on policies introduced by the new administration. In the short term, interest rates will steer market movements, but over the long run, earnings growth will be the main driver. Guild also highlighted mid-cap stocks as an attractive investment due to their favorable valuations.
Further reinforcing this outlook, FactSet’s February 14 report revealed that eight sectors have reported year-over-year revenue growth for Q4, with the IT sector leading the gains. Conversely, three sectors, led by Industrials and Materials, have shown a decline in revenue. This trend suggests a solid close to 2024 earnings. For 2025, FactSet analysts estimate a 12.7% year-over-year earnings growth.
With this promising backdrop, let’s explore the 15 tech stocks expected to achieve the strongest earnings growth in 2025.
A close-up of an investor pointing to a chart featured on a projector, conveying a message of growth.
Our Methodology
To determine the 15 technology stocks with the best earnings growth in 2025, we began by analyzing all U.S.-listed tech companies with a market capitalization of at least $2 billion. To exclude unprofitable companies, we considered only companies that reported a positive net profit margin over the trailing twelve months period. From this refined list, we further narrowed our selection to those expected to achieve greater than 25% EPS growth this year. Regarding next financial year (FY), for firms with more than six months remaining in their fiscal year, we used FY 2025 earnings estimates, while for those with six months or less left, we relied on FY 2026 estimates. Additionally, we considered only stocks with a projected upside of more than 10%. Finally, we ranked the companies in ascending order based on their expected earnings growth for next financial year (FY). We also included data on hedge fund holdings in these companies as of Q4 2024 to provide further insight into investor interest.
Note: All pricing data is as of market close on February 21.
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).
15 Tech Stocks with Best Earnings Growth in 2025
15. Western Digital Corp. (NASDAQ:WDC)
Expected EPS Growth Next FY: 25%
Number of Hedge Fund Holders: 85
Western Digital Corp. (NASDAQ:WDC) is a leading developer and manufacturer of data storage devices and solutions. The company’s product lineup encompasses hard disk drives (HDDs), solid-state drives (SSDs), and external storage systems designed for both consumer and enterprise markets. Western Digital’s storage solutions are utilized in a variety of applications, including personal computing, data centers, and cloud storage services, addressing the growing global need for reliable and high-capacity data storage.
Western Digital Corp. (NASDAQ:WDC) anticipates a 23% compound annual growth rate (CAGR) in installed cloud storage from 2024 to 2028, reaching 19.2 zettabytes, as outlined at its recently held Investor Day. Buoyed by the factors outlined in the event, an analyst at Cantor Fitzgerald reiterated his Overweight rating on the shares as he believes the company’s NAND business spin-off could unlock potential value which is not factored in its current valuation. With the separation now complete, the spun-off NAND business, SanDisk Corp. (NASDAQ:SNDKV), has emerged as an independent publicly traded entity.
14. Coherent Corp. (NYSE:COHR)
Expected EPS Growth Next FY: 28%
Number of Hedge Fund Holders: 71
Coherent Corp. (NYSE:COHR) is a developer and manufacturer of engineered materials, networking products, optoelectronic components, and optical and laser systems for the industrial, communications, electronics, and instrumentation markets. The company holds a strong position in the optical communications market, particularly with its innovative solutions for data centers, such as datacom optical transceivers.
On February 5, Coherent Corp. (NYSE:COHR) reported a 27% YoY (+6% QoQ) surge in its Q2 2025 (FY ending June) revenue of $1.43 billion driven by strong growth in AI-related datacom transceivers, telecom revenue, and growth across multiple key industrial end markets. It also witnessed robust improvement in profitability as gross margin expanded by 363 basis points to 38.2% YoY which led to more than tripling of the EPS to $0.95.
The results were highly positive as analysts became more positive on the company and still expect an average upside of around 45% from current levels. After the results, JPMorgan raised its price target from $110 to $120 while maintaining its Overweight rating. The analyst cited Datacom momentum, Telecom recovery, and strong margin execution as key drivers. Other analysts followed suit as Raymond James, Bank of America, B. Riley and Northland all raised their price targets.
