In this article, we will discuss the 16 best mid-cap growth stocks to buy now.
50 Basis Point Reduction: Exaggeration or Hidden Benefit?
Recent discussions among financial strategists emphasize the current stock market dynamics, particularly regarding the upcoming US elections. Investors are encouraged to view dips in stocks of some sectors as long-term buying opportunities, as historical trends suggest that 10% corrections can be advantageous entry points.
While recent sell-offs were driven by sector-specific issues rather than broader economic concerns, the long-term outlook remains positive. Despite recession worries, the US economy is stable, with strong consumer performance and corporate profits exceeding expectations. This has contributed to a rebound in the NASDAQ and S&P 500.
Inflation has reportedly dropped to a three-year low of 2.6% in August, marking the lowest rate since March 2021. As inflation continues easing, there has been ongoing speculation that the Fed may begin cutting interest rates, potentially starting with a 25 basis point reduction.
Market analysts, including Gene Goldman and Craig Johnson, anticipate multiple rate cuts due to slowing inflation and economic growth. We discussed this earlier in our article about the 12 Best Small Cap Tech Stocks to Buy. Here’s an excerpt from it:
“Gene Goldman expressed that his base case anticipates 3 rate cuts of 25 basis points each, beginning in September. His belief lies in the slowing inflation, a deceleration in economic growth, and the overall resilience of the economy, which he thinks is not as dire as some reports suggest. Goldman noted that while the labor market showed mixed signals, with both positive and negative data, the market’s expectations for deeper rate cuts may be exaggerated….
Craig Johnson was also of the opinion that a 25 basis point cut is already anticipated by the market, suggesting that a 50 basis point cut could raise concerns among investors. He believes that a series of 25 basis point cuts would align with their perspective. Craig emphasized the importance of staying calm considering that, historically, October has been a strong month for the markets, with gains observed 86% of the time since 1929.”
However, on September 16, Erika Najarian, UBS senior equity research analyst, mentioned that small and mid-cap stocks could potentially benefit from a 50 basis point cut.
Najarian attributes the recent underperformance of financial stocks to market concerns about the implications of potential rate cuts for economic stability, leading investors to question a less favorable economic outlook. She believes some anticipated cuts may already be reflected in money center bank stock prices due to their strong year-to-date performance. A 50 basis point cut could especially benefit mid-cap stocks affected by commercial real estate issues.
She explains that a 50 basis point cut would significantly impact net interest income. Money center banks benefit more from rising rates, while mid-caps are liability-sensitive and may see deposits repriced faster, favoring them if rates are cut aggressively.
The recent Basel III news with lower capital thresholds triggered negative stock reactions, exacerbated by JPMorgan’s comments on reduced investment banking and trading growth targets. Factors included ongoing Basel III discussions since December 2023 influencing pricing, a leading bank suggesting consensus net interest income expectations are too high, casting doubt on other banks, and emerging signs of consumer weakness potentially spreading beyond lower-income segments.
Najarian highlights the challenges analysts face in predicting net interest income due to shifting rate expectations. While higher rates have traditionally benefited bank profitability, potential cuts create uncertainty about financial performance. She points out that banks must choose between cutting rates to remain competitive or maintaining volume, complicating forecasts for net interest income.
As Najarian emphasizes the uncertainty surrounding interest rate cuts and their effects on the financial sector, and investors await clarity from the Fed, we’re bringing you a list of the 16 best mid-cap growth stocks to buy now.
Methodology
We used stock screeners to look for growth stocks trading between $10 billion and $20 billion, our definition of mid-cap stocks. We sorted our screen by market cap and looked through the top 30 stocks that matched our criteria. We then selected 16 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q2 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).
16 Best Mid-Cap Growth Stocks To Buy Now
16. Qorvo Inc. (NASDAQ:QRVO)
Market Capitalization as of September 13: $10.21 billion
Number of Hedge Fund Holders: 37
Qorvo Inc. (NASDAQ:QRVO) is a global technology company created as the result of a merger between TriQuint Semiconductor and RF Micro Devices, now specializing in products for wireless, wired, and power markets. Its products are used in six primary end markets: automotive, consumer, defense and aerospace, industrial and enterprise, infrastructure, and mobile.
Its growth is driven by global megatrends like electrification, connectivity, mobility, sustainability, datafication, and AI — especially as the markets are experiencing multiyear upgrade cycles, including advancements like 5G Advanced, Wi-Fi 6 and 7, DOCSIS 4.0, and Ultra-Wideband.
Resultantly, Qorvo Inc. (NASDAQ:QRVO) recorded a 36.17% year-year-year increase, generating $886.67 million in revenue for the fiscal first quarter of 2025.
In the automotive market, the company in its FQ1 2025 earnings call announced that it will be providing V2X front-end modules (FEMs) for a prominent China-based automotive V2X reference chipset platform. This platform is expected to see significant growth at several automotive OEMs throughout the 2025 calendar year.
Around the same time, it secured a new engagement to supply a switch-mode DC-to-DC charger for a wearable accessory for an Android OEM. It also surpassed 75 million Wi-Fi 6 front-end modules (FEMs) shipped into the Indian Wi-Fi market. Qorvo Inc. (NASDAQ:QRVO) repurchased $125 million of its stock at $101 per share in the quarter.
The company is actively managing its expenses and capital allocation while focusing on long-term growth through strategic investments and share repurchases, making it well-positioned for future success.
Vulcan Value Partners stated the following regarding Qorvo, Inc. (NASDAQ:QRVO) in its Q2 2024 investor letter:
“Qorvo, Inc. (NASDAQ:QRVO) is a leader in radio frequency (RF) systems and power management solutions for mobile devices, wireless infrastructure, aerospace and defense, the Internet of Things, and various other applications. Qorvo’s chipsets are a small cost but are critical components in modern mobile devices. As data needs increase and telecommunications technology continues to evolve and become more complex, more RF content is needed in each device. The complexity and barriers to entry intensify as content requirements increase and space constraints become more pronounced. Qorvo operates in an oligopoly with only a small number of companies capable of producing these increasingly complex chipsets at scale. Qorvo should also benefit as growth accelerates in adjacent markets and these markets eventually become a larger piece of the business through the adoption of the Internet of Things, satellite, Wi-Fi, and other markets. The company has faced headwinds over the past few years including lower demand in China, excess inventory in the channel, and factory underutilization; but secular tailwinds should drive growth and, in turn, margin expansion.”
15. SS&C Technologies Holdings Inc. (NASDAQ:SSNC)
Market Capitalization as of September 13: $18.34 billion
Number of Hedge Fund Holders: 41
SS&C Technologies Holdings Inc. (NASDAQ:SSNC) is a multinational holding company that sells software and software as a service to the global financial services industry. Its solutions are meant to help clients manage their investments, trading, accounting, and regulatory compliance needs, in many financial institutions, including hedge funds, private equity firms, mutual funds, and insurance companies.
In the second quarter of this year, the company bought back 3.7 million shares for $227 million, marking the highest quarterly buyback in its history. The board has approved a new $1 billion stock repurchase program as well.
The revenue in this period was $1.45 billion, exceeding forecasts by $20 million, up 6.53% year-over-year, due to advancements in alternative fund administration and wealth and investment technology. The earnings per share was $1.27. The recurring revenue growth for financial services was 7.7%, which includes all software-enabled services and maintenance revenue.
Acquisitions contributed $4 million and foreign exchange had an impact of $2 million. The growth was also driven by strong performance in alternatives, GIDS, wealth and investment technology, and Intralinks. The GIDS business saw an unexpected boost due to seasonality and accelerated license revenue.
The company’s strong financial stance positions it well for future growth. It is set to leverage its scale and invest strategically in growth opportunities, indicating strong potential for long-term success. This is why it’s one of our top mid-cap stocks to buy now.
Giverny Capital Asset Management stated the following regarding SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) in its fourth quarter 2023 investor letter:
“It’s a bit like two neighbors, both young and with excellent incomes. If one diligently saves a good portion of their income, dollar cost averages regularly into the stock market, pays a little extra on the mortgage every month and avoids credit card debt, while the other dabbles in exotic investments, is on a first-name basis with a local bookie and maxes out credit cards at the holidays, we have a pretty good idea which household will be richer at age 65, no matter who earns more money over their careers.
It’s the same for companies. Earnings power matters, but not more than capital allocation. I thought about this for a while and sold SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) in the third quarter. This is a fine business with a history of making smart acquisitions. But recently the decision to use floating rate debt to finance acquisitions when interest rates were at historical lows has been a costly mistake. SS&C is growing modestly, but its earnings are stagnant because incremental cash flow must be dedicated to higher interest charges.
Selling SS&C and Markel, which were each about 4% of the portfolio, was not easy for me. Both businesses trade for reasonable prices and have good competitive positions. They have strong CEOs who have been in the job for many years. CEO Bill Stone founded SS&C and is a billionaire thanks to his own decisions. Tom Gayner at Markel is a well-regarded stock market investor and a much-admired leader.”
14. United Therapeutics Corporation (NASDAQ:UTHR)
Market Capitalization as of September 13: $15.09 billion
Number of Hedge Fund Holders: 42
United Therapeutics Corporation (NASDAQ:UTHR) is a biotechnology company and public benefit corporation that develops novel, life-extending technologies for patients in the areas of lung disease and organ manufacturing. The focus is to improve the lives of patients with chronic and life-threatening conditions.
The company sees its business as 3 waves of success: First, approved products that are market leaders for the mid-2020s. Second, next-generation products and new indications can be market leaders in the late 2020s. And third, an organ manufacturing business that can transform the treatment of end-stage organ disease.
With this focus, United Therapeutics Corporation (NASDAQ:UTHR) generated $714.90 million in revenue, with a year-over-year improvement of 19.85%. The earnings per share were $5.85. It experienced significant global revenue growth across key products like Tyvaso, Orenitram, Remodulin, and Unituxin.
Tyvaso remains the leading prescribed prostacyclin treatment in the US when combining nebulizer and dry powder inhaler delivery systems. In Q2, Tyvaso generated $398 million in revenue, up 25% from last year. Orenitram reported record revenue at $107 million, up 13% growth, driven by a combination of increased commercial utilization, pricing, and a modest increase in average dose from prior quarter levels. Remodulin revenue was $147 million, up 16% from last year. Unituxin revenue of $47 million was up 18%.
With robust demand and effective pricing strategies, the company is well-positioned for sustained growth and continued success in serving its patients.
13. Monday.Com Ltd. (NASDAQ:MNDY)
Market Capitalization as of September 13: $12.75 billion
Number of Hedge Fund Holders: 43
Monday.Com Ltd. (NASDAQ:MNDY) is a cloud-based platform that allows users to create their own applications and project management software. It offers a visual platform that helps teams of all sizes manage projects, collaborate, and automate workflows, and has a user-friendly interface and the ability to be customized.
The company’s mondayDB platform launched its mondayDB 2.0 version, which is meant to elevate scalability, enabling customers to manage boards with up to 100,000 items and linked items, and dashboards with up to 500,000 items.
AI is integrated across all areas of Monday.Com Ltd. (NASDAQ:MNDY). In mid-2023, the company deployed a third-party GenAI chatbot for managing chat-based customer service tickets, yielding impressive results. The chatbot has resolved around 50% of customer service tickets automatically. This initial success led to an increase in chat ticket volume and reduced the reliance on external support for ticket management.
In the second quarter of 2024, it introduced new GenAI features to the monday platform, including auto-generated action items, threat summaries, and enhanced text extraction capabilities. It also launched a portfolio solution for enterprise work management. The latest product, monday service, is now in beta and is scheduled for full release by the end of 2024.
Revenue was $236.11 million, up 34.40% year-over-year due to the recent pricing update and strong demand for the Work Operating System products.
Monday.Com Ltd. (NASDAQ:MNDY) has made remarkable strides since its NASDAQ debut in 2021, evolving into a comprehensive platform together with the integration of AI features. Its growth potential makes it one of the top mid-cap stocks to buy now.
Next Century Growth Small Cap Strategy stated the following regarding Monday.com Ltd. (NASDAQ:MNDY) in its first quarter 2024 investor letter:
“Monday.com Ltd. (NASDAQ:MNDY) provides a next generation software platform for companies to run many key aspects of their businesses, such as managing project tasks and workflows, product development, and sales CRM (customer relationship management). MNDY has had success selling into small and medium size businesses and is having increasing success further up market. Revenue growth is currently in the 30% range and the company has proven they can operate profitably and generate solid free cash flow.”
12. Guidewire Software Inc. (NYSE:GWRE)
Market Capitalization as of September 13: $14.20 billion
Number of Hedge Fund Holders: 43
Guidewire Software Inc. (NYSE:GWRE) is a global software company that offers an industry platform for property and casualty insurance carriers. Its comprehensive suite of solutions helps insurers manage their entire business lifecycle, from underwriting and policy administration to claims processing and risk management.
In FQ4 2024, the company recorded a revenue of $291.52 million, up 7.99% year-over-year. Subscription and support revenue was up 28% year-over-year, offset by a 6% decline in license revenue, due to the migration of on-premise customers to the cloud. Services revenue was also down 14% year-over-year as the company transitioned more implementation work to its SI (system integrator) partners and minimized reliance on subcontractors.
The ARR was up 14% on the year. Growth was driven by 16 closed cloud deals in this quarter (13 InsuranceSuite cloud deals), and 42 overall for the year (37 InsuranceSuite cloud deals). These results position the company well to achieve its $1 billion ARR target this fiscal year.
Guidewire Software Inc. (NYSE:GWRE) added 4 new customers in FQ4. A super regional personal lines carrier chose the company’s full suite of data products to modernize their core systems for growth, while Argonaut Managed Services selected ClaimCenter (the company’s management system) to consolidate claims systems and enhance operational efficiency.
Over 25,000 professionals from 38 SIs are now collaborating with this company. In FQ4, the number of cloud-certified partner professionals grew 22% year-over-year to 9,500. The Guidewire Marketplace has expanded to include over 215 technology partners.
The strong momentum in customer engagement, evidenced by significant expansions and new wins, positions it for continued growth in the industry.
Parnassus Mid Cap Fund stated the following regarding Guidewire Software, Inc. (NYSE:GWRE) in its Q2 2024 investor letter:
“Guidewire Software, Inc. (NYSE:GWRE), the leading software provider for property and casualty insurers, reported strong fiscal-third-quarter earnings highlighted by accelerating growth in annual recurring revenue and structurally higher profitability. With demand increasing and a broad array of strategic partners to guide implementations and migrations, we see a long runway ahead.”
11. Toast Inc. (NYSE:TOST)
Market Capitalization as of September 13: $14.72 billion
Number of Hedge Fund Holders: 43
Toast Inc. (NYSE:TOST) is a leading restaurant management software platform that offers a range of tools and technologies to help restaurants streamline their operations, from point-of-sale (POS) systems and online ordering to inventory management and employee scheduling.
In Q2, the company set a new record by adding 8,000 net new locations. The company is broadening its Total Addressable Market by targeting important international markets, large enterprise chains, and the food and beverage retail sector.
Revenue for the quarter was $1.24 billion, up 26.99% year-over-year. The earnings per share were $0.04, missing Street estimates by $0.06.
Management announced that Bizoria, a fast-casual concept in Greater Atlanta, switched to Toast Inc. (NYSE:TOST) and increased its revenue by 25% after integrating the POS terminals. Similarly, Canadian quick-serve restaurant Tahini rolled out Toast Inc. (NYSE:TOST) in 42 locations and plans to double it next year, based on a 15% increase in check sizes.
The company added 100 stores to its partnership with Mussels Pretzels, expanding from 300. It is also being deployed with brands like Wet Soils and Barbecue Holdings. It entered grocery and convenience stores, totaling 220,000 locations and $660 billion in US spending, securing 1,000 new customers.
With 2,000 live locations as of Q2, Toast Inc. (NYSE:TOST) is improving its offerings by catering to all stakeholders in the restaurant industry, generating value by facilitating new revenue opportunities and streamlining operations. These elements position the company for growth.
Here is what Baron Opportunity Fund has to say about Toast, Inc. in its Q3 2021 investor letter:
“Toast, Inc. is a cloud-based end-to-end technology platform purpose-built for the restaurant industry. Its platform provides a comprehensive suite of cloud software products and financial technology solutions to its customers to connect front-of-house with back-of-house operations across all customer channels. Toast’s core module is its point-of-sale software solution and requires all customers to use Toast as their payment processor. Customers then have the option to bundle or add-on additional modules across operations, digital ordering and delivery, marketing and loyalty, team management, and back office. Toast today powers 48,000 restaurants within the 860,000 U.S. restaurant industry, largely focusing on small- and medium-sized (“SMB”) restaurant customers (generally fewer than 10 locations but up to 50), with some larger enterprise customers as well. Toast is the clear market leader in SMB restaurant technology with the best product offering and only full, end-to-end platform. We believe that as restaurants continue to invest in technology at an accelerated pace emerging from COVID, Toast will be a big beneficiary given its leading market position and best-in-class product. At less than 6% penetration of U.S. restaurants and 3% penetration of its $15 billion recurring-revenue TAM, Toast has a long runway for growth by signing on additional locations to the platform and increasing the attach rate of its value-add modules. Only 54% of customers today use 4 or more of Toast’s 10-plus modules, each of which provide significant value to the customer and would drive Toast’s recurring revenue stream higher.”
10. Docusign Inc. (NASDAQ:DOCU)
Market Capitalization as of September 13: $11.49 billion
Number of Hedge Fund Holders: 44
Docusign Inc. (NASDAQ:DOCU) provides products for organizations to manage electronic agreements with electronic signatures on different devices, streamlining workflows and reducing paper consumption. Its software is used in industries like legal, real estate, human resources, and finance, with ~1.5 million clients in 180 countries.
The company launched the first version of its Intelligent Agreement Management (IAM) platform in Q2, which is a rather significant release in its history as it has the potential to address the $2 trillion in lost economic value organizations face when managing agreements.
IAM was introduced to small and mid-sized commercial customers in the US, Canada, and Australia, and its training for salesforce teams is a Q3 focus.
In the second quarter of this year, revenue for the company was $736.03 million, recording an improvement of 7.03%. The earnings per share were $0.97. Both metrics beat Street estimates. This strong performance reflects the company’s focus on enhancing product innovation, evolving omnichannel go-to-market strategies, and boosting operational efficiency.
Direct customer growth remained strong, up 12% year-over-year. Large-value customers with over $300,000 in ACV saw modest improvement. Contract Lifecycle Management (CLM) revenue growth exceeded overall growth, while the company strengthened partnerships with Microsoft, SAP, and Salesforce, with co-selling through the Azure Marketplace and Copilot integrations.
Docusign Inc.’s (NASDAQ:DOCU) early results with its new IAM platform are promising, with higher win rates, larger deal sizes, and faster time to close. Customer adoption is increasing month-over-month, and the company is focused on continuously enhancing IAM’s value to more customers. This positions the company for long-term success.
Polen Focus Growth Strategy made the following comment about DocuSign, Inc. (NASDAQ:DOCU) in its Q3 2023 investor letter:
“We eliminated our remaining 1% position in DocuSign, Inc. (NASDAQ:DOCU). While the company remains the leader by a wide margin at the higher end of the digital signature market, it has become clearer to us that its addressable e-signature market is likely significantly smaller than we had believed or will take much longer to develop than we had anticipated. The lower end of the market is highly competitive. We were patient with our very small position. Impressive new management joined from Google and The Trade Desk in hopes of them being able to reinvigorate growth in core e-signature. Still, it does not appear that this is likely anytime soon with new management articulating that the company will need to develop new products to achieve higher levels of e-signature growth despite what we considered to be low penetration rates within existing e-signature products. As such, we used the proceeds of our sale as part of the funding for our Novo position.”
9. Flex Ltd. (NASDAQ:FLEX)
Market Capitalization as of September 13: $11.83 billion
Number of Hedge Fund Holders: 46
Flex Ltd. (NASDAQ:FLEX) is the third-largest global electronics manufacturing services, and second-largest original design manufacturer company by revenue. Services include design, engineering, manufacturing, and supply chain management. It partners with companies across various industries to help them bring their products to market efficiently and cost-effectively.
It extends to Asia, the Americas, and Europe. The company is focusing on the AI sector, with an 80% coverage of the data center requirements for large and hyper-scale customers. It stands out as one of the few AI industrial stocks with global reach and exposure to automotive sectors.
A competitive advantage for the company is its offering of power pods for data centers, which feature lower build costs and shorter lead times. During its FQ1 2025, management highlighted significant advancements in various large programs across its cloud, power, and automotive sectors.
These initiatives resulted in a strong fiscal first quarter, with the company reporting $6.31 billion in revenue, up 2% sequentially, although there was a 13.93% decline year-over-year. Data center and power revenues account for over 25% of the company’s total revenue. The sequential improvement also happened due to a reduction in net inventory by 6% sequentially and 21% year-over-year.
The ongoing AI transition in data centers is driving demand for its cloud and power solutions, positioning the company well for continued growth. As the company remains confident in achieving its full-year guidance and is well-prepared to capitalize on long-term opportunities in the automotive and healthcare sectors, this automatically becomes one of our top mid-cap stocks to buy now.
Artisan Small Cap Fund stated the following regarding Flex Ltd. (NASDAQ:FLEX) in its first quarter 2024 investor letter:
“We initiated new GardenSM positions in Flex Ltd. (NASDAQ:FLEX), On Holding and Onto Innovation during the quarter. Flex provides outsourced electronic manufacturing services to a diverse set of end markets. The company hired a new CEO in 2020, who has been driving a strategic pivot toward manufacturing high-value products in areas such as health care, industrial, automotive and cloud infrastructure. Today, these higher value items account for ~60% of revenues, and we believe they will continue to tick higher. We also believe an improving business mix, along with the reshoring of supply chains, will lead to faster growth and higher margins.”
8. Biomarin Pharmaceutical Inc. (NASDAQ:BMRN)
Market Capitalization as of September 13: $16.16 billion
Number of Hedge Fund Holders: 48
Biomarin Pharmaceutical Inc. (NASDAQ:BMRN) is a biotechnology company focused on developing and commercializing therapies for rare genetic diseases. Its approved medicines treat achondroplasia, severe hemophilia A, and several rare inherited and lysosomal storage diseases, intending to improve the lives of patients with rare genetic disorders through innovative therapies.
This quarter, the company made significant strides in finalizing its updated corporate vision and strategy. Revenue generated was $712.03M, a 19.61% year-over-year improvement, along with an earnings per share value of $0.96.
By the second quarter, a total of 3500 children were recieving the VOXZOGO treatment. VOXZOGO has rapidly expanded globally, especially among families of young children, with a particularly strong uptake in the US, for children under 5. Its revenues were up 62%.
Q2 also saw advancements in programs for hypochondroplasia, idiopathic short stature, Noonan Syndrome, Turner Syndrome, and SHOX deficiency. ROCTAVIAN’s opportunity was also tapped to support long-term revenue growth. The decision on ROCTAVIAN is based on confidence in its therapeutic profile, launch timelines, progress in key markets, and a revised expense profile (aiming to reduce annual expenses to ~$60 million, targeting profitability by the end of 2025).
The company’s strong quarterly results and progress on ROCTAVIAN highlight its commitment to enhancing patient impact and shareholder value.
Parnassus Value Equity Fund stated the following regarding BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) in its first quarter 2024 investor letter:
“We also closed out two positions, BioMarin Pharmaceutical Inc. (NASDAQ:BMRN), to invest in other opportunities with more potential upside. BioMarin’s risk/return profile has become less attractive due to an ill-timed drug launch and increased competition. We sold our profitable position in BioMarin in favor of other higher-conviction positions in the portfolio.”
7. Nutanix Inc. (NASDAQ:NTNX)
Market Capitalization as of September 13: $14.57 billion
Number of Hedge Fund Holders: 48
Nutanix Inc. (NASDAQ:NTNX) is a cloud computing company that sells software for data centers and hybrid multi-cloud deployments, which includes software for virtualization, Kubernetes, database-as-a-service, software-defined networking, security, as well as software-defined storage for file, object, and block storage. The platform is designed to simplify IT operations, reduce costs, and improve agility for organizations of all sizes.
As businesses are prioritizing infrastructure modernization initiatives, the demand for this company’s solutions is increasing, as Nutanix Inc. (NASDAQ:NTNX) looks to adopt hybrid multi-cloud operating models. In the fourth fiscal quarter quarter, it delivered a revenue of $547.95 million, up 10.87% year-over-year. This quarter also saw the highest number of new logos in 3 years.
Strategic partnerships with Cisco, Dell, and NVIDIA enhance market reach and innovation. The Dell XC Plus, the company’s new turnkey HCI appliance, is now available. It also launched innovative products like GPT-in-a-box to streamline GenAI adoption and Nutanix Data Services for Kubernetes (NDK) for consistent data services across environments.
In FQ4, it won a multi-million dollar ACV deal with a North-American based Fortune 100 financial services company. Other key wins include an EMEA-based research provider migrating workloads to the public cloud using its NC2 capability through Azure, and an Asia-based Global 2000 semiconductor provider. The company also gained a top North American university as a new customer for cloud migration.
The company aims to become the leading platform for modern applications and is poised to capitalize on industry disruptions and gain market share moving forward, which is why we count it as one of our top mid-cap stocks to buy now.
Carillon Chartwell Small Cap Value Fund made the following comment about Nutanix, Inc. (NASDAQ:NTNX) in its Q3 2023 investor letter:
“Within the Carillon Chartwell Small Cap Growth Fund, information technology and industrials were the strongest-performing sectors, with strong stock selection leading to alpha generation. The new management team at Nutanix, Inc. (NASDAQ:NTNX) continues to execute well, delivering another positive quarterly earnings surprise. Nutanix’s core hyperconverged infrastructure (HCI) technology continues to gain market share over its competitors.”
6. Dynatrace Inc. (NYSE:DT)
Market Capitalization as of September 13: $15.12 billion
Number of Hedge Fund Holders: 49
Dynatrace Inc. (NYSE:DT) is a global technology company that provides a software observability platform based on AI and automation, helping businesses gain visibility into the performance of their applications and infrastructure, identify and resolve issues quickly, and optimize their IT operations.
Recent industry-wide outages have impacted billions of end users globally, making observability software mandatory in helping organizations minimize impact. The company’s revenue in FQ1 2025 was $399.22 million, up 19.93% from the same quarter of the prior year. ARR grew 20% year-over-year, while subscription revenue increased 21%. It also added 162 new logos to the Dynatrace platform, up 5% from the year-ago quarter.
It excels with its observability platform, using the Grail data store for real-time analytics and AI for quick incident resolution. Its recent innovations, like Site Reliability Guardian, enhance customer value.
The company has supported over 4,000 organizations in their digital transformation efforts. As one of only 8% of public software companies to surpass $1 billion in revenue, it has achieved cumulative revenue exceeding $5 billion and generated over $1 billion in free cash flow in the past 5 years.
As the observability market expands, driven by cloud migration and AI, the company’s end-to-end platform is becoming increasingly essential for organizations seeking visibility and resilience. With a total addressable market of $50 billion, it is well-positioned to capture growth opportunities and drive significant value.
ClearBridge SMID Cap Growth Strategy stated the following regarding Dynatrace, Inc. (NYSE:DT) in its first quarter 2024 investor letter:
“Several of our other IT holdings faced idiosyncratic headwinds during the period, resulting in three of our five worst-performing holdings being from the sector. This included security platform operator Dynatrace, Inc. (NYSE:DT), whose stock price slid despite beating third-quarter earnings estimates as management guided full-year annual recurring revenue lower due to larger and more complex deals taking longer to close.”
5. Okta Inc. (NASDAQ:OKTA)
Market Capitalization as of September 13: $12.58 billion
Number of Hedge Fund Holders: 50
Okta Inc. (NASDAQ:OKTA) is an identity and access management (IAM) company that provides cloud software to help companies manage and secure user authentication into applications, and for developers to build identity controls into applications, websites, web services, and devices. Its products are used in industries like technology, finance, healthcare, and education.
It recently launched some key additions which include Identity Threat Protection with Okta AI, which continuously detects and responds to identity threats, and Identity Security Posture Management for workforce customers. These innovations enhance security and support organizations in managing identity risks effectively.
It’s advancing its security initiatives through the Okta Secure Identity Commitment, a long-term pledge to combat identity attacks. The company made significant progress in implementing new security measures, enhancing its reputation as a trusted partner in identity security.
Okta Inc. (NASDAQ:OKTA) also released enhanced bot detection features in its customer identity cloud, reducing credential stuffing and malicious bot traffic by over 90% for major clients.
The company has a pipeline of new products and features to discuss at an identity event in Las Vegas, scheduled for October 15th to 17th.
Robust demand from large customers and efficient spending are driving record profitability and cash flow for the company despite a challenging macro environment. With a comprehensive identity platform and recent innovations, Okta Inc. (NASDAQ:OKTA) is well-positioned for growth in its industry.
Meridian Growth Fund made the following comment about Okta, Inc. (NASDAQ:OKTA) in its Q3 2023 investor letter:
“Okta, Inc. (NASDAQ:OKTA) is the largest independent identity software company, serving enterprises, small- and medium-sized businesses, universities, non-profits, and government agencies across the globe. Its solutions provide higher-level security authentication services, a business-critical function that has the attention of CEOs and IT leaders everywhere. The company’s integration with 7,000 other software vendors and system providers is a competitive advantage that enables rapid and seamless implementations. Okta’s complete product suite allows customers to deploy an enterprise-wide identity platform that serves both the workforce segment (clients’ employees) and the customer segments (clients’ customers). The stock has started to recover after falling nearly 85% from post-COVID bubble levels due to a stabilization in the overall macro environment for security services. The company has also seen a normalization in salesforce attrition which had hampered growth. The stock moved higher during the quarter when it reported higher than expected revenues and a much-improved adjusted operating margin of 11% versus -3% in the prior year quarter. Beyond its core capabilities, which are in high demand, we are also encouraged by the company’s ability to expand into product adjacencies such as privileged access management and identity governance. Due to these improving fundamentals, we added to our position in the company during the period.”
4. Jabil Inc. (NYSE:JBL)
Market Capitalization as of September 13: $12.01 billion
Number of Hedge Fund Holders: 51
Jabil Inc. (NYSE:JBL) is a global manufacturing company involved in the design, engineering, and manufacturing of electronic circuit board assemblies and systems, along with supply chain services, primarily serving original equipment manufacturers, and helping several industries bring their products to market efficiently and cost-effectively.
In FQ3 2024, the company repurchased 3.7 million of its shares for about $500 million, leaving approximately $700 million remaining from its $2.5 billion share repurchase authorization in late May.
The company’s revenue declined 20.18% year-over-year in the same quarter, and came to $6.77 billion. This was still higher than estimates by $235.38 million. DMS segment revenue was down approximately 23%, driven by the mobility divestiture. EMS revenue was down roughly 18%, driven by lower revenue in end markets like 5G, renewable energy and digital print, offset slightly by good growth in cloud.
The healthcare sector is experiencing softness in medical devices, which may impact short-term revenue. However, this decline is offset by strong performance in connected devices and AI data centers, with other markets meeting expectations. It plans to benefit from the world’s increasing demand for AI data center infrastructure, healthcare, pharma solutions, and automated warehousing.
Jabil Inc. (NYSE:JBL) is well-positioned for future growth, having successfully navigated a dynamic environment while achieving significant revenue milestones. The company remains focused on strategic investments, including a commitment to share repurchases, and is positioned to deliver value to shareholders while addressing evolving market demands.
Artisan Mid Cap Fund stated the following regarding Jabil Inc. (NYSE:JBL) in its fourth quarter 2023 investor letter:
“Along with DexCom, notable adds in the quarter included Quanta Services and Jabil Inc. (NYSE:JBL). Jabil provides outsourced manufacturing services to a diverse set of end markets and customers. For two decades, Jabil focused on manufacturing to customer-specified blueprints, which inherently carried low margins (2%–3%), a problem further exacerbated by Asian competition. However, in 2017, Jabil commenced a strategic pivot to focus on manufacturing high-growth, low-volume and high-value products in areas such as health care, industrial, automotive, cloud and 5G infrastructure. We believe moving away from more cyclical consumer electronics markets toward secular growth areas, such as EVs and medical devices, will lead to both faster growth and higher margins. Like other electronic components providers, Jabil saw slowing demand late in the year and lowered its fiscal 2024 outlook as a result. However, consistent with our thesis that Jabil has shifted its business mix toward more profitable, higher growth end markets, the company’s earnings and cash flow outlook remains relatively strong despite the cyclical pressures. Furthermore, the company sold its smartphone manufacturing business late in the quarter, which removes a low-growth, low-margin legacy exposure, further shifting its business mix in the right direction. We used the stock’s underperformance to increase our GardenSM position ahead of what we expect to be a compelling profit cycle once the current macro headwinds abate.”
3. Sarepta Therapeutics Inc. (NASDAQ:SRPT)
Market Capitalization as of September 13: $11.89 billion
Number of Hedge Fund Holders: 55
Sarepta Therapeutics Inc. (NASDAQ:SRPT) is a commercial-stage biopharmaceutical company, focused on helping patients through the discovery and development of ribonucleic acid (RNA)-targeted therapeutics, gene therapy, and other genetic therapeutic modalities for the treatment of rare diseases, to advance the field of gene therapy and provide meaningful treatments for patients with rare genetic disorders.
The company focuses on two key treatments for Duchenne muscular dystrophy: Elevidys and phosphorodiamidate morpholino oligomer (PMO) therapies. As one of the few companies developing proprietary exon-skipping technology, it is positioned to expand its valuation by addressing other diseases as well. If Elevidys maintains strong sales and PMO continues to broaden treatment options, the company could experience significant growth.
In June, it obtained approval to make ELEVIDYS available to over 80% of patients living with and dying from Duchenne muscular dystrophy in the US. In the same month, its partner, Roche, announced that the European Medicines Agency had accepted the ELEVIDYS submission for review.
In the second quarter of 2024, it generated $362.93 million in revenue, which recorded a 38.93% year-over-year growth. The earnings per share came out exactly as Street estimates, with a value of $0.07. Net product revenues for ELEVIDYS remain at ~$122 million for the quarter. Net product revenues for the PMO franchise were ~$239 million.
Sarepta Therapeutics Inc. (NASDAQ:SRPT) is poised for significant growth, having successfully launched multiple therapies and achieved cash flow positivity. It has grown at a compound annual growth rate of 150% since 2017. The company is set to expand its market reach and drive revenue growth, making it a top mid-cap stock to buy now.
Bronte Capital Amalthea Fund made the following comment about Sarepta Therapeutics, Inc. (NASDAQ:SRPT) in its Q3 2023 investor letter:
“The FDA is widely considered to be the world’s foremost regulator of drug products, with a stringent and rigorous process for evaluating new marketing applications. Disagreements between the FDA and regulators in other developed markets (such as the European Medicines Agency or the Australian Therapeutic Goods Administration (TGA)) are rare, and when they do occur, it is usually because the FDA has taken a more critical view of the applicant’s evidence.
For a drug to be approved in the US, it must meet the statutory requirement of “substantial evidence of effectiveness” under the Federal Food, Drug, and Cosmetic Act. There are essentially three ways to meet this requirement. Normally, the FDA expects the sponsor to succeed in two “adequate and well-controlled studies”. Alternatively, the sponsor can rely on success from a single study if the results from that study are “very persuasive”, or if they are combined with some sort of independent confirmatory evidence. For the most part lobbying from the cohort of patients, the “patient voice”, has played a relatively minor role in the FDA’s decision-making process and the agency has been prepared to make tough but rational decisions when the “substantial evidence” standard is clearly not met.
However, this was not the case in 2016 when the FDA famously overruled its own review team and external advisory committee to approve Sarepta Therapeutics, Inc.’s (NASDAQ:SRPT) controversial drug for Duchenne muscular dystrophy (Exondys 51). At the time, Sarepta had completed a single phase 2 trial in just 12 patients which, per the FDA Commissioner (Robert Califf) himself, had “major flaws” in both its design and conduct. Ellis Unger, director of the Office of Drug Evaluation at the FDA, declared that the drug was a “scientifically elegant placebo”, and that patients and their families were taking on unknown risks for likely non-existent benefits…” (Click here to read the full text)
2. Cyberark Software Ltd. (NASDAQ:CYBR)
Market Capitalization as of September 13: $11.72 billion
Number of Hedge Fund Holders: 55
Cyberark Software Ltd. (NASDAQ:CYBR) is an information security company offering identity management. Its technology is utilized primarily in the financial services, energy, retail, healthcare, and government markets, to help organizations protect their most sensitive assets by managing and controlling access to privileged accounts.
The company remains resilient, benefiting from the rapid growth in machine identities. In Q2 2024, the revenue was $224.71 million, up 27.79% from the same quarter in the prior year, driven by its expanding cloud business and the increasing importance of Privileged Access Management (PAM). It also signed 245 new logos, and approximately half of these new logos landed with 2+ solutions.
Net new subscription ARR was $56 million. Subscription ARR of $677 million grew 50% year-over-year, while the total ARR of $868 million grew 33% year-over-year.
The recent proposed acquisition of Venafi is seen as a strategic move that strengthens its position in machine identity management. Venafi’s machine identity management solutions are complementary to Cyberark Software Ltd. (NASDAQ:CYBR) with no technology overlap.
It launched CORA AI and ITDR, enhancing its identity security platform with AI-driven threat detection and response capabilities. These innovations aim to streamline user interactions and improve security.
It reflects strong financial performance and a robust free cash flow margin. It is well-positioned for continued growth and success in the identity security market.
Next Century Growth Small Cap Strategy stated the following regarding CyberArk Software Ltd. (NASDAQ:CYBR) in its first quarter 2024 investor letter:
“CyberArk Software Ltd. (NASDAQ:CYBR) is a leading identity security platform which helps companies protect against cybersecurity attacks. CYBR specializes in privileged access management (PAM) and has a full suite of products for identity security. As cyber attack sophistication increases, companies of all sizes need to upgrade from legacy solutions such as SSO (single sign on) and MFA (multi-factor authentication), which is leading to a strong demand environment for CYBR’s solutions. Given this end market backdrop, the company is growing revenue >20% and is delivering solid margin expansion.”
1. Insmed Inc. (NASDAQ:INSM)
Market Capitalization as of September 13: $12.83 billion
Number of Hedge Fund Holders: 74
Insmed Inc. (NASDAQ:INSM) is a global biopharmaceutical company on a mission to transform the lives of patients living with serious and rare diseases through innovative therapies. Its products target a range of diseases, including pulmonary arterial hypertension (PAH) and non-tuberculous mycobacteriosis (NTM).
In the second quarter of 2024, Insmed Inc. (NASDAQ:INSM) reported $90.34 million in revenue, up 16.98% year-over-year. However, the loss per share came out at $1.94. The revenue growth was primarily driven by the sales of ARIKAYCE (amikacin liposome inhalation suspension), which is the company’s flagship product for treating refractory Mycobacterium avium complex (MAC) lung disease.
The company is currently engaged in the ongoing Phase 2 study for TPIP in patients with pulmonary arterial hypertension (PAH), which is progressing well, with over 75% of target enrollment completed. Topline results are expected to be reported in the second half of 2025. It is also advancing its development of brensocatib for bronchiectasis and other neutrophil-mediated diseases, with significant positive data reported from recent trials.
CEO Will Lewis emphasized that Q2 2024 marks a pivotal moment for Insmed Inc. (NASDAQ:INSM) as it transitions into a mid-cap biotechnology firm. He expressed confidence in the company’s strategic direction and its potential to address serious unmet medical needs through innovative therapies. It’s one of our top mid-cap stocks to buy and a compelling investment opportunity in the biopharmaceutical sector.
Columbia Acorn Fund stated the following regarding Insmed Incorporated (NASDAQ:INSM) in its Q2 2024 investor letter:
“Insmed Incorporated (NASDAQ:INSM) is a commercial-stage biopharmaceutical company focused primarily on treatments for pulmonary disease. The stock meaningfully outperformed during the quarter following positive Phase III data for its Brensocatib (Brenso) drug in treating non -cystic fibrosis bronchiectasis (NCFB). While the stock has roughly doubled since the beginning of the year, we are maintaining the overweight position as Brenso could be a potential game changer for the company, given a multi-billion-dollar total addressable market and no other approved NCFB therapies on the market.”
While we acknowledge the growth potential of Insmed Inc. (NASDAQ:INSM), our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
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