In this article, we will look at the 7 Best Compounder Stocks to Buy Now.
Compounder stocks are getting more attention as investors look for companies that can keep expanding earnings without relying only on valuation gains. For this list, the focus is on companies with double-digit 5-year compounded annual earnings growth, double-digit expected annual earnings growth over the next 5 years, and return on equity above 15%. This screen points to businesses where growth, profitability, and capital efficiency are all working together.
Morgan Stanley Investment Management defines compounders as companies with “high quality, franchise businesses,” ideally built on “recurring revenues.” Janus Henderson makes the earnings side of the case, saying investors should “prioritize earnings growth” and look for companies with “earnings visibility” capable of delivering “quality earnings growth.” MFS adds that the long-term case for quality rests on “disciplined capital allocation, resilient earnings power, and balance sheet strength,” while noting that “Profitability is necessary but not sufficient.” In summary, compounders are not just fast growers. They are companies that can keep reinvesting at attractive rates while protecting margins and returns on capital.
Against this backdrop, compounder stocks deserve a closer look. With that in mind, let’s take a look at the 7 Best Compounder Stocks to Buy Now.
Our Methodology
We used the Finviz screener to identify stocks with double-digit 5-year compounded annual earnings growth, double-digit expected annual earnings growth over the next 5 years, and return on equity above 15%. We then limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. These stocks are also popular among analysts and elite hedge funds.
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. Insider Monkey’s quarterly newsletter strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
7. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
On June 4, 2026, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) CEO C.C. Wei said global chip supply is expected to remain constrained relative to AI-driven demand for years, Bloomberg’s Debby Wu reported. Wei said that even with expanded U.S. manufacturing capacity, TSMC will not be able to fully meet strong customer demand. Wei also reiterated a forecast for sales growth of more than 30% this year and said TSMC staff will receive more than a 30% increase in average bonus payouts this year.
On June 1, 2026, Nvidia (NVDA) announced that Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is using Nvidia accelerated computing and AI to advance semiconductor design and manufacturing. NVIDIA said TSMC is applying its technologies across the semiconductor design and manufacturing lifecycle to improve turnaround time, energy efficiency, yield, and operational productivity in advanced fabs.
Last month, Sony Semiconductor Solutions Corporation and Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) signed a non-binding memorandum of understanding to form a strategic partnership for next-generation image sensors. Under the proposed partnership, Sony and TSMC intend to establish a joint venture, with Sony as the majority and controlling shareholder, to set up development and production lines in Sony’s newly constructed fab in Koshi City, Kumamoto Prefecture. The companies said the partnership will combine Sony’s sensor design expertise with TSMC’s process technology and manufacturing strengths, while also exploring opportunities in physical AI applications such as automotive and robotics.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) manufactures, packages, tests, and sells integrated circuits and other semiconductor devices internationally.
6. Visa Inc. (NYSE:V)
On June 3, 2026, Visa Inc. (NYSE:V) announced a collaboration with Brale to explore stablecoin-based settlement using SBC on the Canton Network. The proof of concept will evaluate how privacy-enabled blockchain infrastructure can support faster, programmable settlement while helping financial institutions and payment companies control the visibility of sensitive settlement transaction data.
On May 29, 2026, Replit announced a partnership with Visa Inc. (NYSE:V), with Visa making an investment in the agentic software creation platform. The companies are working to integrate Visa Intelligent Commerce into Replit’s platform, including payment building blocks within agent-building workflows. Visa and Replit are also exploring how agents built on Replit can join Visa’s Trusted Agent Protocol registry. On May 27, Visa expanded the Visa Commercial Solutions Hub through a new integration with Visa Accounts Receivable Manager, giving eligible issuers built-in access to end-to-end processing intended to “reduce operational friction and accelerate commercial card growth.”
Earlier in May, Truist analyst Matthew Coad raised the firm’s price target on Visa Inc. (NYSE:V) to $371 from $361 and maintained a Buy rating on the shares. Coad raised top-line estimates to reflect stronger expectations for Data Processing and Other Revenue, citing better pricing, demand for marketing-related value-added services ahead of the FIFA World Cup, and the inorganic contribution from Prisma/Newpay.
Visa Inc. (NYSE:V) operates as a payment technology company in the United States and internationally.
While we acknowledge the potential of V to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than V and that has 100x upside potential, check out our report about the cheapest AI stock.
5. Meta Platforms, Inc. (NASDAQ:META)
On June 4, 2026, Meta Platforms, Inc. (NASDAQ:META) announced the launch of Instagram Plus, a new subscription designed to offer additional features across Instagram. Meta said the existing Instagram experience “will always be free,” while Instagram Plus is an “optional upgrade” for users who want more control, deeper insights, and premium features. The subscription includes tools for connecting with others, viewing previews and insights, and customizing the Instagram experience, and is rolling out globally starting June 4.
Meta’s AI development efforts were also in focus after The Financial Times’ Hannah Murphy reported on June 3, 2026, that Mark Zuckerberg had bet on Alexandr Wang, a start-up founder rather than a veteran researcher, to help revive the company’s AI work. The report said Wang has begun to deliver results, including developing Muse Spark, reshaping Meta’s AI operation, and becoming an influential executive inside the company.
On June 2, 2026, Arete analyst Rocco Strauss upgraded Meta Platforms, Inc. (NASDAQ:META) to Buy from Neutral with a price target of $735, up from $614. Strauss cited Meta’s “flexible” cost base, subscription growth, and internal AI progress for the upgrade. Arete said Meta’s high-margin subscription business could help margins recover despite “aggressive” AI data center spending, and said the company could become a “neocloud with excess compute.”
Meta Platforms, Inc. (NASDAQ:META) develops products that help people connect and share across mobile devices, personal computers, virtual reality headsets, and AI glasses through its Family of Apps and Reality Labs segments.
4. Eli Lilly and Company (NYSE:LLY)
Eli Lilly and Company (NYSE:LLY) plans to stop providing 340B discounted drug pricing to certain hospitals that have not complied with claims data reporting requirements introduced on February 1, Fierce Healthcare’s Dave Muoio reported. The move has drawn opposition from hospital groups and calls for federal regulators to intervene. In a June 1 letter to Thomas Engels, administrator of the Health Resources and Services Administration, Lilly said about 70%, or 2,350 distinct entities, have complied with the policy, and that it has sent two rounds of follow-up reminder letters to those that have not.
On June 2, 2026, Eli Lilly and Company (NYSE:LLY) announced presentation details for the European Hematology Association Annual Meeting, taking place June 11-14 in Stockholm, Sweden. Lilly will present results from the Phase 3 BRUIN CLL-322 study of Jaypirca, a non-covalent Bruton tyrosine kinase inhibitor, as part of a time-limited regimen for patients with previously treated chronic lymphocytic leukemia. Lilly also said Ajax Therapeutics and Kelonia Therapeutics, both pending proposed acquisitions, will present data at the meeting. Ajax will share first clinical results from the Phase 1 AJX-101 study of AJ1-11095 in myelofibrosis, while Kelonia will present additional correlative data from the Phase 1 inMMyCAR study of KLN-1010 in relapsed or refractory multiple myeloma.
Eli Lilly and Company (NYSE:LLY) discovers, develops, manufactures, and markets human pharmaceutical products internationally.
3. American Express Company (NYSE:AXP)
On June 4, 2026, American Express Company (NYSE:AXP) and Delta Air Lines introduced new travel benefits for eligible Delta SkyMiles Card Members, refreshed card designs across the full portfolio, and welcome offers for new Card Members. Jon Gantman, Executive Vice President – Cobrand Products & New Product Development at American Express, said the companies added benefits, including rideshare credits and a second checked bag “without increasing annual fees.”
On May 20, 2026, American Express Company (NYSE:AXP) announced a strategic partnership with Fanatics, under which American Express becomes the Official Payments Partner across select Fanatics online and retail locations worldwide and a presenting sponsor at Fanatics Fest. Chief Marketing Officer Elizabeth Rutledge said the partnership combines the American Express Network with Fanatics’ ecosystem of more than 100 million fans and includes the new Fanatics American Express Card.
Earlier in May, Freedom Broker upgraded American Express to Buy from Hold with a price target of $370, up from $325, after the company beat Q1 expectations while keeping its full-year guidance unchanged.
American Express Company (NYSE:AXP) operates as an integrated payments company in the United States and internationally.
2. T-Mobile US, Inc. (NASDAQ:TMUS)
On June 4, 2026, T-Mobile US, Inc. (NASDAQ:TMUS) introduced Dynamic CX, a new AI-powered network optimization capability that helps the network adapt automatically in near real time as demand shifts. Built for large-scale live events and high-density environments, Dynamic CX builds on T-Mobile’s Self-Organizing Network technology, which continuously monitors and optimizes network performance. The company said the capability uses AI to identify potential mass gatherings, prepare the network in advance, and adjust to demand as crowds move, stream, share, and connect.
On May 28, 2026, T-Mobile US, Inc. (NASDAQ:TMUS) and the United States Golf Association announced a multi-year partnership, making T-Mobile the Official 5G Network Partner of the U.S. Women’s Open, U.S. Open, and additional USGA championships. The company said the partnership includes the USGA’s first-ever mobile Rules Review, event connectivity, and exclusive member experiences.
In a regulatory filing, T-Mobile US, Inc. (NASDAQ:TMUS) disclosed that Broadband Chief Andre Almeida bought 5,097 shares of common stock on May 1 in a transaction valued at $1.0M.
T-Mobile US, Inc. (NASDAQ:TMUS) provides wireless communications services in the United States, Puerto Rico, and the United States Virgin Islands.
1. Mastercard Incorporated (NYSE:MA)
On June 2, 2026, Mastercard Incorporated (NYSE:MA) announced several leadership updates. Ling Hai, President of Asia Pacific, Europe, Middle East, and Africa, will become CFO, succeeding Sachin Mehra. Mehra will move into the newly created Chief Business Officer role, overseeing country operations worldwide. Linda Kirkpatrick, President of the Americas, will become Chief Services Officer, while Craig Vosburg will transition to Vice Chair and serve as a global ambassador. Dimi Dosis will become Chief Commercial Payments Officer, Jorn Lambert will continue leading Consumer Payments, Raj Seshadri will become Senior Strategic Advisor to the CEO, and Tim Murphy will retire from Mastercard in October as planned.
On May 27, 2026, Mastercard Transaction Services was granted a BitLicense by the New York State Department of Financial Services. Chief Product Officer Jorn Lambert said “clear regulatory frameworks” are important in building trust as new forms of digital value move toward practical use.
Earlier in May, Morgan Stanley raised the firm’s price target on Mastercard to $679 from $678 and maintained an Overweight rating on the shares. Morgan Stanley said the FY outlook remains unchanged as the Middle East impact and portfolio shifts weigh on high-yield cross-border volume, while underlying trends remain stable and U.S. spending is accelerating, excluding the Capital One migration.
Mastercard Incorporated (NYSE:MA) provides transaction processing and other payment-related products and services in the United States and internationally.
While we acknowledge the potential of MA to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than MA and that has 100x upside potential, check out our report about the cheapest AI stock.
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