In this article, we will look at the 7 Unstoppable Growth Stocks To Buy Now.
Should You Invest in Growth Stocks with Rate Cuts Around the Corner?
Growth stocks are shares in a company whose earnings and sales are growing faster than other companies and are expected to continue to grow. These stocks rarely pay dividends as management is eager to reinvest earnings to fuel further growth.
However, with higher growth potential comes high risks. Moreover, it is challenging to find hidden growth stocks as they are typically new companies that are constantly seeking the next big innovation. We recently covered the 10 Best Aggressive Growth Stocks to Buy According to Hedge Funds, which talks about various approaches used to identify these stocks. Here’s an excerpt from the piece:
When it comes to identifying growth stocks, there are several approaches that are followed. These depend on the business model and the fundamentals of the firms being analyzed. For instance, for profitable companies with a positive net income, the price to earnings ratio is used. However, a large portion of high growth stocks aren’t profitable as they reinvest their revenue into expanding market share. This leads to high operating costs, and these firms are valued either through the EV/Sales or EV/EBITDA ratios, depending on whether the firm generates a positive operating income or not.
Both the P/E and other ratios tell us the premium that the market is placing over a firm’s ability to generate money. For instance, one of the major semiconductor companies in the world, which ranks 6th on our list of Top 10 Trending AI Stocks on Latest Analyst Ratings and News, had a P/E ratio of 112x by the end of Q1 2018. This was before the age of AI, and its two peers in the chip industry had 37x for the chip stock that’s Wall Street’s AI darling and 19x for the struggling American chip giant that’s also the only leading edge US based chip manufacturer. Safe to say, the 112x P/E foretold the story of times to come, and since Q1 2018, the stock has gained a whopping 1,386%.
The recent slowing down of the macroeconomic environment and the hype of return on investment of artificial intelligence have questioned the viability of investment in growth stocks. Analysts and portfolio managers have variable opinions but they all converge to a single point “diversification”.
On August 15, Ben Snider from Goldman Sachs appeared in a CNBC interview and mentioned that he still prefers growth stocks over value stocks but emphasized on diversified portfolios. He pointed out that the base case is not the economy running into recession, it is quite the opposite as the data suggests. Ben Snider believes that the economy continues to grow and backed his arguments by mentioning the second quarter earnings season growth, the S&P 500 growth, and the Federal Reserve rate cuts. Therefore the base case as per Snider is higher equity prices by the year end.
While elaborating on his statement about growth stocks, Ben Snider pointed out that an environment of slowing but healthy economic growth along with falling interest rates have historically supported growth stocks over value stocks.
Most importantly, Snider emphasized that there is a risk for some extremely large stocks both from a positioning point of view and from their inability to maintain very strong rates of growth. In addition, the AI bubble problem along with very high analyst expectations have priced these stocks to an extremely overvalued situation.
The solution, as presented by Snider, is to adopt a more diversified approach and go for a selection of smaller tech stocks along with other high-growth industries. Some of the major growth industries mentioned during the interview were smaller tech stocks, the healthcare industry, and some other European stocks that are on the verge of cutting-edge innovation.
Let’s now look at the 7 unstoppable growth stocks to buy now.
A technician at a sophisticated computer hardware rig, emphasizing the company’s chip-manufacturing capabilities.
Our Methodology
To compile the list of 7 unstoppable growth stocks to buy now, we used the Finviz stock screener. We set the performance filter to year-to-date +50% gain and sifted through some of the high-growth industries to get a consolidated list of stocks. We then selected the highest gainers that were the most popular among elite hedge funds. The list is ranked in ascending order of the year-to-date performance of stocks.
Why do we care about what hedge funds do? 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).
7 Unstoppable Growth Stocks To Buy Now
7. MicroStrategy Incorporated (NASDAQ:MSTR)
Year-to-date Share Price Gain as of September 11: 89.20%
Number of Hedge Fund Holders: 26
MicroStrategy Incorporated (NASDAQ:MSTR) originally operates in the software technology industry and generates revenue from designing, developing, and selling artificial intelligence-powered business intelligence software solutions.
The company enters into licensing agreements and also offers cloud subscriptions and other related services. MicroStrategy Incorporated (NASDAQ:MSTR) software platforms and services have gained traction due to their ability to turn complex business data into rich, reliable, and actionable information. Its flagship, MicroStrategy ONE AI-powered business intelligence platform is being used by some of the biggest organizations in the world, including Bayer, U.S. Department of State, and Lori.
As a result of increased appreciation of its MicroStrategy ONE, management has shifted its focus towards its cloud offering. The cloud subscription revenue alone increased 21% year-over-year amounting to $24 million in Q2 2024. However, the overall revenue of the company declined 7% during the same time due to the transition from upfront product license revenues to subscription services revenues. Thereby, staying in line with management expectations.
One of the recent key developments for its subscription-based revenue came in on August 8, when the company announced its MicroStrategy ONE for Government availability on Amazon Web Services (AWS). This new marketplace listing will not only strengthen MicroStrategy Incorporated’s (NASDAQ:MSTR) partnership with AWS but will also increase its subscription revenue.
MicroStrategy Incorporated (NASDAQ:MSTR) has a unique way of using its free cash flows, which puts it ahead of its competition. The company began acquiring Bitcoin in 2020 and since then it has gone on to become one of the world’s first bitcoin development companies. As of July 31st, it had 226,500 Bitcoins worth more than $15 billion.
The strategy has worked well for the software specialist as its BTC Yield has reached 12.2% on a year-to-date basis. Management is aiming for a 4% to 8% annual yield for the next three years and plans to leverage it for operational flexibility. MSTR has soared 89.20% on a year-to-date basis, making it one of the unstoppable growth stocks to buy now. It was held by 26 hedge funds in Q2 2024, with total positions worth $442.24 million. Citadel Investment Group is the largest shareholder with a position worth $1.9 billion
Artisan Small Cap Fund stated the following regarding MicroStrategy Incorporated (NASDAQ:MSTR) in its Q2 2024 investor letter:
“Regarding MicroStrategy Incorporated (NASDAQ:MSTR), our decision to avoid this company comes down to a lack of conviction in its franchise characteristics. The stock has worked this year due to a rebound in the price of bitcoin. Since 2020, MicroStrategy has been focused on converting its cash and cash equivalent holdings, as well as issuing debt, to fund the purchase of bitcoin, which now makes up most of the company’s value.”
6. Impinj, Inc. (NASDAQ:PI)
Year-to-date Share Price Gain as of September 11: 108.44%
Number of Hedge Fund Holders: 29
Impinj, Inc. (NASDAQ:PI) is an international technology company that specializes in RAIN RFID (Radio-Frequency Identification) which allows businesses to manage their inventory efficiently. The platform connects and delivers data on all connected items in the inventory. It serves major industries allowing them to track assets and prevent losses.
The company exercises its competitive edge by catering to a range of industries including clothing, luggage, and automotive parts through its technology. Moreover, it has expanded its operations across various geographical regions and now covers almost all major continents.
Impinj, Inc. (NASDAQ:PI) has soared more than 108% on a year-to-date basis and is expected to rise even more. We say this because the PI is joining the S&P SmallCap 600 stocks.
Not only the news regarding its addition is a recent sign of long-term growth prospects for the company, but its Q2 2024 earnings results are also a testimony of continued revenue generation. Impinj, Inc. (NASDAQ:PI) topped management expectations across all three major financial indicators, with revenue of more than $100 million, adjusted EBITDA of more than $25 million, and free cash flow above $40 million.
Both the past and future performance advocate for Impinj, Inc.’s (NASDAQ:PI) inclusion among unstoppable growth stocks to buy now. Over the past 5 years, the company has grown its top line by 18% and levered free cash flow by 44%. Looking ahead at the FQ3, management expects revenue to grow 42% to a range of $91 million to $94 million, with adjusted EBITDA income between $13.8 million and $15.3 million.
PI was held by 29 hedge funds in Q2 2024, with total stakes worth $224.80 million. Citadel Investment Group is the largest shareholder with a position worth $69.8 million.
Wasatch Micro Cap Value Strategy stated the following regarding Impinj, Inc. (NASDAQ:PI) in its first quarter 2024 investor letter:
“Impinj, Inc. (NASDAQ:PI), a pioneer in helping develop the “Internet of Things,” was also a contributor. The company provides an infrastructure by which items in storage or in transit—such as car parts and even shipping containers— communicate over the internet. Impinj deploys wireless inventory management and tracking platforms for customers in retail, manufacturing, health care and other areas. The company also provides tiny radio-frequency identification chips to connect, count and track individual items. Early in 2023, the stock fell due to a slowdown in platform deployments and chip orders. The slowdown occurred because customers had previously obtained extra inventory based on fears of Covid-related supply-chain disruptions. More recently, the stock has rebounded on reports of solid revenues and profitability that have exceeded expectations. Additionally, management has expressed optimism that Impinj’s long-term business opportunities remain intact. While our positive assessment of the company is unchanged, we sold some shares because we’ve learned from experience to trim our position on strength and add on weakness.”
5. Palantir Technologies Inc. (NYSE:PLTR)
Year-to-date Share Price Gain as of September 11: 109.65%
Number of Hedge Fund Holders: 44
Palantir Technologies Inc. (NYSE:PLTR) is a software technology company that enables organizations to conduct big data analytics. The company operates various platforms including Gotham, Foundry, and Apollo.
Each platform plays a critical role in assisting commercial customers and government agencies, especially counterterrorism departments. For instance, Palantir Apollo is a cloud-agnostic platform that coordinates the delivery of new updates and features to ensure the continuity of critical systems. On the other hand, Gotham allows users to trace hidden patterns in large datasets that can be used to make informed decisions.
Palantir Technologies Inc. (NYSE:PLTR) has also emerged as a hidden AI company and is enabling enterprises by providing core components to build and activate custom large language models and other AI integration with organizations. Its Artificial Intelligence Platform is coming out as a competitive advantage. Management has deployed its expertise to capitalize on the $600 billion AI opportunity. During the latest quarter, Q2 2024, management closed 27 deals amounting to more than $10 million.
Moreover, the last quarter also indicated a growing market share of Palantir Technologies Inc. (NYSE:PLTR) across all business segments. It not only grew its US commercial customers by 83% year-over-year but also improved its overall customer count by 41%. The increase in customer count translated directly into revenues growing 27% to $678 million and adjusted EPS growing 80% year-over-year to $0.09, both above analyst expectations.
That’s not it for Palantir Technologies Inc. (NYSE:PLTR). Another good news for its investors recently surfaced when the company qualified for the S&P 500. The stock has remained volatile since it went public in 2020, however, the news of its inclusion in the index vouches for the quality of business and robust growth management has delivered during that time.
It is one of the unstoppable growth stocks to buy now and was held by 44 hedge funds in Q2 2024, with total positions worth $2.55 billion. Renaissance Technologies is the top shareholder, with a position worth more than $1 billion.
Carillon Scout Mid Cap Fund stated the following regarding Palantir Technologies Inc. (NYSE:PLTR) in its first quarter 2024 investor letter:
“The top contributor to return for the quarter was Palantir Technologies Inc. (NYSE:PLTR). Sentiment improved on Palantir after it reported stronger than expected commercial customer revenue and free cash flow. U.S. commercial growth was especially encouraging, as U.S. commercial revenue was up by a large percentage year over year for the fourth quarter and U.S. commercial customer count grew nearly as much. We expect Palantir to become one of the premier artificial intelligence (AI) software providers, built on its Foundry and AIP platforms.”
4. NVIDIA Corporation (NASDAQ:NVDA)
Year-to-date Share Price Gain as of September 11: 124.41%
Number of Hedge Fund Holders: 179
NVIDIA Corporation (NASDAQ:NVDA) is the world’s largest chip designer by market cap and finds itself running the AI industry through its indispensable chips enabling artificial intelligence. While its Graphics Processing Units (GPUs) are powering the AI industry and the data centers, they also play a pivotal role in graphics, networking, and computing.
Its Grace Hopper and Blackwell chips are leading the market, with extremely high demand thereby giving substantial pricing power to the company. To understand the growing demand for its chips, the recent news of Elon Musk buying Colossal, an AI training system is a good example. Colossal is powered by 100,000 H100 GPUs designed by NVIDIA Corporation (NASDAQ:NVDA). In addition, other mega companies developing AI such as Google and Meta use 90,000 and 70,000 GPUs, respectively.
The global competition of developing the best AI model is only benefiting NVIDIA Corporation (NASDAQ:NVDA) as its new chips always find themselves in demand even before they are designed or released for the market.
Financially speaking, FQ2 2025 witnessed 122% revenue growth year-over-year to $30 billion and was well above the outlook of $28 billion. Both Data Center and Gaming performed well for NVIDIA Corporation (NASDAQ:NVDA), Data Center revenue reached $26.3 billion after a record growth of 154% year-over-year, whereas Gaming was up 16% during the same time.
It is also one of the most widely held stocks among hedge funds. In Q2 2024, 179 hedge funds held NVDA, with total stakes worth $53.67 billion. Citadel Investment Group is the largest shareholder with a position worth $18.35 billion.
Ithaka US Growth Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q2 2024 investor letter:
“NVIDIA Corporation (NASDAQ:NVDA) is the market leader in visual computing through the production of high-performance graphics processing units (GPUs). The company targets four large and growing markets: Gaming, Professional Visualization, Data Center, and Automotive. NVIDIA’s products have the potential to lead and disrupt some of the most exciting areas of computing, including: data center acceleration, artificial intelligence (AI), machine learning, and autonomous driving. The reason for the stock’s appreciation in the quarter was twofold: First, the stock benefited from tremendous excitement surrounding the further development of generative AI and the likelihood this would necessitate the purchase of a large number of Nvidia’s products far into the future; Second, Nvidia posted another strong beat[1]and-raise quarter, where the company upped its F2Q25 revenue guidance above Street estimates, showcasing its dominant position in the buildout of today’s accelerated computing infrastructure.”
3. Talen Energy Corporation (NASDAQ:TLN)
Year-to-date Share Price Gain as of September 11: 126.50%
Number of Hedge Fund Holders: N/A
Talen Energy Corporation (NASDAQ:TLN) is a leading power infrastructure company in the United States. It not only sells electricity but also sells the capacity to produce electricity and offers ancillary services, which support the stability and reliability of the electricity grid. It is also powering the AI revolution by providing clean energy to data centers.
The company is unique in terms of its low carbon emission production. Around 53% of the total energy generation of Talen Energy Corporation (NASDAQ:TLN) is carbon-free, indicating its green approach. This is a strong competitive advantage, especially with the recent rise in electricity demand due to AI and Data Center usage. With the increased demand for electricity, the environmental threats of huge-scale generation have become more prominent thus putting green power companies like Talen Energy Corporation (NASDAQ:TLN) at an edge.
It recently co-located a 1-gigawatt AWS data center campus near its Susquehanna nuclear plant. Amazon Web Services (AWS) is planning to set up a large data center in Pennsylvania, which will require 960 MW of power. Talen Energy Corporation (NASDAQ:TLN) will benefit from the data center as its nearby nuclear power plant will supply energy for the center. The $300 million escrowed portion of the Cumulus data center campus was released to the company marking the start of the development of the AWS campus.
Financially speaking the company posted a successful Q2 2024 and also raised its guidance. It generated $376 million in adjusted EBITDA and $165 million in free cash flow. Looking ahead, management expects EBITDA in the range of $720 million to $780 million (previous range $600 – $800 million) and adjusted free cash flow between $245 million and $285 million.
TLN is one of the unstoppable growth stocks to buy now. It has positioned itself to capitalize on the growing demand for clean energy to fuel data centers. The stock has soared 126.50% on a year-to-date basis.
Alluvial Capital Management stated the following regarding Talen Energy Corporation (NASDAQ:TLN) in its Q2 2024 investor letter:
“Talen Energy Corporation (NASDAQ:TLN) has had quite a year, selling off non-core power generation assets, buying back huge quantities of stock, and now listing on the NASDAQ. Talen is one of those too-rare cases where everything goes according to plan. The company is now enjoying a moment in the sun thanks to its ownership of a top-tier producer of reliable, low-carbon energy, the Susquehanna Steam Electric Station. So, what’s next? Talen will continue to sell off its legacy fossil fuel-burning power generation fleet and return excess capital to shareholders through buybacks. I still think the end game for Talen is a sale of the company once its less attractive assets are divested. Susquehanna, the nation’s sixth-largest nuclear facility with 2.5 gigawatts of power production capacity, is just too much of a prize to be held by a company of Talen’s size.”
2. AST SpaceMobile, Inc. (NASDAQ:ASTS)
Year-to-date Share Price Gain as of September 11: 438.35%
Number of Hedge Fund Holders: 15
AST SpaceMobile, Inc. (NASDAQ:ASTS) is another unstoppable growth stock to buy now. The stock has gained more than 438.35% on a year-to-date basis. It was held by 15 hedge funds in Q2 2024, with total stakes worth $67.38 million. Citadel Investment Group is the top shareholder of the company, with a position worth $17.9 million.
The company is engaged in providing a unique internet network that will provide service directly from space. To make this happen it aims to build a constellation of 168 satellites, which will cost around $3 billion.
AST SpaceMobile, Inc. (NASDAQ:ASTS) is leveraging partnerships with other major tech companies to improve its reach. It has entered into strategic partnerships with Verizon, Google, and AT&T that will enable the company to improve its reach. The partnership will add 850 MHz of premium spectrum to its portfolio giving it direct access to 70% of US mobile internet users.
The fortune of the company is dependent on its ability to raise capital to fund its goal. Management has already announced the completion of the first 5 commercial satellites, which are set to launch in September, and another 17 satellites are under construction. It has already received $71 million from a warrant redemption and expects another $84 million. This topped with the existing $285 million in cash reserves ensures a smooth year with progress towards its goal.
Investors have shown confidence in management’s efforts and the stock has gained more than 438 on a year-to-date basis.
1. Summit Therapeutics Inc. (NASDAQ:SMMT)
Year-to-date Share Price Gain as of September 11: 770.08%
Number of Hedge Fund Holders: 17
Summit Therapeutics Inc. (NASDAQ:SMMT) is a leading biotechnology company that develops new medicines for chronic diseases. The company has recently made a game-changing breakthrough as ivonescimab, a lung cancer drug received positive clinical trial results for its cancer experimental therapy.
The results show that ivonescimab is better off than the current standard drug Keytruda from Merck. Ivonescimab is a bispecific antibody, meaning that it can inhibit vascular endothelial growth factor (VEGF) that keeps the tumor from growing again. Investigators found that users of Summit Therapeutics Inc.’s (NASDAQ:SMMT) drug were 49% less likely to have worsened results as compared to the control randomized group that received Keytruda.
The stock of Summit Therapeutics Inc. (NASDAQ:SMMT) has been riding the wave of the breakthrough and has been up 770.08% on a year-to-date basis. Moreover, it was held by 17 hedge funds in Q2 2024, with total positions worth $218.86 million.
The drug is currently in phase 3 of clinical trials after which it will go through the FDA approval process. If all continues to go well, ivonescimab can become the standard care drug for many stage 1 lung cancer patients. The competitor treatment, Keytruda, made $25 billion in sales in 2023 and it won’t be wrong to expect the same results for ivonescimab.
Wall Street is also bullish on the stock. 3 analysts have a strong Buy rating on SMMT with their 12-month median price target of $25 presenting a 10% upside from current levels.
While we acknowledge the potential of Summit Therapeutics Inc. (NASDAQ:SMMT) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for a promising AI stock that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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