3 Best Growth Stocks For The Next 5 Years October Edition Forbes

Bonisiwe Shabane

-Dec 2, 2025, 10:39 PM

3 best growth stocks for the next 5 years october edition forbes

Investing in high-growth companies with a long-term perspective is a proven strategy for building wealth, but not all fast-growing companies are created equal. The opportunity lies in identifying stocks poised to capitalize on sustainable trends, with a minimal risk of degrading into obsolescence. The article highlights a small selection of growth stocks that meet these benchmarks. Brazilian aerospace company Embraer (ERJ) produces a fleet of commercial, business and defense jets. It is popular for its single-aisle E175-E2 commercial planes, the C-390 Millennium military transport aircraft and the Phenom 300, a top-seller in the light jet category for the last 12 years. The ERJ stock has climbed more than 125% in the past year, and returned to investment grade credit rating.

Whether Embraer can disrupt the Boeing-Airbus duopoly, because of Boeing’s brutal year and Airbus’ supply-chain snags, is debatable. However, the Brazilian plane maker appears strategically positioned to capitalize on its robust order backlog and strong performance across all of its segments. Embraer’s firm order backlog rose to $22.7 billion in the third quarter of 2024, marking its highest level in the past nine years. This provides visibility for steady cash flow in the years ahead. 2. Rising deliveries despite supply chain constraints

If increasing net worth is on your list of 2025 resolutions, re-evaluating your growth stock portfolio may be the first action item. You can fill the gaps with companies that have proven growth track records and strong outlooks. Seven promising stocks to consider are introduced below. Growth stocks are equity shares likely to outperform their peers and the broader market. Outperformance can happen when a company successfully delivers an innovative solution to a sizable audience. Companies that unlock this growth puzzle tend to keep doing it.

To be clear, past growth performance does not guarantee future success. But it does show a leadership team's ability to see big opportunities, implement solutions and create value. For that reason, my screening criteria for growth stocks includes historic growth metrics and future performance expectations: Much more than breaking news, our diverse reporting digs deeper with unparalleled insights that empower you to make better informed decisions. Become a Forbes member and get unlimited access to cutting-edge strategies, actionable insights, and updated analysis from our network of leading finance experts. Unlock Premium Access — Free For 25 Days.

You might be using an unsupported or outdated browser. To get the best possible experience please use the latest version of Chrome, Firefox, Safari, or Microsoft Edge to view this website. Growth stocks refer to shares of companies that are expected to grow at rates significantly above the average for the stock market as a whole. Over the next five years, analysts predict a median EPS growth rate of 8.5% per year for S&P 500 stocks—the best growth stocks are outpacing this benchmark by a multiple of two to three... Forbes Advisor has identified 10 of the best growth stocks based on recent and expected earnings growth. Companies that grow earnings and sales are generally rewarded with higher share prices.

Our editors are committed to bringing you independent ratings and information. Advertisers do not and cannot influence our ratings. We use data-driven methodologies to evaluate financial products and companies, so all are measured equally. You can read more about our editorial guidelines and the investing methodology for the ratings below. Vita Coco had its initial public offering in 2021. The company sells coconut water, coconut oil and other coconut-related products around the world.

COCO has been seeing exceptional growth. Analysts project that will continue, with earnings per share, or EPS, expected to increase an average of 15.8% in its next fiscal year. Investors are always on the lookout for the next Google, Nvidia or Amazon – game-changers that disrupt industries and deliver substantial returns. To identify the right growth investments it’s essential to focus on sectors with transformative growth potential, as sustainable growth goes beyond rapid expansion. It involves positioning for innovation, resilience to economic cycles, and the ability to navigate constantly-evolving global events. This analysis explores key sectors poised for growth over the next decade, based on emerging technologies, market trends, regulatory changes and investment activity.

A sector is positioned for growth when it demonstrates the following: The sectors mentioned below are likely to experience transformative growth over the next decade. The revenue and growth numbers cited below are from McKinsey. Artificial Intelligence (AI) will drive the growth narrative forward over the next decade. This is reinforced by a decisive shift in U.S. AI policy, with President Trump announcing a $500 billion AI infrastructure project dubbed “Stargate” to build data centers and computing infrastructure for AI development.

The AI market is estimated to top trillion dollars in value by 2030, up from $197 billion in 2023. Consulting firm McKinsey estimates that AI software and services alone could contribute up to $23 trillion in annual economic value by 2040. For perspective, the U.S. GDP was around $29 trillion for the third quarter of 2024. With GDP typically growing at a rate of 2.5-3% annually, AI’s potential to accelerate growth lies in its ability to boost productivity, accelerate product development and shorten innovation cycles. AI will not only stimulate industry expansion but also fuel consumer demand through improved personalization.

“Long-term investing” might be the most misunderstood concept in investing. What does long-term mean? It depends on who you are. For some, anything held longer than 12 months meets the definition, since that’s when the capital gains tax rate drops. Other investors still subscribe to the “one decision stock” idea. In other words, a stock is bought with the idea that you’ll never have to sell it.

And of course, there is an ocean of variations in between. This article will focus on the shorter end of that spectrum. These are companies that in my view represent potentially profitable stocks with a three-year time frame in mind. That allows for a major market decline, but also pays homage to the severe undervaluation that might be attached to these three stocks. I used a combination of valuation, profitability and technical indicators, as is my regimen. In particular I started by screening for stocks selling at less than half the S&P 500’s trailing price-earnings ratio of 27, and at least twice its current dividend yield.

In other words, stocks selling at 13x earnings or below, and a yield of at least 2.3%. I also limited the screen to stocks with at least a $10 million market capitalization. That produced a short list of about 30 stocks listed on U.S. exchanges. I then applied my usual technical analysis to select three with what I felt was the best combination of yield, stability, valuation and long-term price trend. All this was in contemplation of a three-year holding period.

Much more than breaking news, our diverse reporting digs deeper with unparalleled insights that empower you to make better informed decisions. Become a Forbes member and get unlimited access to cutting-edge strategies, actionable insights, and updated analysis from our network of leading finance experts. Unlock Premium Access — Free For 25 Days. Since I first appeared on CNBC decades ago to discuss technology stocks, I have learned: When a company grows faster than investors expect and raises its growth forecast, its stock price usually goes up. That’s what we’re likely to see in 2026 with the AI chip designer Nvidia; another company called Iren, which is a former bitcoin miner turned AI cloud services provider; and quantum computing service provider... Here’s why buying shares of these growth stocks could help your portfolio — and the associated risks:

A growth stock is a share of a company that is expected to grow at a faster rate than the average company in the market. These companies often reinvest their earnings back into the business to fund expansion, so they do not pay dividends. Investors buy growth stocks for their potential for high capital gains, based on the expectation that the company's future earnings will drive a significant increase in share price. Prospects for growth stocks in 2026 are positive due to strong earnings expectations and continued investment in areas like artificial intelligence. Analysts anticipate growth for the broader market and specific sectors, supported by rising AI-related capital expenditures. However, volatility for companies without strong fundamentals remains a risk.

Investing in leading growth stocks can lead to large gains. For more than a decade now, growth stocks have been the driving force behind the market's run higher. As long as the bull market lasts, that trend is likely to continue. Let's look at three brilliant growth stocks you might want to consider buying today and holding for the long haul. Nvidia (NVDA +1.96%) has been the ultimate growth stock, with the company producing crazy revenue growth for a company of its size. Last quarter, it grew its revenue a whopping 62% to $57 billion.

That's up more than 3 times from the $18.1 billion in revenue it generated just two years ago. With artificial intelligence (AI) infrastructure spending continuing to ramp up, the company is one of the best positioned to capture this opportunity. Nvidia's graphics processing units (GPUs) have become the backbone of AI infrastructure, given their robust parallel processing capabilities that can perform many calculations at once. Meanwhile, it's created a wide moat with its CUDA software platform, which has locked in developers through its long-established set of libraries and foundational code that optimize its GPUs for AI workloads. It's tough to say for sure which growth stocks will be winners without a crystal ball. But investors may wish to consider investing in AI data center operator Applied Digital, AI semiconductor provider Broadcom and the pharmaceutical company Eli Lilly.

These three companies have solid prospects for gains in addition to some better-known companies, such as Nvidia and Palantir. Applied Digital, Broadcom and Lilly have the potential to rise in the short and long term. If they beat earnings targets and raise guidance, their share prices will keep rising. If they tap their strong competitive positions to win more market share, they'll see lasting success. These stocks were selected based on their rapid growth, good chance of exceeding expectations, and strong products and management. If a company is growing rapidly now and has a track record of beating expectations, its stock is likely to rise.

3 Best Growth Stocks For The Next 5 Years October Edition Forbes

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