Growth stocks reflect firms on track for swift expansion, beating peers and the overall market. Their strategy to reinvest profits drives continued growth, offering investors both near-term upside and long-term capital appreciation.
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One way to identify these stocks is through their past revenue or earnings growth. Today, we have shortlisted stocks whose revenue has grown at a five-year CAGR of more than 5%. Along with this parameter, we have zeroed in on stocks that have received Strong Buy ratings from Wall Street analysts.
Here are this week’s stocks:
Arista Networks (ANET) – Arista Networks provides cloud networking solutions, offering high-performance switches and software for data centers, AI workloads, and enterprise environments. ANET stock’s average price target of $172 implies a 33.78% upside potential from the current level. The company’s revenue has grown at a five-year CAGR of 24.7%.
Importantly, TipRanks AI Analyst expects ANET’s revenue to grow by 27.75%, compared with the Technology sector’s average of 8.5%. Arista Networks’ revenue growth is fueled by strong demand for AI-driven data center networking and cloud infrastructure solutions.
Chipotle Mexican Grill (CMG) – This fast-casual restaurant chain is known for its burritos, bowls, and focus on fresh ingredients. CMG stock’s average price target of $46.63 implies an upside potential of 34.3%. Its revenue increased at a CAGR of 13.59% in the past five years.
According to TipRanks AI Analyst, Chipotle’s revenue is expected to grow by 7.31% in comparison to the Consumer Cyclical sector’s average of 1.52%. Chipotle’s revenue growth is aided by digital sales expansion, new restaurant openings, and menu innovation.
ARM Holdings (ARM) – This semiconductor and software design company creates energy-efficient chip architectures used in most of the world’s mobile and smart devices. ARM stock’s average price target of $186.54 implies an upside potential of 37.14%. The company’s revenue has grown at a five-year CAGR of 14.59%.
The company’s revenue is expected to rise by 24.81%, according to TipRanks AI Analyst. This compares favorably with the Technology sector’s average of 8.5%. The company’s revenue growth is driven by strong adoption of its Arm v9 architecture, rising AI and data center demand, and expanding licensing deals across automotive and cloud markets.
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TipRanks’ Smart Growth Newsletter provides top growth investment ideas on a weekly basis, based on TipRanks’ data and analysis. The newsletter includes macroeconomic, market-wide, and company-specific analysis to help investors understand the trends that may influence their growth investments.
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