In this piece, we will take a look at the 12 best high-growth IT stocks to buy. If you want to skip our overview of the IT sector and the general stock market climate, then you can take a look at the 5 High Growth IT Stocks to Buy.

Technology stocks, undoubtedly, have experienced a stellar performance in 2023. This year marked the mainstream adoption of generative AI, a trend that reignited investor enthusiasm for companies involved in AI-related chips, software, and infrastructure. As we approach the beginning of 2024, the technology market is experiencing significant growth, with the Nasdaq-100 Technology sector showing a robust increase of approximately 53.03% year-to-date, far outpacing the S&P 500 Index's 23.41% gain. Notably, advancements in high-growth areas such as artificial intelligence (AI) and cloud computing have fueled optimism on Wall Street, and this enthusiasm is expected to persist into 2024. Throughout the year, the Street has been closely focused on stocks related to artificial intelligence.

However, according to Wedbush, the market is currently undervaluing the transformative impact and substantial spending surge expected from the aforementioned technology. In a recent note, strategists, led by Dan Ives, predicted a surge in tech stocks in 2024 as companies increase investments in AI and cloud technology. Wedbush anticipates that spending in these areas will surpass budgets allocated to the broader IT sector. The analyst stated that:

Of course, even hedge funds couldn't keep themselves away from the tech opportunity either. During the third quarter, Tiger Global Management, a fund closely monitored in the investment sphere, expanded its holdings in NVIDIA Corporation (NASDAQ:NVDA), a key player in artificial intelligence-supported semiconductors, by 77%, as indicated by filings. The fund also increased its position in Alphabet Inc. (NASDAQ:GOOG) by 40%. Additionally, Tiger Global raised its investment in Meta Platforms, Inc. (NASDAQ:META) by 4%, augmented its stake in Microsoft Corporation (NASDAQ:MSFT) by 8%, and grew its Amazon.com, Inc. (NASDAQ:AMZN) holdings by 6.5%. Although hedge funds, including Tiger Global, faced substantial losses in 2022 amid a decline in technology stocks, many fund managers re-entered the sector this year. The upward trajectory of seven major tech stocks, also known as the 'Magnificent Seven', played a pivotal role in the broader stock market's recovery from last year's decline.

As a whole, the IT sector is poised for expansion, driven by a growing number of companies expressing their commitment to engaging in the competition for AI and data analytics. Key industry leaders like Amazon.com, Inc. (NASDAQ:AMZN), Salesforce, Inc. (NYSE:CRM), and NVIDIA Corporation (NASDAQ:NVDA) are notable players making substantial progress in this domain and are positioned to potentially lead the industry in seizing significant opportunities arising from future advancements.

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Our Methodology

For the following list, we compiled a list of IT stocks that recorded a P/E ratio greater than 50. The list of companies was narrowed down further based on the number of hedge funds holding stakes in them according to Insider Monkey’s hedge fund data for the third quarter. The stocks are ranked based on this metric, from the lowest to the highest number of hedge funds holding stakes in them.

12. Globant S.A. (NYSE:GLOB)

P/E Ratio: 67.81

Number of Hedge Fund Holders: 20

Globant S.A. (NYSE:GLOB) is an IT and software development company that is involved in providing information technology services, encompassing application development, testing, infrastructure management, and application maintenance.

On November 17, Globant S.A. (NYSE:GLOB) announced third-quarter results that surpassed expectations. The company reported adjusted earnings of $1.48 per share, exceeding market estimates of $1.47 per share. In addition, its quarterly sales totaled $545.28 million, slightly surpassing estimates of $545.23 million.

By the end of the third quarter of 2023, 20 hedge funds tracked by Insider Monkey held stakes in Globant S.A. (NYSE:GLOB). The largest stakeholder was Ken Griffin's Citadel Investment Group, possessing a $143.13 million stake in the company.

Polen U.S. SMID Company Growth Strategy made the following comment about Globant S.A. (NYSE:GLOB) in its Q3 2023 investor letter:

Much like Amazon.com, Inc. (NASDAQ:AMZN), Salesforce, Inc. (NYSE:CRM), and NVIDIA Corporation (NASDAQ:NVDA), Globant S.A. (NYSE:GLOB) is a high growth IT stock that is poised for decent returns.

11. Palantir Technologies Inc. (NYSE:PLTR)

P/E Ratio: 281.30

Number of Hedge Fund Holders: 31

Palantir Technologies Inc. (NYSE:PLTR) is a software company specializing in the development of data fusion platforms, facilitating both machine-assisted and human-driven data analysis. The company's product platform includes Palantir Gotham, Palantir Apollo, and Palantir Foundry.

In the third quarter, Palantir Technologies Inc. (NYSE:PLTR) exceeded expectations, reporting an adjusted EPS of $0.07, surpassing estimates by $0.01. The revenue for the period grew by approximately 16.8% year over year, reaching $558 million, surpassing estimates by $2.08 million. Looking ahead to the fourth quarter, Palantir Technologies Inc. (NYSE:PLTR) projects revenue in the range of $599 million to $603 million, exceeding the consensus estimate of $599.26 million.

By the end of the third quarter of 2023, 31 hedge funds tracked by Insider Monkey held stakes in Palantir Technologies Inc. (NYSE:PLTR). The largest stakeholder was D E Shaw, possessing a $387.84 million stake in the company.

10. The Trade Desk, Inc. (NASDAQ:TTD)

P/E Ratio: 245.30

Number of Hedge Fund Holders: 39

The Trade Desk, Inc. (NASDAQ:TTD) is a multinational technology company headquartered in the United States, specializing in real-time programmatic marketing automation technologies, products, and services. The company is committed to personalizing digital content delivery to users and advocates for Unified ID 2.0 (UID2), an industry-wide protocol designed to maintain relevant advertising while prioritizing user privacy.

In its Q3 2023 earnings report, The Trade Desk, Inc. (NASDAQ:TTD) exceeded expectations with earnings per share of $0.33, surpassing the consensus analyst forecast of $0.29. Adjusted EBITDA experienced a notable 22.6% year-over-year growth, reaching $199.5 million, exceeding the prior guidance of $185 million. Revenues demonstrated a robust 25% year-over-year increase, totaling $493.27 million, surpassing analyst estimates of $486.91 million. Moreover, the company’s customer retention remained consistently high, maintaining a level above 95% for the 10th consecutive quarter.

As of September 2023, among the 910 hedge funds surveyed by Insider Monkey, 39 had acquired shares of the company. The largest hedge fund investor is Ken Griffin’s Citadel Investment Group, holding a significant $250.6 million stake in The Trade Desk, Inc. (NASDAQ:TTD).

9. Cadence Design Systems, Inc. (NASDAQ:CDNS)

P/E Ratio: 77.37

Number of Hedge Fund Holders: 58

Cadence Design Systems, Inc. (NASDAQ:CDNS), headquartered in San Jose, California, is a leading player in electronic systems design. Employing its Intelligent System Design? strategy, the company offers a comprehensive suite of computational software, hardware, and IP solutions. Its portfolio includes software, hardware, services, and reusable IC design blocks, customized to address the diverse needs of its clientele.

On November 2, Cadence Design Systems, Inc. (NASDAQ:CDNS) introduced the groundbreaking Cadence? Voltus? InsightAI, the industry's first generative AI technology. This innovation aims to identify the root cause of EM-IR drop violations in the early stages of the design process. Additionally, it selects and implements the most efficient fixes to enhance power, performance, and area (PPA).

As of Q3 2023, shares of Cadence Design Systems, Inc. (NASDAQ:CDNS) were held by 58 prominent hedge funds, with a combined valuation of $2.94 billion. Andreas Halvorsen’s Viking Global emerged as the leading hedge fund shareholder for the quarter.

8. Mercadolibre, Inc. (NASDAQ:MELI)

P/E Ratio: 82.74

Number of Hedge Fund Holders: 76

Established in 1999, Mercadolibre, Inc. (NASDAQ:MELI), headquartered in Buenos Aires, Argentina, stands as the leading e-commerce technology company in Latin America. Operating through its primary platforms, MercadoLibre.com and MercadoPago.com, the company provides solutions for individuals and businesses engaged in online buying, selling, advertising, and payment transactions.

On November 2, Wedbush analyst Scott Devitt reaffirmed an ‘Outperform’ rating for Mercadolibre, Inc. (NASDAQ:MELI) shares and maintained a price target of $1500.

As of Q3 2023, Mercadolibre, Inc. (NASDAQ:MELI) shares were held by 76 prominent hedge funds, totaling over $3.38 billion in value, according to data from Insider Monkey on 910 hedge funds. Generation Investment Management emerged as the largest hedge fund shareholder, possessing 480,480 shares valued at $609.19 million.

7. Workday Inc (NASDAQ:WDAY)

P/E Ratio: 1153.55

Number of Hedge Fund Holders: 77

Workday Inc. (NASDAQ:WDAY) specializes in creating enterprise cloud applications tailored for finance and human resources. The company provides applications for financial management, human capital management, and analytics, catering to a diverse range of organizations, including companies, educational institutions, and government agencies.

For the fiscal third quarter, Workday Inc. (NASDAQ:WDAY) reported adjusted earnings per share of $1.53, a notable increase from the $0.99 reported in the corresponding quarter of the previous year. The company's revenue for the quarter amounted to $1.87 billion, reflecting a 16.7% year-over-year growth. Workday Inc. (NASDAQ:WDAY) also achieved an operating income of $87.9 million, constituting 4.7% of revenue—a positive shift from the previous year's loss of $26.3 million or negative 1.6% of revenues. On an adjusted basis, the figure reached $462.1 million, equivalent to 24.8% of revenues, up from $313.2 million or 19.7%. As of the end of October, the company's subscription revenue backlog stood at a substantial $18.45 billion, reflecting a robust 30.9% increase compared to the same quarter of the previous year.

As of the conclusion of the third quarter of 2023, Insider Monkey's database indicated that 77 hedge funds held stakes in Workday Inc. (NASDAQ:WDAY), with a combined value of $4.85 billion.

6. Intuit Inc. (NASDAQ:INTU)

P/E Ratio: 66.60

Number of Hedge Fund Holders: 86

Intuit Inc. (NASDAQ:INTU) is a U.S.-based business software company with expertise in financial software. It offers a range of financial management and compliance products and services tailored for consumers, small businesses, self-employed individuals, and accounting professionals in the United States, Canada, and internationally. Intuit Inc. (NASDAQ:INTU) operates through four distinct segments: Small Business & Self-Employed, Consumer, Credit Karma, and ProTax.

Intuit Inc. (NASDAQ:INTU) surpassed Wall Street expectations for first-quarter profit and revenue, driven by robust demand for its artificial intelligence-infused products that assist businesses in handling their financial requirements. The company reported revenue of $2.98 billion for the quarter ending on October 31, exceeding analysts' average projections of $2.88 billion. Additionally, Intuit Inc. (NASDAQ:INTU) achieved an adjusted profit of $2.47 per share in the first quarter, surpassing estimates of $1.98 per share.

As of Q3 2023 end, 86 out of the 910 hedge funds surveyed by Insider Monkey had bought the firm’s shares. Intuit Inc. (NASDAQ:INTU)’s largest hedge fund shareholder is Ken Fisher’s Fisher Asset Management as it owns a $1.4 billion stake that comes via 2.4 million shares.

Intuit Inc. (NASDAQ:INTU) joins the ranks of Amazon.com, Inc. (NASDAQ:AMZN), Salesforce, Inc. (NYSE:CRM), and NVIDIA Corporation (NASDAQ:NVDA) as one of the best high growth IT stocks to invest in.

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Disclosure: None. 12 High Growth IT Stocks to Buy is originally published on Insider Monkey.