The market's growth leadership has become abnormally concentrated in a small number of mega-cap technology stocks, leaving investors with fewer obvious opportunities to find rapid earnings growth outside of the AI trade. Ten AI-related stocks currently account for over 40% of the S&P 500's market capitalization, with NVDA, AAPL, and MSFT accounting for approximately 21.7% of the index. That concentration has made non-tech growth stocks more appealing, but also more selective: a company can generate strong revenue growth while struggling to justify its valuation if margins, debt, customer concentration, or capital intensity are all trending in the wrong direction. The opportunity comes from identifying businesses with long-term growth that can support multiples rather than merely riding the broader AI story, something we previously covered in our 10 High Growth Stocks Outside Tech Analysts Are Bullish On article.
The case for looking beyond mega-cap technology is that large tech companies haven't stopped growing. Their valuations already account for much of the predicted AI-driven earnings acceleration, while a number of healthcare, industrial, consumer, finance, and energy companies are growing at rates that may surprise investors.
According to Russell Investments, analysts anticipate the "Magnificent Seven" to increase third-quarter earnings by 20.3% year over year, while the other 493 companies in the S&P 500 are expected to grow by 27.7%. In other words, earnings momentum is broadening beyond the largest tech firms, potentially offering up opportunities for companies outside the AI trade.
The idea is to avoid using "growth" as a single metric. A company that grows revenue at 30% per year could still be a bad investment if it burns cash, relies on a small number of customers, or funds expansion through repeated dilution. Netskope is a good example : the cybersecurity company announced second-quarter fiscal 2027 revenue of $220.5 million, up 29.2% year-over-year, but trailing EBITDA remained negative at $721 million, and the stock traded at about 9x sales. That is, investors are paying a premium for ongoing top-line momentum as they wait for more proof that growth can translate into durable profits. In contrast, a company growing earnings in the high teens or low twenties can be appealing if it has pricing power, recurring revenue, a strong balance sheet, and a clear path to margin improvement.
The issue is that some companies have already been rerated as "AI adjacent," even though their underlying earnings haven't yet justified the premium. That's why the best opportunities are typically identified where growth is still undervalued, rather than where the AI label has already done the majority of the work.
The sector has expanded beyond construction, mining and machinery cycles to include companies that benefit from data-center power needs, grid modernization, automation and infrastructure spending. Caterpillar, for example, reported record second quarter sales of $20.5 billion , up 24% year-over-year, with its Power Generation division up 29% to $3.10 billion on demand for large reciprocating engines and turbines used in data centers. Despite AI taking up a lot of the news in the market, Mario Gabelli's fund has an industrial stock in its second biggest position , highlighting the idea that there can be interesting growth opportunities outside of the tech industry.
Analyst estimates can help identify expectations, but they should not be used in place of company-specific evidence. A stock with a high consensus growth rate and a high valuation may be more exposed to a modest guidance miss than a cheaper company with a less exciting but more consistent growth profile.
So, what are the best high growth stocks outside big tech? We listed 10 Best High Growth Stocks Outside Big Tech here . You can find the top 5 below.
Our Methodology
For this list, we screened for non-tech stocks with a market cap of more than $20 billion that report a 5-year EPS growth rate of at least 25%. We have also mentioned hedge fund ownership numbers for Q2 2026 to provide insight into smart money sentiments around each stock.
Note: A 5-year EPS growth rate is useful for comparing how quickly earnings are expected to compound, though it is not always the most reliable metric as estimates can change sharply with commodity prices, interest rates, clinical trial results, and other macroeconomic conditions.
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 ).
5. Vale S.A. (NYSE: VALE )
EPS Growth Over the Next 5 Years: 46.62%
Hedge Fund Holders: 39
Vale S.A. is one of the world's top iron ore producers, and is growing into copper and nickel through Vale Base Metals. In the second quarter, iron ore production reached 84.3 million tons, the highest since 2018, with copper recording its best second quarter in nine years. Base metals EBITDA increased 79% to $1.29 billion, accounting for three out of every ten dollars of segment EBITDA, while iron ore contributed $3.06 billion. Moreover, in October, Vale sought to establish a Panda bond program in China worth up to 10 billion yuan, which provided roughly half of second-quarter revenue.
That dependence is also a risk. Back in August, Chinese crude steel output declined 3.7% from the previous year, and iron ore prices followed suit. Iron ore costs also rose with the stronger Brazilian real. See how Vale is strengthening its relations with China, including a potential yuan bond .
4. Phillips 66 (NYSE: PSX )
EPS Growth Over the Next 5 Years: 48.40%
Hedge Fund Holders: 69
Phillips 66 operates refineries, midstream pipelines, chemicals, and marketing operations. By mid-September, its shares had risen more than 110% for the year, as the Middle East war reduced global refining capacity and increased margins. The company's third-quarter results, released on October 28, showed how powerful that backdrop had become: adjusted earnings increased to $5.6 billion, or $14.08 per share, from $3.8 billion, or $9.41 per share, in the second quarter.
Revenue and cash generation also improved. Total revenues and other income reached $51.5 billion, with operating cash flow of $7.3 billion. Net debt decreased by 23% sequentially to $12.7 billion from $16.5 billion, and the company returned $2.8 billion to shareholders during the quarter. The results were driven by refinement. Refining adjusted pre-tax income increased from $3.09 billion to $6.06 billion, driven by record Central Corridor processed inputs of 848,000 barrels per day and a 41% distillate yield in the third quarter.
The recent rally is still depends on unusually wide refining margins. BMO warns that even a minor decrease might cause a significant downturn, while Morgan Stanley expects fuel markets to remain tight through mid-2027 but values Phillips 66 at a premium to peers on EV/EBITDA. The shareholder-return program, which aims to return more than half of operating cash flow, will also be more difficult to maintain if crack spreads stabilize. Even so, BMO believes the stock can reach new highs due to its record refining profitability, lower net debt, and ongoing shareholder returns. Read why BMO sees new highs ahead .
3. Reddit, Inc. (NYSE: RDDT )
EPS Growth Over the Next 5 Years: 51.32%
Hedge Fund Holders: 91
Reddit, Inc. runs the community platform where members debate everything from hobbies to finances, and it makes the majority of its money from advertising. The company's second-quarter revenue increased 61% to $805 million, the eighth straight quarter above 60%, with net income of $253 million and adjusted EBITDA of $343 million, representing a 43% margin. At the same time, daily active uniques rose 18% to 130.3 million, weekly actives exceeded half a billion, international revenue grew 84%, and gross margin reached 91.3%.
The weaker spot is the quality of user growth. Logged-in users increased only 7%, while logged-out users, who frequently arrive via search, climbed 27%, and management reported choppy search referral volume late in the quarter. The company's third-quarter projection of $860 million to $870 million suggests a growth rate of 47% to 49%, down from 61%.
Reddit currently trades at 31.32x trailing earnings and 18.87x forward earnings, with analysts forecasting fiscal 2026 EPS of $5.27 and $6.94. The lower forward multiple suggests that the market expects profitability to continue expanding rapidly, though the stock's premium is dependent on Reddit maintaining both user engagement and advertising growth.
Investors will get the next update on those trends when Reddit announces Q3 results after the close on October 29. The Street expects revenue of around $874.8 million and adjusted EPS of $1.33, indicating around 50% revenue growth and 66% earnings growth year-over-year. The key risk to the bull case is user trends, especially as AI search and algorithm changes impact referral traffic. Read whether user trends are the bigger risk here .
2. The Boeing Company (NYSE: BA )
EPS Growth Over the Next 5 Years: 69.75%
Hedge Fund Holders: 90
Boeing is a commercial aircraft manufacturer and a major defense contractor. The company's third-quarter report, released October 27, revealed a revenue increase of 4% to $24.2 billion, with defense revenue increasing 15% to $7.9 billion. Boeing delivered 161 commercial airplanes, the most since 2018, and its overall backlog hit a record $745 billion, including more than 6,300 commercial jets. Despite Justice Department settlement payments reaching roughly $700 million, free cash flow came in at $464 million. Management expects $2 billion in free cash flow in 2026, $3 billion in 2027, and $10 billion in 2029.
Investors were less impressed. The adjusted loss of $0.34 per share exceeded the $0.21 loss projected, and shares plummeted almost 9% premarket to around $171. Boeing now believes it will not significantly raise 737 production above 47 per month until the second half of 2027, when it hopes to reach 52, and that total 737 deliveries will fall short of 500. Valuation reflects the stress. Boeing trades at 18.39x trailing earnings versus 86.75x forward earnings, indicating that the market is pricing in significant earnings collapse rather than near-term recovery. The premium forward multiple offers little space for more execution delays, especially as the commercial airplane business remains loss-making and debt-ridden.
That is also why defense exposure is becoming more relevant in this story; Boeing and Lockheed Martin are both positioned to benefit as the Pentagon advances its contract calendar, as discussed in Boeing and Lockheed Martin Both Cash in on the Pentagon's Contract Calendar .
1. Alnylam Pharmaceuticals, Inc. (NASDAQ: ALNY )
EPS Growth Over the Next 5 Years: 72.24%
Hedge Fund Holders: 64
Alnylam Pharmaceuticals, Inc. develops RNAi therapeutics, and in the second quarter, its medicine Amvuttra became the company's first to top $1 billion in quarterly revenue. Total net product revenue came in around $1.2 billion, a 74% increase, with TTR franchise revenue of $1.03 billion, up 89%. Non-GAAP operating income more than tripled to $318 million, and cash reached $3.3 billion. Management reported that 80% of new patient starts are now first-line, while royalties from Novartis's Leqvio increased 79% to $72 million. Management added stated that demand from patients switching from other medicines has normalized following a successful launch. Meanwhile, gross margin also fell to 75% from 79% due to higher royalties owed to Sanofi.
Investors will now turn to Amvuttra's third-quarter earnings, which are due before the market opens on October 29, for indication that its expansion is sustainable. Consensus expects a revenue of around $1.43 billion, up roughly 14% to 16% year-over-year and 11% sequentially, with Amvuttra's revenue anticipated near $1.15 billion, up almost 68%. The report will also look into whether pipeline progress may mitigate concerns about declining switch-driven demand. In a different vein, positive Phase 1b results for brezosiran in Huntington's disease, released on October 23, gave investors more reason to be optimistic. See whether pipeline growth can restore confidence after the guidance cut here .
While we acknowledge the risk and potential of ALNY as an investment, we believe certain AI infrastructure stocks offer far stronger long-term potential at a much more attractive entry point. If you are looking for an AI stock more promising than ALNY that operates as a critical AI tollboothand stands as the most important company in the world, check out our report about this must-own AI stock .
Click to continue reading and see the expanded list of the 10 Best High Growth Stocks Outside Big Tech .
This article is originally published at Insider Monkey .
