For long-term investors, ASX growth shares can be the backbone of a portfolio.
The trick is finding businesses with strong and sustainable competitive advantages, expanding markets, and the ability to compound earnings over many years.
On the ASX, a handful of shares tick these boxes and have the potential to deliver strong returns for patient investors. Three of them are named below:
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Life360 Inc. (ASX: 360)
Life360 has carved out a leading position in family safety technology. Its app connects millions of families worldwide, offering features such as location sharing, driving safety, and emergency alerts.
The company's metrics are impressive. Global monthly active users recently hit 88 million, while paying circles climbed to 2.5 million. This underpinned a 36% increase in annualised monthly revenue (AMR) to $416.1 million during the second quarter of 2025.
And with opportunities to expand monetisation, grow internationally, and add new services, Life360 is still in the early stages of what could be a much larger story.
Morgan Stanley is bullish on the company and has an overweight rating and $51.00 price target on its shares.
ResMed Inc. (ASX: RMD)
ResMed is one of the ASX's true global champions. The ASX growth share dominates the sleep disorder treatment market with its CPAP machines, masks, and digital health solutions.
With more than 1 billion people estimated to suffer from sleep apnoea globally, ResMed has a vast addressable market.
It has also demonstrated strong operating leverage. In FY 2025, revenue rose 10% but net profit surged 22%. And margins are expected to keep expanding as it scales, which bodes well for the future.
All in all, this combination of a massive global market, innovation, and proven execution arguably makes ResMed one of the most compelling ASX growth shares for the decade and beyond.
Macquarie is a fan of the company and has an outperform rating and $48.60 price target on its shares.
Xero Ltd (ASX: XRO)
A final ASX growth share to buy and hold could be Xero. It has become a global leader in cloud-based accounting software for small and medium-sized businesses. From its origins in New Zealand, the company has grown to millions of subscribers across multiple markets.
Its growth opportunity remains enormous, with many small businesses worldwide still running on outdated systems or spreadsheets. And recent investments in artificial intelligence, including its Just Ask Xero (JAX) digital assistant, as well as acquisitions, further strengthen its offering and leave it well-placed to grow its share of a market estimated to be 100 million small to medium sized businesses.
Morgan Stanley is also bullish on this one and has an overweight rating and $235.00 price target on its shares.
