Growth stocks to buy can potentially redefine your portfolio’s performance. Amid a bullish market, savvy investors are pursuing businesses with an unyielding trajectory of top-and-bottom-line expansion. Often at the forefront of innovation, such companies tend to attract those seeking robust long-term capital appreciation.
Moreover, the current bullish phase underscores the potential of these investments. Growth stocks are likely to surge at a robust pace in this buoyant market, and adding them to your investment strategy could be your ticket to sustained financial triumph. With that said, here are seven top growth stocks to buy to add to your portfolios for healthy long-term gains.
Top Growth Stocks to Buy: Baidu (BIDU)
Baidu’s (NASDAQ:BIDU) foray into artificial intelligence (AI), particularly with its Ernie Bot, has elevated its status in the AI realm but also turbocharged its financial performance. Its fourth-quarter (Q4) report is a testament to this notion, with it delivering a comfortable $50 million beat on its top-line posting of $4.92 billion. This uptick, fueled by its advertising sector and innovative AI applications, underscores the company’s adeptness at harnessing AI’s potential to drive growth. Moreover, it beat the $3.08 non-GAAP EPADS forecast by 58 cents, highlighting its strategic prowess in navigating the economic downturn in China with resilience.
Looking ahead, Baidu’s CFO Rong Luo sets an ambitious tone for 2024, targeting $20.34 billion in revenue, representing a stellar 8.76% year-over-year (YOY) increase. This projection reflects confidence in the company’s operational efficiencies and underscores the delicate balance the company aims to strike between its AI investments and overall growth. Moreover, as Baidu navigates this path, its efforts to blend AI innovation with financial prudence could set a benchmark for tech companies globally.
Netflix (NFLX)
Netflix (NASDAQ:NFLX) remains a dominant player in the global streaming landscape and continues to be unassailable, a position that is expected to continue in the foreseeable future. It has consistently outperformed earnings estimates in three out of the last four quarters. The strategic pivot to restructure management and introducing an ad-supported membership tier has started bearing fruit, ushering in a new era of advertising sales growth. With a subscriber base exceeding 260 million worldwide, the new ad tier could be a potential game-changer for Netflix’s revenue model.
The firm’s Q4 report card reveals a strong 13% year-over-year increase in total revenue and subscriber count, along with optimistic, forward-looking guidance. The projection of $9.24 billion in revenue for the first quarter (Q1) of the fiscal year 2024, aiming for a 13% YOY growth and an anticipated operating margin expansion of 520 basis points, paints a promising picture ahead for the streaming giant.
BYD (BYDDF)
BYD (OTCMKTS:BYDDF) has made significant strides in the electric vehicle (EV) market over the past few years, overtaking Tesla (NASDAQ:TSLA) as a top global EV player last year. This achievement is rooted in BYD’s diverse and affordable product lineup, growing exports, and increasing top-line as the company boosts production efficiencies.
Furthermore, it is looking to open up a new factory in Hungary and plans for another in Mexico as it aggressively expands its global footprint. Additionally, the EV juggernaut offers five models across Europe and has introduced eight low-cost cars in the last two years. On top of that, BYD’s position as the world’s second-largest battery maker narrows the gap further with Tesla. This dual capability highlights BYD’s significant long-term potential for expansion and its ambition to lead the EV market in the coming years.
Microsoft (MSFT)
Microsoft (NASDAQ:MSFT) efficiently navigated the AI surge, fortifying its standing through early investments in OpenAI before AI’s ascent to mainstream prominence. Recent endeavors to broaden its AI investment portfolio complement its foresight, underscoring its commitment to an AI-powered future.
Moreover, another major growth segment for the company is Microsoft Cloud, which is emerging as a key growth catalyst. This segment alone reported a remarkable 24% YOY revenue increase in the second quarter (Q2), accounting for more than 50% of Microsoft’s total revenues. Overall, it posted a vigorous 18% YOY growth in sales and an even more striking 33% jump in net income.
Looking ahead, Microsoft sets ambitious goals, aiming for $500 billion in revenue by 2030. Pivotal to its vision is its investment in cloud infrastructure, including developing proprietary AI GPU chips while reducing dependence on external entities.
Mastercard (MA)
Mastercard (NYSE:MA) is a true titan in the fintech space, leveraging its position as a credit and debit card giant to consistently deliver high-profit margins. Moreover, it underscores a broader shift towards electronic payments, a trend promising continued expansion. To put things in perspective, it processed over $9 trillion in payment volume last year. Additionally, the firm is in a position for further penetration on a global scale, with cash transactions still prevalent in developing markets.
Its financial metrics reveal a dynamic picture, with Mastercard reporting a 13% YOY increase in Q4 revenue and an 11% climb in net income. Such growth is propelled by double-digit expansions in key business metrics including gross dollar volume, cross-border volume, and switched transactions. Beyond its financials, Mastercard’s shareholder value proposition remains equally impressive. Mastercard has proven to be a reliable steward of shareholder wealth with a forward dividend yield of 0.56% and a 17.02% five-year growth rate in payouts.
Lennar (LEN)
Lennar (NYSE:LEN) is the second-largest homebuilding entity in the U.S., occupying a leadership position amid a national housing shortage. This shortage has provided Lennar with a golden opportunity to expand its market presence, evidenced by a 13% increase in net new orders, totaling 69,111 last year.
Moreover, its financial health remains excellent, with Q4 results reflecting its strategic positioning, showcasing an 8% YOY revenue increase to $11 billion and a 6% bump in EPS to $4.62. Despite the challenges posed by higher mortgage rates, home deliveries increased by 19% to 23,795 with a backlog of 14,892 homes at the end of Q4.
Additionally, the firm’s investor appeal is further highlighted by its impressive 1.24% yield, an attractive forward P/E ratio of just 11.2 times, and a substantial cash reserve exceeding $6 billion. Hence, Lennar can navigate the housing market’s complexities with considerable aplomb, promising sustainable growth and long-term shareholder value creation.
Spotify (SPOT)
Spotify (NYSE:SPOT) is poised for a transformative leap, posting its first GAAP profit for a full fiscal year, a milestone that will catapult it to unprecedented heights. Despite not turning a profit last year, Spotify showcases formidable operational strength, marking a 15.21% YOY revenue surge to $14.6 billion while achieving a record $743 million in free cash flow (FCF).
Moreover, its monthly active users (MAUs) peaked last year and are projected to exceed 1 billion in the forthcoming years. Its strategic focus on gross margin expansion and the double-digit growth of premium subscriptions across various markets underscore its powerful growth trajectory. Coupled with a healthy liquidity position, boasting approximately $4.38 billion in cash and marketable securities, Spotify has positioned itself as a leading growth stock to buy
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines