Most growth stocks haven’t caught up to the wider market’s rapid rise in 2024
Even as the S&P 500 marks new highs, many top growth stocks haven’t seen the same momentum. Since most of the recent market gains come from just a handful of leading stocks, hidden opportunities in growth stocks abound. Some are small-caps, of course, and those represent the best long-term growth stocks as they have more room to run. Others, though, are firmly within the mid or large-cap categories. Still, they remain beaten down by factors outside of their control that have limited bearing on their overall future.
The worst growth stocks, generally, have already been pushed out of the market as the Fed’s interest rate hikes made unprofitable losers with limited prospects an endangered species. These stocks, therefore, have the short-term strength to stay afloat as we navigate whatever comes from today’s questionable economy while offering multi-bagger opportunities.
Crowdstrike Holdings (CRWD)
If there’s any growth stock destined to be part of the next era’s “Magnificent 7” equivalent, Crowdstrike Holdings (NASDAQ:CRWD) might be it. Businesses today face innumerable challenges, including geopolitical conflict, natural disasters, and supply chain shocks. Despite these risks, the vast majority of business owners (small and large) rank cyber threats as the most important global risk they face. Those concerned about cyber threats, data breaches, digital infrastructure destruction, and ransomware attempts rank among the top specific threats.
Crowdstrike, a top cybersecurity stock, is positioned to grow to meet that threat as technology innovation demands more comprehensive security applications. The company already provides its tech to various governments, corporate entities, small businesses, and even school administrators. Better yet, the company’s revenue climbed substantially in each of the preceding five quarters while, critically, its past three quarters mark the first consecutive profitable periods. Though incremental, successive income boosts in an economy like today’s bode well for Crowdstrike as it remains at the forefront of digital security and safety.
Growth Stocks to Buy and Hold: Palantir (PLTR)
Speaking of AI-powered tech stocks marking consecutive profitable periods, it’s impossible to talk about growth stocks to buy and hold forever without mentioning Palantir (NYSE:PLTR). The much-maligned company seems to have finally found its footing after SPAC-mania sent shares surging well beyond reasonable expectations before the stock plummeted in a drastic overreaction to the reverse.
But today, the stock has marked four consecutive profitable periods as a glut of corporate and government contracts validates the company’s position as a leader in data analytics, AI integration, and predictive forecasting. By marking its fourth profitable quarter, Palantir satisfies each of the requirements for S&P 500 inclusion. And, regarding market cap, Palantir is already more valuable than almost 300 companies within the index. If Palantir’s S&P dreams come true in 2024, expect significant momentum to carry the stock as more institutional investors wake up to its long-term potential.
Celsius Holdings (CELH)
If you had to guess the best-performing stock of the past few decades, go with one of the many big-name tech firms or even a Magnificent Seven stock. You wouldn’t pick a consumer-discretionary beverage brand, right? But Monster Beverage (NASDAQ:MNST) is the best-performing stock of the past 25 years, returning a 31% annualized gain since 1998. By comparison, second-place leader Apple (NASDAQ:AAPL) returned “just” 28% annually.
While there’s still some steam left in Monster stock, the “next big thing” in beverage growth stocks is undoubtedly Celsius Holdings (NASDAQ:CELH). Better yet, as you’re reading this, a Bank of America downgrade sent pushed share prices down – representing an ideal entry point as the company consolidates and prepares for the next leg up. That leg up could come from Celsius’ aggressive expansion plans, which include inroads into Canada, the UK, and Ireland. A core concern within the Bank of America report pointed to flatlining market share in the US as the flooded market saturated consumers. But, by opening new growth avenues, Celsius is set to renew its rapid growth trajectory.
Growth Stocks to Buy and Hold: AST SpaceMobile (ASTS)
If you’re looking for the high-risk/high-reward profile, pricing, and volatility that typifies many early-stage growth stocks, AST SpaceMobile (NASDAQ:ASTS) gets top billing in today’s market. The space stock trades within penny stock territory and sells an incredible story – satellite-enabled, 5G cell service globally without needing physical cell tower infrastructure. The company’s concept proved viable last year after it completed the world’s first low-earth satellite 5G cell phone call with standard cell phones. The successful test marked a major milestone and pivot towards productization as the company plans its first commercial roll-out later this year.
Better yet, the company revealed major backers last week, including Google (NASDAQ:GOOG, NASDAQ:GOOGL), Vodafone (NASDAQ:VOD), and AT&T (NYSE:T). The three companies, alongside other backers, are infusing AST SpaceMobile with much-needed cash to fuel its next steps toward marketization.
Of course, early-stage growth stocks tend to dilute existing shareholders in the fight for profitability, and ASTS is no exception. Though the above strategic funding deal (totaling more than $205 million) won’t dilute shareholders, a press release that came on the heels of the funding announcement revealed another $100 million in fundraising – from equity offering. The new equity offering dilutes existing shareholders by nearly 30%, and shares fell drastically on the news. The upside is that, operationally, ASTS’ prospects haven’t changed – they’ve only gotten better. If you’re in it for the long haul, a temporary share drop shouldn’t scare you off. And if you’re looking for growth stocks to buy and hold forever, today’s per-share pricing is a perfect entry point.
Hims & Hers Health (HIMS)
Telehealth companies offering “male enhancement” and hair loss solutions might not strike you as competitive for a running list of top growth stocks to buy and hold forever. But Hims & Hers Health (NYSE:HIMS) is a clear exception as the small-cap healthcare stock expands its offerings to capture emerging weight loss trends. To secure a larger market share and keep customers (patients) moving within a single integrated ecosystem, HIMS recently announced a partnership with Hartford HealthCare in Connecticut. The move takes HIMS out of the digital-only landscape. It lets customers secure in-person referrals for treatment beyond at-home basics like weight loss, drug therapy, and cardiovascular health management.
Right now, the connection only serves Connecticut-based patients and customers. But the company claims to triage tens of thousands of patients daily and will now refer a handful of those eligible to its Hartford partner network. If the move proves sustainable and profitable, expect further expansion from this growth stock into the national sphere.
Growth Stocks to Buy and Hold: Unity Software (U)
Of all the virtual reality and Web3 enthusiasm that came and (seemingly) went, Unity Software (NYSE:U) stands as one of the few growth stocks in that specific sector with staying power, positioning itself to explode as the pendulum swings back towards VR and metaverse market interest. In the meantime, priced well below past highs, now is a great time to accumulate shares in this growth stock.
Unfortunately, Unity is firmly in a “trim the fat” phase, and its recent workforce reduction points to some pain ahead as the company right-sizes itself to meet current market conditions and achieve operational efficiency. The move is just the latest in a multi-step series of “company reset” initiatives led by interim CEO Jim Whitehurst. Whitehurst is well known for turning Delta Air Lines (NYSE:DAL) around in the early-2000s, and he’s well on his way to performing the same feat for the stellar software stock – just be ready for further turbulence as he and the board realize their collective plan to reorient Unity’s trajectory.
Going over growth stocks without mentioning Tesla (NASDAQ:TSLA) is nearly impossible. Despite the company’s current troubles – including flagging EV sales and Elon Musk’s personal power struggles – there’s no doubt that the dominant EV manufacturer is set to keep expanding in the coming years.
Perhaps most important to the company’s core operations, Tesla is embarking on an aggressive path to create an integrated vertical supply chain that isn’t dependent on outside forces. Those forces, including supply chain shocks and geopolitical maneuvering, are why the car market has seen so much volatility in recent years. To combat the trend, Tesla is creating an in-house lithium refinery to reduce the Chinese dependency that many other EV manufacturers face. Likewise, Tesla is cutting out rare earth metals from its batteries, cutting down on logistics complexity while improving its overall environmental impact.
We’ll likely see some further volatility for Tesla; practically speaking, this week’s earnings report is likely to be tough on shareholders. But shorts consistently lost when going against Tesla, and this current downturn is no exception.
On the date of publication, Jeremy Flint held no positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.