Investing in the stock market can be a daunting task, especially when trying to identify the next big winners. One approach is to diversify your portfolio with a low-fee index fund that tracks a broad market index, such as the S&P 500. However, if you’re looking to invest in individual stocks with high growth potential, here are five phenomenal options to consider.
First, there’s Amazon, the e-commerce giant that’s involved in multiple businesses, from cloud computing to shoe retailing. Its cloud computing platform, Amazon Web Services, is a leading player in the industry and has been growing customers by 31% year over year. With its recent forward-looking price-to-earnings ratio of 32, well below its five-year average, the stock seems attractively valued.
Next up is Microsoft, which boasts an impressive array of businesses, including Office productivity software, Azure cloud computing, Xbox gaming, and Windows operating systems. The company is also poised to benefit from the growth of artificial intelligence, having invested billions in OpenAI and incorporating AI into many of its offerings. With its recent forward-looking price-to-earnings ratio of 33, the stock seems reasonably valued.
PayPal is another growth stock to consider, as it’s a major player in the fintech arena. The company recently reported 426 million active customer and merchant accounts and 25 billion annual transactions. With its new management team, strong balance sheet, and leaner operations, PayPal’s prospects are looking up. Its recent forward-looking price-to-earnings ratio of 16 makes it seem undervalued.
Veeva Systems is a lesser-known company that’s grown into a $35 billion market value by offering vital cloud-based services to the life sciences industry. The company’s subscription services revenue is particularly promising, with a 19% year-over-year increase in its second quarter. With its recent forward-looking price-to-earnings ratio of 34, well below its five-year average, the stock seems attractively valued.
Finally, there’s the iShares Semiconductor ETF, which gives you part ownership in 30 stocks of semiconductor specialists. As our modern world becomes increasingly dependent on semiconductors, this ETF has high growth potential. Its top holdings include Nvidia, Broadcom, Advanced Micro Devices, Applied Materials, and Qualcomm.
These five investments have terrific growth potential over the coming years and decades. While there’s no guarantee they’ll soar this year, they’re likely to make investors happy in the long run. As always, it’s essential to do your research and consider your investment goals before making a decision.
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