Growth stocks feature companies with stock prices that have been increasing steadily over a while. In turn, the stocks are usually purchased by investors who wish to profit from the company’s expected growth.
However, growth stocks have not done well recently. Nonetheless, the biggest reason we can point to is because of increasing inflation. The prices of food and energy are both rising in a widespread manner around the world, and it’s been primarily driven by post-pandemic demand and the Russian invasion of Ukraine. Overall, this rise in inflation is a worldwide trend that you’ll want to monitor closely.
With all of this in mind, many investors are hesitant to invest in growth stocks because of the recent bear market and drop in stock prices. But these opportunities do exist for those who can find them. There is a huge opportunity for investors to purchase excellent growth stocks at a steep discount.
So, let’s dive in and take a closer look at seven growth stocks for you to keep your eye on.
Growth Stocks to Buy: Airbnb (ABNB)
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Airbnb (NASDAQ:ABNB) is a travel and hospitality company. It started as a service that lets people rent their homes out to visitors, but now, they offer more services, including accommodations, tours, activities and more.
The company has changed the way people travel, and it’s no surprise that its model is growing in popularity. It can operate more efficiently than traditional business models by switching from hotels to homes and properties.
Thanks to recent innovations in functionality and the ability to find listings that meet your criteria, Airbnb has become a great tool for recommending other accommodations around the world or staying with hosts via message. In turn, the hosts offer a unique experience for their guests and help secure a profitable business.
Of course, Airbnb faced some setbacks during the pandemic. But the company has bounced back fairly well. It has become a cash flow machine with a very strong asset-light business model. Hence, the future looks bright from a variety of angles.
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Block (NYSE:SQ) has a history of innovation and is one of the few companies that have been able to balance scale and profitability. They are now looking at expanding their services into areas like insurance, loans and investments.
Moreover, payment processors provide a convenient way for businesses to accept payments from customers without having to handle cash or credit cards. They also provide analytics on the transactions and customer behavior. So, businesses can better understand what their customers want and how they use the service.
Additionally, Block has the added advantage of having Jack Dorsey as CEO. He believes in the product so much that he resigned from Twitter to fully concentrate on this company. In turn, Block’s appetite for short-term risk is well-managed compared with the terrifying rise and fall of the cryptocurrency market. The craze of initial coin offerings (ICOs) has brought some potential risks, but investors typically don’t mind so long as their returns are sufficient.
Overall, fintech stocks tumbled on the broader market selloff, but Block has pursued many opportunities and tried to differentiate itself from peers through crypto investments and decentralized finance strategies. And Dorsey is invested in the potential of this emerging space. Thus, because the company has so many aggressive strategies, they are worth pursuing.
Growth Stocks to Buy: Intuitive Surgical (ISRG)
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Robotic-assisted surgery is becoming increasingly popular, with the number of robotic surgeries on the rise.
Robotic-assisted surgery is not a new concept. However, with technological improvements, performing surgeries that were not previously possible has become possible. These advancements have made robotic-assisted surgery an affordable and accessible option for many patients who would otherwise be unable to afford a surgical procedure. Additionally, robotic surgery has also led to increased patient satisfaction rates and reduced hospital stay times.
One of the major companies in the sector is Intuitive Surgical (NASDAQ:ISRG). They have been pioneers of robotic-assisted surgical systems and have seen major success. The company’s biggest product is Da Vinci surgical systems, computer-assisted surgical instruments and robotics.
The da Vinci System consists of an endoscope — a long flexible tube with a camera at one end –, a pair of forceps — or scissors — and two small motorized arms controlled by one or two surgeons. The surgeon uses the endoscope to guide the arms through the patient’s body to remove tumors and other organs.
When the first quarter came to a close, the company had 6,920 of its da Vinci surgical systems installed in hospitals and surgical centers worldwide. This is a major achievement, and no competitor even comes close to the company’s success. And when you add the company’s ancillary services, you have all the workings of a very strong stock.
Upstart Holdings (UPST)
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Cloud-based lending platforms like Upstart (NASDAQ:UPST) provide low-interest loans to those who would otherwise be unable to access them through traditional lenders. This allows people with less than perfect credit scores and bad financial history to access loans they might not otherwise qualify for.
Upstart uses artificial intelligence (AI) to power its lending platform, revolutionizing the industry. You can complete the loan process in minutes, and they can hand out loans quickly. This is a huge advantage over institutions like banks that have been in the lending business for decades. One of the reasons financial institutions are jumping on the AI automation bandwagon is because it can save them time and effort, which ultimately leads to savings in the long run.
The credit scores for people applying to work at Upstart have been lower than the scores of applicants approved through traditional vetting processes, but their delinquency rates and lifetime value (LTV) have remained the same. Financial institutions will likely continue to turn to Upstart because AI-based loan-vetting is an obvious win. The company has already implemented some impressive metrics that give someone an idea of the Upstart’s popularity.
With all of this in mind, though, Upstart should be on your list of growth stocks to buy.
Growth Stocks to Buy: Cloudflare (NET)
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Cloudflare (NYSE:NET) is a company that provides a content delivery network (CDN) and other services to help websites load faster. The company does this by using AI to identify and block DDoS attacks and update its website content in real-time.
Cloudflare is one of the leading companies in the world when it comes to using AI for their business. They have invested heavily in AI tools, including natural language processing and machine learning technologies.
Moreover, everyone is talking about Cloudflare and the incredible opportunities it has in front of it. The addressable market they are targeting, $135 billion by 2024, is tremendous, and the company is innovating better than anyone anticipated. Their recent launches of R2 storage and D1 databases provide unparalleled ease to businesses looking to use Cloudflare as their hosting provider.
Cloudflare has been growing rapidly due to its customer base, and average customer spending is currently rising. They have also seen revenue increase by 54% year-over-year (YOY). Furthermore, the company is in a great position, with more than $1.7 billion in cash and short-term investments on its balance sheet. That allows the company to be very aggressive regarding growth, which has led to its success thus far.
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HubSpot (NYSE:HUBS) is a software company that specializes in marketing automation and is a top growth stock for investors to watch moving forward.
HubSpot’s marketing automation software helps marketers create, measure and optimize the effectiveness of their campaigns. The software makes it easy for marketers to identify the customer segments they want to target, track their progress over time and optimize their marketing strategy.
Moreover, the company is popular among small businesses because of its cost-effective pricing and easy-to-use features. That helps it compete with the big fishes in the industry, such as Salesforce (NYSE:CRM), which targets more high-end clients. In 2024, HubSpot expects cloud computing to rise to 22% of IT spending worldwide from 14% in 2021. Therefore, with the already-massive market that the company serves growing, it’s one of the best growth stocks out there.
Growth Stocks to Buy: SolarEdge Technologies (SEDG)
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SolarEdge Technologies (NASDAQ:SEDG) is a leading manufacturer of solar inverters and other solar energy solutions that enable residential, commercial and utility-scale solar installations.
It was founded in 2006 to address the needs of the rapidly growing global market for renewable energy. The company’s innovative products are designed to make it easy for anyone to generate clean electricity without any upfront costs or major installation headaches.
Overall, SolarEdge Technologies’ mission is to provide its customers with the best value, highest quality products and services that help them realize their renewable energy goals.
With that in mind, due to the growing demand for solar energy, SolarEdge Technologies will continue to do well. One example of current success came when SolarEdge posted record revenue of $655.1 million in the first quarter of 2022, a 62% improvement YOY.
Despite this outstanding growth, however, there is still a long way to go. According to a Grand View Research report, the global photovoltaic (PV) inverter market is expected to grow year over year at a rate of 6.2% from 2022 to 2030. In turn, SolarEdge stands to benefit from this momentum for years to come.
On the publication date, Faizan 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.
Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience in analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions regarding their portfolio.