Best Growth Stocks Right Now

Read our Advertiser Disclosure.
Contributor, Benzinga
June 13, 2024

Alphabet (NASDAQ:GOOGL)

Alphabet is a holding company. Internet media giant Google is a wholly owned subsidiary. Google generates 99% of Alphabet revenue, of which more than 85% is from online ads. Google’s other revenue is from sales of apps and content on Google Play and YouTube, as well as cloud service fees and other licensing revenue. Sales of hardware such as Chromebooks, the Pixel smartphone, and smart home products, which include Nest and Google Home, also contribute to other revenue. Alphabet’s moonshot investments are in its other bets segment, where it bets on technology to enhance health (Verily), faster internet access to homes (Google Fiber), self-driving cars (Waymo), and more. Alphabet’s operating margin has been 25%-30%, with Google at 30% and other bets operating at a loss.

$174.85
-2.94[-1.65%]
Last update: 4:50PM (Delayed 15-Minutes)
Get Real Time Here
Open176.110Close175.160
Vol / Avg.19.845M / 27.620MMkt Cap2.161T
Day Range174.880 - 176.74052 Wk Range115.350 - 180.410

Qualcomm (NASDAQ:QCOM)

Qualcomm develops and licenses wireless technology and designs chips for smartphones. The company’s key patents revolve around CDMA and OFDMA technologies, which are standards in wireless communications that are the backbone of all 3G and 4G networks. The firm is a leader in 5G network technology as well. Qualcomm’s IP is licensed by virtually all wireless device makers. The firm is also the world’s largest wireless chip vendor, supplying nearly every premier handset maker with leading-edge processors. Posting a quarterly revenue growth of 64.70% and earnings growth of 139.90%, Qualcomm announced an acquisition of smaller auto parts company Veoneer in order to increase its share of advanced driver assist systems on new vehicles.

$217.40
2.01[0.93%]
Last update: 4:53PM (Delayed 15-Minutes)
Get Real Time Here
Open216.360Close217.810
Vol / Avg.9.979M / 8.500MMkt Cap242.618B
Day Range213.010 - 218.36052 Wk Range104.333 - 217.430

MercadoLibre (NASDAQ:MELI)

MercadoLibre runs the largest e-commerce marketplace in Latin America, connecting a network of more than 140 million active users and 1 million active sellers as of the end of 2021 across an 18-country footprint. The company also operates a host of complementary businesses, with shipping solutions (Mercado Envios), a payment and financing operation (Mercado Pago), advertisements (Mercado Clics), classifieds, and a turnkey e-commerce solution (Mercado Shops) rounding out its arsenal. MercadoLibre generates revenue from final value fees, advertising royalties, payment processing, insertion fees, subscription fees, and interest income from consumer and small-business lending.

$1580.53
-18.81[-1.18%]
Last update: 4:00PM (Delayed 15-Minutes)
Get Real Time Here
Open1.606KClose1.581K
Vol / Avg.250.641K / 367.100KMkt Cap80.129B
Day Range1.573K - 1.617K52 Wk Range1.063K - 1.825K

Shopify (NYSE:SHOP)

Shopify offers an e-commerce platform primarily to small and midsize businesses. The firm has two segments: subscription solutions (43% of fiscal 2018 revenue) and merchant solutions (57% of fiscal 2018 revenue). The subscription solutions segment allows Shopify merchants to conduct e-commerce on a variety of platforms, including the company’s website, physical stores, pop-up stores, kiosks, social networks (Facebook), and Amazon. Merchant solutions are add-on products for the platform that facilitate e-commerce and include Shopify Payments, Shopify Shipping, and Shopify Capital.

$64.70
-0.77[-1.18%]
Last update: 4:54PM (Delayed 15-Minutes)
Get Real Time Here
Open65.600Close64.690
Vol / Avg.9.145M / 10.130MMkt Cap83.360B
Day Range64.130 - 65.79052 Wk Range45.500 - 91.570

PayPal Holdings (NASDAQ:PYPL)

PayPal was spun off from eBay in 2015 and provides electronic payment solutions to merchants and consumers, with a focus on online transactions. The company had 426 million active accounts at the end of 2021, including 34 million merchant accounts. The company also owns Xoom, an international money transfer business, and Venmo, a person-to-person payment platform.

$61.6001
-1.8299[-2.88%]
Last update: 4:54PM (Delayed 15-Minutes)
Get Real Time Here
Open63.120Close61.540
Vol / Avg.11.954M / 11.866MMkt Cap64.437B
Day Range61.520 - 63.62552 Wk Range50.250 - 76.540

Constellation Energy (NASDAQ:CEG)

Constellation Energy Corp offers energy solutions. It provides clean energy and sustainable solutions to homes, businesses, the public sector, community aggregations, and a range of wholesale customers (such as municipalities, cooperatives, and other strategics). The company offers comprehensive energy solutions and a variety of pricing options for electric, natural gas, and renewable energy products for companies of any size.

$219.93
1.80[0.83%]
Last update: 4:00PM (Delayed 15-Minutes)
Get Real Time Here
Open220.310Close219.930
Vol / Avg.2.183M / 2.924MMkt Cap69.330B
Day Range214.120 - 220.36052 Wk Range87.865 - 236.300

Aehr Test Systems (NASDAQ:AEHR)

Aehr Test Systems is engaged in test systems for burning-in and testing logic, optical, and memory integrated circuits. Increased quality and reliability needs of the Automotive and Mobility integrated circuit markets are driving additional test requirements, incremental capacity needs, and new opportunities for the company’s products in package, wafer level, and singulated die/module level test. The company provides production solutions across the product manufacturing flow to improve yield and reliability and has developed and introduced several innovative products, including the ABTSTM and FOX-PTM families of test and burn-in systems and FOX WaferPakTM Aligner, FOX-XP WaferPak Contactor, FOX DiePak Carrier and FOX DiePak Loader.

$13.79
-0.06[-0.43%]
Last update: 4:13PM (Delayed 15-Minutes)
Get Real Time Here
Open13.940Close13.690
Vol / Avg.675.324K / 1.009MMkt Cap398.734M
Day Range13.280 - 14.27052 Wk Range10.190 - 54.100

Etsy (NASDAQ:ETSY)

Etsy operates a top-10 e-commerce marketplace operator in the U.S. and the U.K., with sizable operations in Germany, France, Australia, and Canada. The firm dominates an interesting niche, connecting buyers and sellers through its online market to exchange vintage and craft goods. With $13.5 billion in 2021 consolidated gross merchandise volume, the firm has cemented itself as one of the largest players in a quickly growing space, generating revenue from listing fees, commissions on sold items, advertising services, payment processing, and shipping labels. As of the end of 2021, the firm connected more than 96 million buyers and more than 7.5 million sellers on its marketplace properties: Etsy, Reverb (musical equipment), Elo7 (crafts in Brazil), and Depop (clothing resale).

$60.1474
-3.1226[-4.94%]
Last update: 4:55PM (Delayed 15-Minutes)
Get Real Time Here
Open63.300Close60.140
Vol / Avg.3.517M / 3.316MMkt Cap7.033B
Day Range60.090 - 63.55052 Wk Range56.600 - 102.810

McDonald's (NYSE:MCD)

McDonald’s is the largest restaurant owner-operator in the world, with 2022 system sales of $116 billion across more than 40,000 stores and more than 100 markets. McDonald’s pioneered the franchise model, building its impressive footprint through partnerships with independent restaurant franchisees around the world. The firm earns more than 60% of its revenue from franchise royalty fees and lease payments, with the lion share of the remainder coming from company-operated stores across its three core segments: the United States, internationally operated markets, and international developmental/licensed markets. McDonald’s owned 55% of the real estate and 80% of the buildings in its franchise system as of the end of 2021, offering it leverage in maintaining quality standards and consistency.

$253.71
-0.77[-0.30%]
Last update: 4:29PM (Delayed 15-Minutes)
Get Real Time Here
Open253.590Close253.700
Vol / Avg.3.084M / 3.536MMkt Cap182.844B
Day Range251.180 - 254.74052 Wk Range245.730 - 302.390

e.l.f. Beauty (NYSE:ELF)

e.l.f. Beauty, Inc. and its subsidiaries provide cosmetic and skin care products under the e.l.f. Cosmetics, e.l.f. Skin, Well People and Keys Soulcare brand names worldwide.

$201.50
4.18[2.12%]
Last update: 4:55PM (Delayed 15-Minutes)
Get Real Time Here
Open199.730Close200.440
Vol / Avg.931.636K / 1.583MMkt Cap11.272B
Day Range195.625 - 202.29452 Wk Range88.470 - 221.830

Growth stocks are made up of companies that are set to grow their earnings and revenue by an abundant amount compared to the rest of the market, which also has an impact on the price of each company’s stocks. This group of companies includes some of the world’s most well-known and most prominent firms, such as Netflix, Disney, Amazon, and Meta Platforms. 

Stocks in the growth sector, holistically represented by the iShares Russell Top 200 Growth ETF (IWY), have broadly outperformed the market as IWY has provided investors with lower returns than these stocks. They might have started as value stocks, or they are simply presenting the best potential for investors. Either way, you need to judge their growth potential, review growth opportunities across your portfolio and calculate their growth rate for at least the last 12 months.

Here are the top stocks across all sectors. Remember, you can diversify your growth stocks just like you would diversify the whole of your portfolio.

Quick Look at the Best Growth Stocks:

  • Alphabet
  • Qualcomm
  • MercadoLibre
  • Shopify
  • PayPal
  • Constellation Energy Corp
  • Aehr Test Systems
  • Etsy
  • McDonalds
  • e.l.f. Beauty, Inc.

Overview

Growth versus value is one of the oldest battles on the stock market, a rivalry on par with Yankees/Red Sox or Elon Musk and the SEC. Value investors seek out unheralded companies with excellent balance sheets and price ratios. Value stocks, then, are cheap stocks. But, cheap doesn’t mean “easy to deal with” nor does it mean “will obviously gain value.” The market capitalization and net income of these assets is not guaranteed to always rise or remain high. In fact, market indexes might not be impacted by these assets as much as you think.

On the other hand, investors looking for these stocks aren’t as concerned about fundamentals. In the world of growth, investors don’t bother looking at the P/E ratio half of the time. Growth investors are concerned with growth — how much the company is expanding in terms of revenue, clientele and market capture. While you’re looking into growth, you need to decide how much growth you need, when you plan to exit the position and if that growth is sustainable.

When investing for growth, investors look for stocks that have the potential to dominate a large swath of the market. Companies looking to fill a niche market won’t suffice, nor will companies that seek to return profits to shareholders like banks or consumer staples. Growth companies reinvest their extra profits back into research and development or expansion, so dividend payments are small or nonexistent. Investors in growth companies are looking for one thing only — stock price appreciation.

A buying opportunity, then, is only good for when it clearly matches your intent and cash flow. Wall Street isn’t predictable, but research can help you make better choices.

Best Online Brokers for These Stocks

These stocks are some of the most heavily traded shares on the market, so choose the broker with the best features for your type of trading. If you’re looking for long-term appreciation from the stocks, a commission-free broker works best so you can trim losers and add to winners. If you’re using a broker you understand, it’s much easier to make money, exit bad positions and make snap decisions. In fact, making the right choice is often simpler when you use a broker that’s feeding you good information and educational tools.

Benefits of Growth Stocks

  • Large potential market of customers: One of the reasons Amazon, Google and Netflix grew to such heights was their potential client base — limited only by the strains of the earth’s population. Millions upon millions of people can search on Google, purchase items on Amazon or watch TV and movies on Netflix. The best of these stocks have global potential, so don’t focus on companies that are happy to find their little niche. Think big.
  • Rapid revenue growth: Do growth stocks need growth? You don’t say! Yes, every company wants to grow its revenue but growth stocks do it exponentially. Rapid revenue growth doesn’t mean steady increases of 10% each year. We’re looking for companies doubling their sales every year or 2.
  • Debt load not cumbersome: Most growth-focused companies have no issues packing on the debt, but there are limits. If the debt becomes too much to manage, a high-flying growth stock can quickly plummet.
  • Potential long-term gains: When you invest in growth stocks, you can get into an asset that many people will be praising for decades to come. In the future, you might be shocked by how cheap the stock was when you made your first purchase.

Drawbacks of Growth Stocks

As you look into growth stocks, hoping that they’ll turn into the next Coke or Amazon, you must remember that are some drawbacks inherent in the process. While this shouldn’t put you off in any way, you must assess your appetite for risk while reviewing the biggest problems investors have with growth stocks:

  • More initial investment risk: A growth stock does come with more initial investment risk because the company may or may not pan out in the manner you prefer. At the same time, all investments carry some semblance of risk. You may even choose to buy just a few stocks to test out these assets before investing further.
  • Investors wait for gains or dividends: While you may see gains in the future, it might take some time for you to see those gains or dividends. Yes, you’re not building income now, but you might be banking future income.
  • Difficult to choose stocks: Many investors might believe that choosing growth stocks is easy. Check the news and find companies that are growing. However, businesses are often at different stages of growth, making ti difficult to know if an established company is growing or, perhaps, a smaller company isn’t really going anywhere.
  • Growth stocks can change at any time: A growth stock might be on the move today, but it might be on the way out tomorrow. This is why investors are advised to watch their assets carefully and exit positions that are not benefiting them in the long-term.
  • Growth stocks are not a get-rich-quick-scheme: While certain popular films might lead you to believe that you’ll get rich by finding just one large cap stock before it takes off, that’s often not the case. You want to diversify your portfolio and enjoy the benefits of large cap stocks without putting all your eggs in one basket.
  • Growth stocks take time: Just as you cannot get rich quick, you need to be prepared to wait for quite some time. As growth stocks…grow, they wll show you that they have potential over a long period of time.

Growth Stocks Will Find a Way Into Your Portfolio One Way or Another

Investing in growth stocks is in some ways inevitable. Even if you only purchase Target Date Funds in your 401(k), you’re getting in on the action. Most ETFs and mutual funds are composed of the most successful growth stocks in the market like Amazon, Apple, Google, Microsoft, Netflix and Facebook. But the key for truly successful investors is to find that next great growth stock before its CEO is plastered all over the covers of Forbes and Fortune. By looking at revenue growth numbers and potential market capture, you could find the next Amazon before its share price quintuples.

Remember, some assets can become growth stocks, and you should look out for investments that you want to hold as opposed to selling them off in a swing trade scenario.

Ready to start investing? Check out Benzinga's top picks for the best online brokers for beginners, how to invest in dividend stocks and the best investing books.

Q

What are growth stocks?

A

Growth stocks are shares in companies that are growing and have the potential to continue that growth and increase profitability.

Q

What kind of brokers handle growth stocks?

A

You can find a list of brokers that handle growth stocks on the list above.

Q

Is Shopify a growth stock?

A

Yes, Shopify is considered a growth stock.

About Dan Schmidt

Dan Schmidt is a finance writer passionate about helping readers understand how assets and markets work. He has over six years of writing experience, focused on stocks. His work has been published by Vanguard, Capital One, PenFed Credit Union, MarketBeat, and Fora Financial. Dan lives in Bucks County, PA with his wife and enjoys summers at Citizens Bank Park cheering on the Phillies.