10 Best Growth Stocks to Buy Now – Top Stocks for Long-term Growth [May 2022]
10 Best Stocks to Buy Now for Long-Term Growth
Terms such as technology stocks and growth stocks have been synonymous in the past decade. Since the financial crisis of 2008-09, technology stocks have generated exponential gains for investors due to access to cheaper credit, high operating leverage, growing demand for cloud services, and the ongoing pandemic.
Technology companies offer several services such as software development, cloud computing, online streaming, and gaming. They also sell hardware products such as mobile phones, smartwatches, laptops, and personal computers. Basically, any entity that sells a service or product geared towards technology may belong to the tech sector.
Alternatively, growth stocks are enterprises that have the opportunity to expand revenue and earnings at a rate higher than the overall market. A growth company may benefit from a game-changing product it launched allowing it to gain market share or enter new sectors.
Expectedly, companies that grow at a faster pace reward long-term shareholders with market-beating returns. Additionally, it's quite natural for growth stocks to trade at a much higher multiple compared to value stocks.
Keeping these factors in mind, let's take a look at the 10 best tech stocks that can deliver handsome returns to investors in the long term.
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By looking at the growth stock picks below you can see the life changing returns that are possible from investing in the right companies, at the right time and with a long-term time horizon. These are the top Motley Fool growth stock picks over the last 5 years.
|Best Motley Fool Growth Stock Picks||Return||Annualized Return|
|The Trade Desk (TTD)||678%||145%|
|ShockWave Medical (SWAV)||413%||130%|
#1: Apple (AAPL)
Apple is the largest company in the world valued at $2.55 trillion, by market cap. The stock has gained 750% in dividend-adjusted returns in the last 10 years. Apple is a major player in several business segments that include smartphones, wearables, tablets, and laptops.
It continues to expand its suite of products and services as can be seen by the launch of Apple TV+ which is a streaming platform. The tech heavyweight is also rumored to introduce a self-driving car in the near future.
#2: Microsoft (MSFT)
Valued at $2.12 trillion, by market cap, Microsoft stock has surged close to 1,000% in the past decade. Microsoft develops, licenses, and supports software services and solutions all over the world. It is one of the largest players in segments such as public cloud and gaming.
Microsoft recently announced its intention to acquire gaming company Activision Blizzard for $69 billion which should allow it to target potentially trillion-dollar markets such as the metaverse.
#3: Alphabet (GOOGL)
The largest digital advertising platform in the world, Alphabet is valued at $1.51 trillion, by market cap. Its share price has gained over 300% since May 2012, offering investors the perfect mix of growth and stable returns.
Alphabet’s advertising business and the Google Cloud vertical continue to be key catalysts for top-line growth. The company also ended 2021 with a cash balance of $67 billion, providing it with enough room to reinvest in growth, buy back shares or look for highly accretive acquisitions.
#4: Amazon (AMZN)
The final big tech stock on this list is Amazon which leads several segments such as online retail and public cloud. Amazon shares have been on an absolute tear in the last decade gaining over 1,100% in this period.
Despite its massive size, Amazon is forecast to grow sales by 14.7% to $538 billion in 2022 and by 17.3% to $632 billion in 2023. The tech behemoth is a major player in industries such as online streaming and is also the third-largest digital ad platform globally, after Alphabet and Meta.
#5: Nvidia (NVDA)
A semiconductor company, Nvidia has created massive wealth for long-term investors. It is primarily known for manufacturing computing chips used in applications such as gaming and data centers. Nvidia is one of the major players in artificial intelligence (AI) and aims to build a robust portfolio of AI-based supercomputers.
Analysts tracking the stock expect revenue to more than double to $65 billion in the next five years, compared to the $27 billion it reported in fiscal 2022 which ended in January.
#6: Broadcom (AVGO)
Another semiconductor company that makes the list is Broadcom, a stock that is up 2,000% since May 2012. Despite its market-thumping gains, Broadcom offers investors a tasty dividend yield of 2.8%. In fact, due to its diversified business and widening cash flows, Broadcom has increased dividend payouts at an annual rate of 39% in the last 10 years.
In 2021, Broadcom derived 74% of sales from its semiconductor business while the rest came from the software infrastructure segment.
#7: Salesforce.com (CRM)
Valued at $173 billion by market cap, Salesforce.com provides CRM or customer relationship management products to enterprises all around the world. One of the largest SaaS (software-as-a-service) companies globally, Salesforce constituted 24% of global CRM spending, according to a report from IDC. The next four players account for less than 20% of the cumulative market share.
In the last few years, Salesforce has acquired companies such as Slack, Tableau, and MuleSoft, diversifying its revenue base. These acquisitions have expanded the Salesforce ecosystem allowing the company to cross-sell various other services.
#8: Coinbase (COIN)
An ideal bet for investors with a higher risk appetite, Coinbase provides you exposure to the cryptocurrency sector. One of the largest cryptocurrency exchanges, the performance of Coinbase is linked to that of digital assets such as Bitcoin and Ethereum.
For example, due to the bull market of 2021, Coinbase managed to increase revenue by 545% year over year to $7.4 billion last year, on the back of higher trading volumes. Coinbase has close to 90 million users with $278 billion in assets on the platform.
#9: Roku (ROKU)
A company part of the streaming segment, Roku ended 2021 with 60 million active accounts. However, there are a billion connected TVs which suggests Roku has enough room to grow at a steady pace going forward.
A key revenue driver for the company will be its Roku Channel which managed to double viewing hours in 2021 despite the easing of lockdown restrictions. Similar to Netflix and other streaming platforms, Roku is also looking to create original content which should increase its subscriber base.
#10: Upstart (UPST)
The final company on this list is Upstart which provides lending software to banks. Upstart aims to leverage its machine learning and artificial intelligence tools to assess credit risks of individuals for banking partners. In fact, Upstart claims it uses 1,600 variables to assess risk and has been able to approve a higher ratio of loan applications at lower interest rates.
Upstart has partnered with 42 banks and can easily enter verticals such as auto lending and mortgage lending in the future.
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