For a lot of people, the arrival of 2021 is welcome. It’s understandable that after months of chaos, tragedy and uncertainty, folks are looking ahead for better days. Investors, too, are looking to the future and evaluating which growth stocks to buy now.
Growth stocks form a critical part of a successful portfolio. They offer the tantalizing potential for increased value and earnings. That prospect of upward movement provides an incentive for investors to carefully review various statistics and analyst opinions. Lots of information is available. But in the end, it’s still up to each investor to decide.
However, even with the novel coronavirus, growth stocks still have strong appeal. After a major dip last March, many stocks soon regained their footing and several segments of the market carried significant momentum toward the new year.
Today’s list includes several well-known names. They are companies that had a strong track record of success before Covid-19 struck. They also have the strength and leadership to navigate the pandemic’s wide-ranging effects. So, all of them are poised to grow once the novel coronavirus is better contained.
Here are seven stocks to buy now:
- Facebook (NASDAQ:FB)
- Adobe (NASDAQ:ADBE)
- Bank of America (NYSE:BAC)
- PayPal Holdings (NASDAQ:PYPL)
- Microsoft (NASDAQ:MSFT)
- Alibaba (NYSE:BABA)
- General Electric (NYSE:GE)
Growth Stocks to Buy Now: Facebook (FB)
Despite complaints from some lawmakers, Facebook is still doing its thing and represents one of the more compelling growth stocks on the market.
This social media pioneer continues to draw consumers. In fact, use of its properties is still expanding and investors who bought and are holding FB stock enjoy its contribution to their portfolio. The company’s holdings include Facebook (of course) as well as Messenger, Instagram and WhatsApp. Add all of those platforms together and you get an astonishing 3.2 billion monthly active users.
Facebook also stands to grow as its Oculus virtual reality (VR) experiences gain popularity. Plus, the company’s slate even includes a developing e-commerce presence.
Fellow InvestorPlace contributor Chris Tyler recently listed FB as one of three social media stocks to buy. True, the company faces some challenges and share prices recently weakened. Nevertheless, Facebook is set for another strong year and recent woes offer a buying opportunity.
Adobe’s winning recipe includes dependable graphics software products that are still evolving and being improved upon. These products are then combined with reliable revenue from monthly subscriptions. The result? Attractive financials and more-than-pleased investors.
When it comes to financials, Adobe consistently posts double-digit revenue growth and its net profit margin tops 30%. For instance, the company recently achieved a record of $3.42 billion in revenue for its fourth quarter of 2020. That made for 14% year-over-year (YOY) growth.
Currently, shares in ADBE stock are trading around $482, which is a healthy climb from its 52-week low of $255.13.
But even with its strong performance, several experts believe this company has room to grow. For instance, Tipranks says the consensus of eight analysts following ADBE is a target of $575 — a 19.1% increase. That means this pick of the growth stocks hasn’t run its course yet.
Bank of America (BAC)
After 2020 delivered a market with inconsistent strength, the new year should provide growth opportunities in the banking sector. Bank of America is one of those poised for improvement during 2021.
In fact, BAC has quietly avoided the turmoil and controversy that has beset some competitors in its arena. Plus, over the years since the financial collapse of 2008, the bank has increased its strength. Fears that the pandemic-fueled downturn would decimate banks like Bank of America have proven to be unfounded.
BAC stock has rallied since March, but not to the same extent as other parts of the market. So, there’s room to grow. That’s why Bank of America made it onto this list of growth stocks to buy now.
With shares currently trading at around $30, BAC has the potential for big gains in 2021.
Digital payment company PayPal became a standalone company in 2015 and has gone on to shine.
What’s more, InvestorPlace colleague David Moadel recently said that potential investors should not be put off by the stock’s recent gains. He sees more on the horizon and I agree. Moadel notes, “If 2020 has taught market traders anything, it’s that the e-commerce explosion is a real and enduring phenomenon.”
Currently trading just below $232 per share, PYPL stock has increased over five times in value since its spinoff from Ebay (NASDAQ:EBAY) and the company appears strong heading into 2021.
PayPal’s March low was around $82, but in July it was trading well over $170 and didn’t stop there.
PYPL is one of the growth stocks to buy now, but also a top pick to hold.
With revenue fueled by its growing cloud services, Microsoft — one of the largest software companies in the world — is definitely one of the best growth stocks to buy now.
In fact, Leo Sun at the Motley Fool recently said that MSFT “stock nearly quadrupled as CEO Satya Nadella’s ‘mobile first, cloud first’ strategy paid off.” So, this leading tech stock is rewarding investors. Microsoft’s cloud, gaming and consumer-oriented products soared during the stay-at-home economy resulting from the pandemic.
Naturally, these products are poised to bring more strong returns during 2021. Analysts forecast Microsoft’s revenue will climb 10.7% in 2021, while earnings will rise 17.4%.
Speaking of Amazon, a company often compared to the U.S. shopping giant is Alibaba, a mammoth version of the company tailored for Chinese consumers.
Like Amazon, Alibaba offers an e-commerce platform, cloud services and more. Its revenue has significantly increased over the last 36 months. Additionally, BABA stock has grown over 179% for the past five years.
So, the e-commerce giant has a wide runway leading to 2021. However, the way forward may not be simple. There are possible hurdles looming on the horizon, including concerns about possible regulations being imposed by both U.S. and Chinese authorities.
In the United States, BABA is threatened by legislation that will require Chinese stocks to be audited by U.S. regulators. The stocks could be delisted from American exchanges if they refuse the audit. Louis Navellier warned recently in InvestorPlace, “Under the current climate of animosity between the two countries, that’s a big ask.”
Alibaba certainly brings a new element of risk. But, the company also is posting truly impressive numbers and its prospects for the coming year are strong. So, despite the risk, Alibaba is one of the better growth stocks on the market right now.
General Electric (GE)
Last on my list of growth stocks to buy now is an affordable name: General Electric.
This company is an iconic in U.S. industry circles. But it is also a pick that has seen better days. However, the newest streamlined version of GE appears to be ready for a return to those better days.
In fact, InvestorPlace colleague Bret Kenwell suggests the company’s curse is set to lift. Areas of potential growth for 2021 and 2022 include its aerospace and healthcare divisions. Also, GE’s leadership has expanded the company’s role in renewable and alternative energy sources.
Like a lot of other companies, General Electric’s prospects will brighten as the global economy recovers from the pandemic’s downturn. As such, GE stock certainly has room to grow once that happens.
On the date of publication, Larry Sullivan held a long position in MSFT.
Larry Sullivan is a veteran journalist in Florida who has covered banking and finance for several years. He is a former investing editor at U.S. News & World Report in Washington D.C..