The search for top growth stocks is intensifying, in ways we haven’t seen in some time. Indeed, it feels like 2021 all over again with growth stocks seeing incredible momentum-driven surges without any expiry date in sight.
Of course, anything can change in an instant. We’re still dealing with high-interest rates, and the Federal Reserve remains overly hawkish. That said, the stock market is for optimists, and optimists are certainly showing up right now.
For those taking a truly long-term view of the markets, there are certain growth stocks that look compelling. These are three of the top growth stocks I think have relatively attractive valuations right now.
Visa (V)
Visa (NYSE:V) stands out as the leading credit card company in the stock market, displaying impressive revenue and earnings growth while maintaining a reasonable valuation compared to peers. With reliable profit margins and consistent growth, Visa has witnessed a remarkable 77% rally in its stock over the past five years. The latest earnings report showcased double-digit revenue and earnings growth, contributing to a profit margin above 50% for three consecutive quarters.
Visa has also been aggressively pursuing growth. Recently, Visa recently acquired Pismo, a Brazilian fintech company, for $1 billion in cash. This provided Visa with access to a cloud-native API platform to support its banking and card services. The company’s position as the largest card network in the world, combined with the ongoing shift towards digital payments, positions Visa as a long-term winner.
Visa is also leading the way in the adoption of Tap-to-Pay technology. Its active involvement in central bank digital currencies (CBDCs) solidifies its position in the digital space. With a successful track record and strong financials, Visa is well-positioned for future growth. Furthermore, the company stands to benefit from the rebound in travel activity, making it an attractive investment option.
Amazon (AMZN)
Amazon (NASDAQ:AMZN) is venturing into the robotics space, aiming to drive productivity and global sales. The company has offered $1.7 billion to acquire iRobot (NASDAQ:IRBT), known for its Roomba robotic vacuum cleaner. Regulatory approvals for the deal are pending.
With the integration of artificial intelligence, the adoption of robots is expected to increase, making them more productive and in higher demand. This move presents an enticing opportunity for investors considering AMZN stock, which has already gained 50% year-to-date and offers a favorable entry point as it remains 12% below its 52-week high.
Amazon dominates in e-commerce, cloud computing, online advertising, and streaming services. Despite 2022 challenges, it has the potential for a rebound in the latter half of 2023. Strong consumer spending, steady demand for AWS, and untapped opportunities in ventures like Amazon Pharmacy and Amazon Luna contribute to its growth prospects.
Additionally, and perhaps most importantly, Amazon stands to benefit from the surge in AI, as it is among the companies that are pioneers in this space. Over the long-term, AMZN stock has proven to be a smart bet. That hasn’t changed.
Rivian Automotive (RIVN)
Rivian Automotive (NASDAQ:RIVN) is a prominent electric vehicle manufacturer specializing in light-duty trucks. Despite a year-to-date decline of -3.92% in RIVN stock, the company’s financials remain strong. In Q1, Rivian produced over 9,000 vehicles and delivered nearly 8,000, resulting in a revenue of $661 million, marking a remarkable 595.8% year-over-year increase.
Notably, Q1 non-GAAP earnings per share exceeded consensus by $0.34 at -$1.25. Rivian’s adoption of new technologies, particularly the Enduro drive units and LFP battery packs, presents significant growth opportunities.
Rivian is experiencing strong demand for its R1S model, along with a significant order of delivery vans from Amazon, ensuring robust financial results in the coming months. The company’s long-term demand outlook remains favorable, and the bankruptcy of Lordstown Motors (NASDAQ:RIDE) is expected to drive further demand for Rivian’s pickup trucks. Additionally, the upcoming R2 SUV, priced at $40,000 to $60,000, will attract new customers who seek more affordable options compared to Rivian’s higher-priced EVs.
On the date of publication, Chris MacDonald has a long position in AMZN. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
