Growth stocks continue to drive both the stock market and investors’ portfolios. Game-changing growth stocks to buy that have multi-year catalysts to drive their earnings and share price steadily higher are rare and hard to find. But when an investor is lucky enough to buy such a stock, it is advisable to hold on and ride it to great heights.
Consider that a $1,000 investment made in Apple (NASDAQ:AAPL) back in 2007 when the iPhone launched would be worth nearly $55,000 today. That is a return on capital of about 5,400%, and you can see the huge impact growth stocks can have for smart and patient investors. Consider also that this year’s 30% gain in the Nasdaq Index has been driven by fewer than 10 growth stocks. Want to get rich? Here are three growth stocks to buy right now.
Nvidia (NVDA)
We’ll start with the elephant in the room. That would be microchip and semiconductor designer Nvidia (NASDAQ:NVDA). Going into the company’s second-quarter print, expectations could not have been higher. News headlines proclaimed that this year’s stock market rally depended on Nvidia beating Wall Street forecasts. Mission accomplished! Nvidia crushed analyst expectations and issued bullish guidance that topped even the most aggressive outlooks for the company’s future sales and profits.
As investors held their breath, Nvidia reported EPS of $2.70 versus $2.09 that was expected. Revenue in Q2 amounted to $13.51 billion, double the $6.7 billion recorded a year earlier and ahead of the $11.22 billion anticipated on Wall Street. The company also reported that its margins increased to 71.2% during Q2. Perhaps most impactful, Nvidia raised its forward guidance for the third quarter, saying it expects revenue of $16 billion, which is higher than the $12.61 billion previous forecast.
The higher guidance suggests that Nvidia’s sales in Q3 will grow 170% from a year earlier. Almost all of the growth and rosy outlook is due to skyrocketing demand for the company’s artificial intelligence microchips. To say that Nvidia is among the growth stocks to buy right now is an understatement. Year to date, NVDA stock has more than tripled, with more upside ahead.
Eli Lilly (LLY)
Hot on the heels of Nvidia is prescription drug maker Eli Lilly (NYSE:LLY). The pharmaceutical company’s stock is up 50% so far in 2023. LLY stock hit an all-time high after the company reported that its Q2 profit rose 85% from a year earlier, bolstered by surging sales of its diabetes drug Mounjaro, which is being reviewed by the U.S. Food and Drug Administration for use as a weight loss treatment.
The positive Q2 print included revenue of $8.31 billion, up 28% from the same quarter of 2022. The company said that sales of Mounjaro amounted to $979.7 million during Q2, up more than 6,000% from sales of $16 million a year earlier. Eli Lilly also lifted its forward guidance, saying it now sees full-year revenue of between $33.4 billion to $33.9 billion.
Earnings guidance was also raised to a range of $9.70 to $9.90 per share for the entire year, up from a previous range of $8.65 to $8.85. LLY stock has trounced the wider pharma sector this year. But despite the big run, analysts see more growth ahead for this stock. The median price target on the stock is nearly 10% above current levels.
Netflix (NFLX)
Don’t sleep on Netflix (NASDAQ:NFLX). The company looks to have gotten its house in order, offering a cheaper ad-supported streaming tier and cracking down on password sharing worldwide. The result has been an acceleration of growth that has boosted Netflix’s earnings and subscriber numbers. For Q2, Netflix reported EPS of $3.29, which beat consensus forecasts of $2.86 a share. Revenue in Q2 rose 3% to $8.19 billion, which was a touch lower than analysts’ forecasts.
Most important, Netflix added 5.9 million net new subscribers during the quarter which trounced the 1.9 million that Wall Street had expected. The subscriber additions marked the company’s best second quarter since the depths of the Covid-19 pandemic in 2020. Netflix now has nearly 240 million subscribers worldwide, and the company is viewed as being more insulated from the actor and writer strike in Hollywood than other entertainment companies.
While Netflix’s forward guidance was a little soft for Wall Street’s liking, make no mistake. Over the last 12 months, NFLX stock has risen nearly 80%.
On the date of publication, Joel Baglole held long positions in AAPL, NVDA and LLY. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
