Hypergrowth stocks offer substantial gains with notable annual revenue growth. These companies are often categorized as companies with fast growth rates, though profitability metrics can differ depending on the stock and its sector.
Indeed, recent years have given rise to unprofitable tech companies that have seen their valuations explode. Following the pandemic and a return of the zero-interest rate environment, investors increasingly bet on riskier and riskier growth stocks. However, since then, we’ve seen the fallout from rising interest rates and an evolving investing environment.
From here, I think it makes sense to still focus on select hypergrowth stocks, but those with the best balance sheets and fundamentals. In that regard, I’ve hand-picked a list of three hypergrowth stocks I think are still worth investing in, particularly on any big dips in the future.
Celsius Holdings (CELH)
Celsius Holdings (NASDAQ:CELH) emerged as a major success in the last five years, soaring by an absolutely incredible 4,400%. The stock’s year-to-date surge isn’t anything to sneeze at either, coming in at 71%. Recently, the company thrilled shareholders with a 3-for-1 stock split, which, while not altering market value, can enhance investor appeal through psychological impact.
In Q3, Celsius achieved $385 million in revenue, marking a 105% year-over-year increase, with net income doubling to $84 million and a net profit margin exceeding 20%. Despite a 3,800% stock gain in five years and 50% year-to-date gains, Celsius, with a $12 billion market cap, retains growth potential. With a strong balance sheet boasting $1.2 billion in current assets covering $336 million in current liabilities, Celsius, thriving on heightened consumer demand, sustains a trajectory of growth.
Microsoft (MSFT)
Microsoft (NASDAQ:MSFT) empowers transformation through technology, trading between $261.03 and $412.15 in the past year, averaging $369.39, exceeding expected earnings each quarter. The acquisition of Activision Blizzard, known for Call of Duty and generating $3 billion, boosts Microsoft’s gaming industry foothold. With a 172.16% earnings growth in the last five years, Microsoft’s trajectory indicates continued success.
Microsoft’s quantum computing strategy diverges from the mainstream, requiring substantial research and development investments. This unique approach complements its AI advancements, contributing to the company’s growth narrative.
With a robust portfolio of profitable ventures, Microsoft has a safety net as it explores the high-potential quantum computing domain. The addition of OpenAI’s previous CEO, Sam Altman, reinforces Microsoft’s commitment to AI innovation. Financially, Microsoft boasts impressive figures, with Q3 revenue at $56.5 billion, a 13% year-over-year increase, and net income reaching $22.3 billion, up 27% year-over-year.
Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) emerged as a top-performing stock in 2023, soaring over 240% year-to-date. Fueled by high demand for its AI solutions, powering advanced applications like OpenAI’s ChatGPT, Nvidia’s GPUs proved efficient for complex AI tasks. Despite past market concerns, Nvidia’s resilience and innovation position it for continued growth.
Nvidia made a major stride this year with the launch of its first graphics processing unit (GPU) for accelerated quantum computing. This breakthrough platform allows researchers to create applications seamlessly blending quantum and classical computing, expanding computing capabilities. Nvidia goes further, partnering with IQM to drive hybrid quantum applications, aiming to boost performance and explore new computing realms.
Additionally, the company advances in home automation and IoT with its AI technologies, exemplified by the Bengaluru Airport’s use of the NVIDIA Metropolis vision AI platform by Industry.AI. Anticipated applications in smart homes reinforce its IoT leadership.
NVDA recently hit an all-time high of more than $500 per share, but has since fallen back to the $475 level at the time of writing. Lately, this has been a stock that’s been hard to buy at a discount. Long-term investors looking to gain exposure certainly have an intriguing dip to consider right now.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
