When it comes to investing, growth is the name of the game. You want to grow your portfolio and net worth by finding the best growth stocks to buy. So you should be looking at growth stocks to buy, right?
That’s what I’m after. And I use the Portfolio Grader to winnow down the field to identify the growth stocks to buy in the market.
The Portfolio Grader gives you an overall grade on an “A” through “F” scale that helps you identify the best names on the market today based on a variety of metrics. But it also scores for individual categories, like earnings growth. And that’s the category we’re going to key in on today.
Growth stocks typically have a high rate of revenue growth and/or earnings growth. They are increasing sales at a high rate, and they are typically putting a significant portion of their profits back into the business to encourage expansion.
For that reason, many of the best growth stocks to buy don’t do a great job of giving out dividends, but that’s OK. The money is going to be of good use if it means growth stocks are outperforming the market.
Here are seven outstanding growth stocks to buy identified by the Portfolio Grader. As we look at each, we’ll highlight their overall grades and their growth ratings.
Shopify (SHOP)
Shopify (NYSE:SHOP) is an e-commerce stock that’s up 75% so far this year, despite a slight pullback in August and trading roughly flat since May.
The company operates a platform that lets small businesses build an online store and connect with customers around the world.
Earnings performance was solid in the first quarter and then accelerated in Q2. Revenue of $1.7 billion was up 31% from a year ago, and profits grew 27% to $835 million.
“We’re not just shipping products faster, but we are also expanding our global merchant base, all while improving our ability to generate greater free cash flow,” Shopify President Harley Finkelstein said.
Shopify issued guidance for the third quarter for continued revenue growth in the low-20s percentage, and free cash flow to be better than in Q1 and Q2 combined.
SHOP stock has an “A” growth rating and an overall “B” rating in the Portfolio Grader.
Salesforce (CRM)
Salesforce (NYSE:CRM) provides cloud-based customer relations management software that’s used by sales teams, IT support and marketing teams.
The company’s software-as-a-service platform is designed to help companies find potential customers and provide a higher level of service.
Salesforce is leaning hard into the artificial intelligence movement by recently launching a new conversational AI assistant called Einstein Copilot. The tool is going to be built into the user experience of every Salesforce application, the company says.
Earnings for the company’s fiscal Q2 2024 saw revenue up 11.4% to $8.6 billion, and earnings per share of $1.28. Guidance for the fiscal third quarter and the full year shows revenue growth continuing at 11%, with full-year earnings per share coming in at a range of $3.50 to $3.52.
Operating cash flow growth should be at 22% to 23% for the full year, Shopify says.
SHOP stock is up 64% this year. It gets “B” ratings for growth and its overall score in the Portfolio Grader.
United Airlines (UAL)
United Airlines (NASDAQ:UAL) continues to profit from what I call a coronavirus backlash.
People were tired of being shut in for much of 2020 and 2021 and started venturing out cautiously in 2022. Now that the virus is three years old and vaccines are common, many people are shedding their inhibitions and flying once again, both domestically and internationally.
United Airlines has more than 120 international destinations and 210 locations in the U.S., which puts it in a good position to profit from the trend. And it’s doing just that.
Revenue for the second quarter was $14.18, up 17% from a year ago. Income for the quarter was $1.08 billion, or $5.03 per share.
Rising fuel costs have the potential to cut into United Airlines’ profits in the third quarter, which explains the recent dip in UAL’s stock. But United Airlines is still showing a 17% gain this year. It gets a “B” growth rating and a “B” overall rating in the Portfolio Grader.
Palantir Technologies (PLTR)
Palantir Technologies (NYSE:PLTR) is a good way to play the growth of generative AI.
The company sells customized data analytics software to help companies analyze data and make decisions.
Its No. 1 customer is the U.S. government. Contracts include helping the State Department monitor the health of its diplomats and Department of Defense contracts to help units in combat situations communicate.
Revenue in the second quarter was $533.3 million, up 12.7% from the previous year. Net income was $28.1 million, up more than 100% from a year ago.
Palantir also issued Q3 guidance for revenue to increase to a range of $553 million to $557 million.
PLTR stock is up 129% this year. It gets a “B” rating for growth and a “B” overall rating in the Portfolio Grader.
McDonald’s (MCD)
Bring on the Golden Arches. McDonald’s (NYSE:MCD) is perhaps the best-known restaurant in the world, with more than 38,000 locations in 100 countries.
It struck gold this year from an unlikely source, its 50-year-old character Grimace, a clumsy purple walking blob of a creature that’s one of Ronald McDonald’s buddies.
McDonald’s marketed Grimace in a big way this year with its Grimace shake and the promotion went viral. Company executives said there were more than 3 billion views of Grimace shake videos on TikTok.
That helped second-quarter revenue jump 14% to $6.47 billion. Net income of $2.31 billion was up 94% from a year ago, and earnings per share of $3.15 was up 97% from a year ago.
Grimace may be ridiculous, but MCD investors will take that kind of performance at any time.
MCD stock is up 5% this year. It gets “B” ratings for growth and overall in the Portfolio Grader.
Uber Technologies (UBER)
Uber Technologies (NYSE:UBER) is a disruptive company that just keeps changing the game.
First, it completely upended the taxi industry by popularizing the rideshare concept and opening up the gig economy to anyone who wanted to make some extra money.
Then it expanded into food delivery via its Uber Eats service and added Uber Freight and Uber Business to serve businesses’ shipping needs.
The company just announced plans to launch a chatbot for its Uber Eats service later this year. The service, which would be available to customers in the U.S., U.K., Australia and Canada, would help customers find restaurants and order food. It would eventually help customers with tasks such as meal planning, Uber says.
Uber’s second quarter included revenue of $9.23 billion, up 14% from a year ago. Net income of $394 million was an improvement over a $2.6 billion loss in the same quarter a year ago.
UBER stock is up 82% this year. It gets “B” ratings for growth and overall in the Portfolio Grader.
Nvidia (NVDA)
There are very few stocks growing as quickly and spectacularly as Nvidia (NASDAQ:NVDA) this year. The semiconductor company blasted through the $1 trillion market cap barrier and is now the No. 6 stock in the world by capitalization.
Share prices for NVDA are up 189% this year.
The instigator for all this growth, of course, is generative AI. Nvidia makes the chips that are necessary for generative AI to function, and it has a massive market share of 80% to 95% of the AI computing market.
Nvidia started its climb early this year when it issued solid Q1 2024 earnings and startling Q2 guidance of $11 billion or 50% better than Wall Street’s expectations.
What’s amazing is that Nvidia not only hit that number in Q2, but it topped it by more than $2 billion. Revenue ended up coming in at $13.5 billion, up 101% from a year ago. Earnings of $2.48 per share was an improvement of 854% from a year ago.
Q3 guidance now calls for revenue of $16 billion. I wouldn’t be surprised if it tops that number as well. NVDA stock has “A” growth and overall ratings in the Portfolio Grader.
On the date of publication, Louis Navellier had a long position in NVDA. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article had a long position in PLTR. The staff member did not hold (either directly or indirectly) any other positions in the securities mentioned in this article.
