High-quality growth equities will start to disappear as global growth slows. The Conference Board economists predict that real gross domestic product growth in the United States will decrease to 1.9% in 2023 and 0.5% in 2024. It may become more challenging for investors to discover trustworthy growth stocks to invest in since many analysts predict at least a moderate U.S. recession in the near future. However, growth equities beat value stocks in 2023, and investors believe that pattern will hold when the Federal Reserve eventually switches to interest rate reductions.
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These top 10 growth stocks, according to CFRA Research analysts, have shown at least 15% annual revenue growth over the previous three years:
Alphabet Inc. (GOOGL):
Google and YouTube are both owned by Alphabet, one of the biggest internet search and advertising firms in the world. Alphabet announced 7% year-over-year revenue growth in the second quarter, which includes 28% growth in cloud revenue. According to analyst Angelo Zino, Alphabet is poised to deliver consistent yearly revenue growth of between 6% and 11% through at least 2025 and has enormous profitability and cash flow potential. Zino is especially optimistic about Google’s potential for artificial intelligence, which include business AI tools and AI search functionality.
Amazon.com Inc. (AMZN):
One of the top-performing growth stocks of all time has been Amazon, a global leader in e-commerce and cloud computing. As revenue growth slowed to just 10.9% in the most recent quarter, Amazon shares have unfortunately declined by nearly 20% over the past three years. The second quarter saw a big improvement in operational profit for Amazon’s e-commerce sector, according to analyst Arun Sundaram, and the company’s advertising division is experiencing exceptional development. According to Sundaram, expansion of high-margin industries like advertising and cloud services should increase revenues in the upcoming years.
Nvidia Corp. (NVDA):
Nvidia, a manufacturer of high-end semiconductors, has had some of the stock market’s most dramatic growth over the past 15 years. Due to a cyclical downturn in the semiconductor business, the company’s sales growth had been declining in recent quarters, but Nvidia has now significantly resumed growth. Nvidia’s net income increased by 843% and its revenue increased by 101% in the most recent quarter. Zino predicts $23 billion in free cash flow growth in fiscal 2024, up from $3.8 billion in fiscal 2023, and believes investments in generative AI will be a demand driver.
Meta Platforms Inc. (META):
In the second quarter of 2023, Meta’s growth rebounded to positive 11% after three consecutive quarters of negative year-over-year sales growth to end 2022. According to Zino, Meta has a favourable valuation and a number of significant development prospects, including Reels, the metaverse, and AI technologies. Additionally, he claims that in the upcoming years, the company’s margins should increase. In 2024, Zino predicts a 10% increase in sales.
Tesla Inc. (TSLA):
The top producer of electric vehicles in the US is Tesla. Impressive 47.2% revenue growth and 19.7% net income increase were recorded by Tesla in the second quarter. Revenue in the automotive sector increased 46%. According to analyst Garrett Nelson, the start of Cybertruck production and the opening of new plants in Texas and Germany have paved the way for Tesla’s future expansion in 2023 and beyond. The Roadster and the Optimus robot, according to Nelson, will also be longer-term growth drivers. In 2023, he predicts a 24% increase in revenue.
Chevron Corp. (CVX):
Chevron is a significant oil company with operations in petrochemical, refining and marketing, and exploration and production. Although oil majors aren’t typically thought of as having strong growth potential, recent improvements in the energy industry have turned oil stocks into some of the world’s fastest-growing businesses. Despite reporting a 28% year-over-year decline in revenue for the second quarter, Chevron’s revenue was still up over 30% over the previous two years. In 2024, analyst Stewart Glickman predicts a return to revenue growth and claims Chevron’s purchase of PDC Energy was well-priced.
Adobe Inc. (ADBE):
Adobe creates tools for marketing and e-commerce as well as software for creating creative material. In the second quarter, Adobe reported record sales and 10% revenue growth, including 12% growth in its digital experience business and 10% growth in its digital media division. According to Zino, Adobe has a lot of potential for profiting from AI technology. For both normal users and businesses, Adobe is making its Firefly generative AI models available across many platforms for free. In fiscal 2024, Zino forecasts a 13% increase in revenue.
Salesforce Inc. (CRM):
The most popular supplier of cloud-based customer relationship management tools worldwide is Salesforce. In the first quarter, Salesforce reported an 11% increase in sales and a 611% increase in net income. According to Zino, Salesforce is valued favourably and has the potential to increase its profitability and increase its market share. He claims that Salesforce has assembled the most complete portfolio of CRM products for business customers of all sizes as a result of years of aggressive acquisitions. As customer cloud migration continues, Zino anticipates between 9% and 11% annual revenue growth through at least fiscal 2026.
Pfizer Inc. (PFE):
One of the biggest pharmaceutical businesses in the world is Pfizer. Pfizer has sold a lot of its COVID-19 vaccine and booster doses over the last two years. However, as COVID sales have slowed this year, the stock is down 29.4% as of August 24. Although Pfizer’s revenue fell by 54% in the second quarter, the firm forecast a 6% to 8% revenue increase this year, excluding sales of COVID products. Pfizer’s 19-drug pipeline, according to analyst Sel Hardy, has the potential to bring in $20 billion by 2030.
Netflix Inc. (NFLX):
As of the second quarter, Netflix had around 238 million paid subscribers and was the market leader in video streaming. In the second quarter, Netflix reported an 8% increase in subscriptions and a 3% increase in income. According to analyst Kenneth Leon, Netflix will continue to experience consistent growth as a result of the continuous migration of TV consumers from linear networks to streaming services. Ad-pay subscription options, paid shared memberships, and advertising are just a few of the company’s new revenue streams. Leon anticipates a 7.5% increase in revenue in 2023.