To The Moon

What stocks should investors consider buying now?

Photo by Scott Graham on Unsplash

The stock market has been on a tear since early 2019. While some sectors have outperformed, others have underperformed. In particular, tech companies have lagged behind other industries.

In today’s post I will be focusing on the top 10 growth stocks which you may want to look into. These stock picks are in no particular order. For any of the companies in my list or any other list be sure to do your own research.

I am not a financial advisor and anything I say is not to be taken as financial advise. For any investment decisions please contact a financial professional. My article is based on my own opinions, research and understanding of the financial markets.

What are Growth Stocks?

A growth stock is one that grows its earnings per share (EPS) at an above average rate. This means that it can grow its EPS by increasing revenue or reducing costs. A company with high EPS growth potential is typically growing faster than the overall economy.

Growth stocks tend to be more volatile than value stocks which can result in higher risk. Picking the right growth stocks can often have the investment grow faster than the normal economic growth at the given time.

Growth stocks are often seen as companies which have the potential to take up large market shares over time which would result in the companies high valuation in the future.

1. Etsy ($ETSY)

Etsy has been a growing success over the past few years. Covid lockdowns worldwide helped boost Etsy’s business as more people decided to make their own online stores through Etsy to sell their creations. Etsy is currently trading at $7.19 per share with a market cap of $2.6 billion.

2. Shopify ($SHOP)

Shopify Inc., is a Canadian e-commerce platform that allows merchants to set up an online store. The company offers a variety of services including web design, payment processing, inventory management, shipping, marketing and customer support.

Shopify was founded in 2004 by Tobias Lutke and Marc Lore. It currently trades at around $34.34 per share with a market value of about $43 billion at the time of writing this.

3. Block ($SQ)

Block is a payments processor that handles billions of dollars per year, and it just launched a new product called Cash App. This app allows people to send each other money instantly, and it also has an exchange service that lets you buy and sell cryptocurrencies like Bitcoin and Ethereum.

Block, previously known as Square, was founded in 2010 by Jack Dorsey. It currently trades at about $74.63 per share with a market valuation of about $44 billion at the time of writing this.

4. Amazon ($AMZN)

Amazon is one of the most valuable companies in the world. With its market cap reaching nearly $1.5 trillion, Amazon is worth more than many countries’ GDPs.

Amazon was founded in 1994 by Jeff Bezos. He originally started the company as an internet bookstore before expanding into various other areas. Today, Amazon sells everything from electronics to clothing to books.

Amazon also has additional services such as the very successful AWS or Amazon Web Service which provides IaaS (Infrastructure as a Service) through cloud based architecture.

Amazon currently trades at about $137.28 per share with a market cap of $1.4 trillion at the time of writing this.

5. Lovesac ($LOVE)

LoveSac is an omnichannel furniture brand with 116 showroom locations across North America. LoveSac has been growing steadily since it launched in 2015. In 2017, LoveSac expanded internationally and opened up shop in Asia and Europe. LoveSac now operates over 115 stores in the United States, Canada, Mexico, Brazil, Chile, Argentina, Colombia, and many more.

In 2018, LoveSac continued to grow organically and signed strategic partnerships with major retailers such as Bed Bath & Beyond, Crate&Barrel, Wayfair, and Overstock.com. These partnerships allow LoveSac to sell products directly to consumers online and offline. LoveSac now sells over 10 million pieces per month.

In addition to retail, LoveSac offers a mobile app where customers can browse and buy furniture items online. LoveSac also provides a web portal where customers can view and purchase furniture online. Finally, LoveSac offers a cloud-based software solution that allows customers to design and build custom furniture.

Lovesac currently trades at about $34.85 per share with a market capitalization of $500 million at the time of this writing.

6. ServiceNow ($NOW)

ServiceNow is an innovative S&P 500 company that provides cloud-based IT management software. The company was founded in 2006 and went public in 2015. In 2017 it had $1.5 billion in revenue and over 200,000 customers.

ServiceNow provides software solutions for managing all aspects of IT infrastructure including network operations, security, application development, data centre operations, and customer support. The company’s flagship product is ServiceNow Orion, which helps businesses manage their entire IT environment.

ServiceNow was recently named the best place to work in 2019 by Glassdoor.

The company currently trades at about $466.03 per share with a market capitalization of around $94 billion at the time of writing this.

7. Workday ($WDAY)

Workday is another great software company that focuses on providing business applications. Founded in 1999, Workday is headquartered in San Mateo, California.

Workday provides enterprise resource planning (ERP), human resources (HR), financial management, and supply chain management software. Workday ERP is used by over 100,000 organizations worldwide. Workday HR is used by over 50,000 employers globally. Workday Financial Management issued by over 1,500 companies worldwide. Workday Supply Chain Management is used by over 5,000 companies worldwide.

Workday has raised over $2.3 billion in funding. It was most recently valued at $13.8 billion in its last round of financing.

Workday currently trades at about $162.36 per share with a market value of approximately $41 billion

8. NVIDIA ($NVDA)

NVIDIA is one of the most important companies in artificial intelligence (AI)/machine learning (ML). However, investors are ignoring how fast the technology market is growing, and how quickly NVIDIA could become obsolete.

The company has been around since 1993, and have developed graphics processing units (GPU) that accelerate AI/ML algorithms. GPUs were originally designed to run games, but they are now being used to train deep neural networks.

NVIDIA is the world leader in GPU computing. They have over 2,700 patents and licenses related to GPU computing. Their current annual revenue is around $16 billion.

In 2018, NVIDIA had record high revenues of $13.5 billion, up nearly 30%. This is due to the fact that the company now sells GPUs, chips used for deep learning, to many different industries, including gaming, automotive, cloud computing, finance, healthcare, manufacturing, media, oil & gas, semiconductors, telecommunications, transportation, and utilities.

However, despite having such a wide range of customers, NVIDIA still generates about 90% of its revenue from GPU sales. And while the company does sell some ASICs (application specific integrated circuits), its main focus is on GPUs.

9. Tesla ($TSLA)

Tesla is my favourite stock, taking up roughly 50% of my portfolio at the moment. I believe everyone knows Tesla now but I will run through what they do.

Tesla was founded in 2003 with Elon Musk as CEO. In 2004, it launched the first electric car, the Roadster. In 2008, it introduced the Model S. In 2012, it released the Model X SUV. In 2016, it released the Model 3. Musk left his position as CEO in 2017, but he remains chairman of the board. He also serves as CTO.

Tesla recently has been reaching a very large scale with their current production run rate at over 1.5 million cars. Tesla expects the company to be producing 20 million cars per year by 2030 and this seems achievable.

Tesla Gigafactories are targeted to make between 1.5–2 million cars per year which Elon said would mean they only need about 10–12 Gigafactories to make the 20 million goal feasable.

Tesla also has many products in the pipeline with many to be released next year. These range from the Tesla Semi, Cybertruck, Roadster and of course the continued scaling of their current products.

One of their most exciting projects is their FSD beta program or Full Self Driving. Many people still disbelieve this will ever work however with the understanding of neural networks and seeing how computers have consistantly beat us at things we thought it never could, I think it’s safe to say FSD sure is in the realm of possibility.

Don’t believe me?

Checkout some people with access to the current build of FSD (FSD Beta 10.69). On YouTube, channels such as Whole Mars Catalog and Chuck Cook, make great content covering the progress of FSD. You may be surprised to see how close this is to completion.

With the success of FSD, the resultant financial success for Tesla could be insane. They would be able to undercut taxi services such as Uber with their self driving taxis. Self driving semi-trucks would be a no brainer for logistics companies.

Vehicles would never get sleepy or distracted resulting in very safe and efficient drives. You could have vehicles driving more or less 24/7 of course with the exception of loading and charging. There would be no worries of ever having trucker shortages and supply issues with ground based logistics. This is a BIG opportunity.

And it doesn’t end there. If you are really interested, lookup the Tesla bot. But not just on the surface. Think about how something like this could really impact the world if companies could purchase Tesla bots to be workers, with similar benefits to FSD. Don’t get tired/distracted, can work more or less 24/7 and will be less prone to make mistakes as well as there being no more worker shortages.

Of course, the Tesla bot is a longer term play before it gets exceptionally good at working. But this means Tesla could be a great pick if you are investing for the long-term.

10. Cloudflare ($NET)

Cloudflare is an internet security firm that provides web application firewalls, DNS resolvers, CDNs, email servers, and other tools. It was started in 2009 by Matthew Prince who previously cofounded Akamai Technologies. The company raised $100M in funding in 2015.

The company’s cloud platform helps protect websites against cyberattacks. Its technology works by analyzing traffic patterns and identifying malicious activity. Cloudflare claims that its service can detect up to 99% of DDoS attacks.

The company offers free plans for small businesses and individuals. Cloudflare also offers paid plans for larger organizations. Cloudflare’s main competitors include Google, Amazon Web Services, Microsoft Azure, DigitalOcean, Rackspace, Linode, and others.

With all the talk about AI, machine learning, and automation, Cloudflare has been making waves in the industry. Their recent acquisition of Zscaler shows they are serious about protecting online data and privacy.

Cloudflare is currently trading at $162.36 per share. With a market cap of over $42B, Cloudflare is one of the best growth stocks out there. It does also appear that in pre market trading on the day I write, this the stock has jumped 11.17% to $180.50 per share

11. Alphabet ($GOOGL)

Alphabet Inc. is the parent company of Google. It is headquartered in Mountain View, California. In addition to Google, Alphabet owns many subsidiaries including: Calico, Nest Labs, Verily Life Sciences, Waymo, Wing, X, Capital G, and Access Industries.

Google is the largest search engine in the world. As of 2017, it had approximately 90% of the global search engine market. Google’s revenue comes from advertising, which accounts for almost 80% of their total revenue.

Google has made significant investments into artificial intelligence (AI), self-driving cars, robotics, drones, and quantum computing. They recently acquired Boston Dynamics, DeepMind, Motorola Mobility, and Nest Labs.

Alphabet currently trades at $116.65 per share. With a current market capitalization of nearly $1.5 trillion, Alphabet is one of the most valuable companies in the world.

If you want to invest in a company that is already profitable, then Alphabet is your best bet. And since they have such a large presence in so many different industries, they could continue to grow.

12. Meta Platforms ($META)

Meta Platforms is a software development company based in San Francisco, CA. Previously known as Facebook, Meta Platforms was founded in 2004 by Mark Zuckerberg. He sold his stake in the company to investors in 2012.

In 2014, Facebook announced that it would acquire Instagram for $1 billion. This deal closed in April 2016.

As of Facebooks change to Meta, the company is pivoting more towards developing products for the Metaverse (hence the name change). The Metaverse is a virtual reality environment where users can interact with each other through avatars.

Meta after purchasing Oculus in March 2018, now owns the popular VR headset. The Oculus Quest 2 has been very popular among gamers allowing nearly anyone to get into Virtual Reality with it’s standalone architecture and affordable pricing.

Meta Platforms is currently trading at $168.78 per share. With a $450 B market cap, Meta is one of the top 50 tech companies in the US.

Summary

The above list is not meant to be an exhaustive list of every single growth stock pick for September 2022. Instead, these are some of my favourite picks. If you have any questions or comments, please leave them below.

Thanks for reading

Follow me to know more updated stocks analysis!

$Tesla Motors(TSLA)$  $Meta Platforms, Inc.(META)$  $Alphabet(GOOGL)$ $Cloudflare, Inc.(NET)$  $NVIDIA Corp(NVDA)$  $Workday(WDAY)$ $ServiceNow(NOW)$  $Lovesac Co.(LOVE)$ $Amazon.com(AMZN)$ $Block(SQ)$  $Shopify(SHOP)$ $Etsy(ETSY)$