Best Growth Stocks for 2024

Growth stocks, especially those of companies on the leading edge of new technologies or industries, are all about the potential for future revenue and profit growth, and a chance for fast stock price appreciation.

This can be a big draw for investors looking to maximize their returns. These firms are, first and foremost, concerned with advancing market share and revenue. Historically, growth stocks have outperformed the market when the economy is surging.

Read on to discover our picks of the 10 growth stocks to watch right now:

A Closer Look at the Best Growth Stocks to invest in 

Now, let’s take an in-depth look at the best growth stocks and explore the investment case behind them:

1. Nvidia – Best Growth Stock to Benefit From AI Adoption

Nvidia is the definition of a top growth share as its shares have climbed 600% since 2002. It dominates the GPU data center market, which is expected to grow for years. While Nvidia has benefited from increased AI spending by big-name companies such as Google, it will really see business rise as more and more countries and smaller companies start using AI applications to help with security and climate-change concerns.

In fiscal 2024, Nvidia had revenue of $60.9 billion, up 126%, while gross margin jumped 15.8 basis points to 72.7%. Earnings per share (EPS) rose 581%.

Nvidia’s GPUs are used in gaming consoles and in computers and are crucial to AI inventions. It just came out with its most powerful GPU chip Blackwell, which is expected to perform about four-times as fast as the next most powerful AI chip.

2. Li Auto – Electric Vehicle Maker Driving Past Its Competitors

Li is showing it can thrive in the competitive Chinese EV sector. Last year, the car manufacturer delivered 376,030 vehicles, up 182.2% over 2022. Unlike other Chinese EV makers such as BYD Company (OTC: BYDDY) or Nio (NYSE: NIO), Li Auto is already consistently turning a profit.

Li Auto’s revenue was $17.44 billion in 2023, up 173.5%, with free cash flow rising to $6.2 billion, and its gross profit margin rising by 280 basis points. It posted net income of $1.7 billion, following a loss of $282 million in 2022.

Li just had its spring launch event and there’s a great deal of excitement around its Li-MEGA, a seven-passenger vehicle with a built-in refrigerator that can go 441 miles on one charge and with a quick charge of 12 minutes, can do an additional 310 miles. At the event, Li also launched its 2024 Li L7, Li L8, and Li L9 models.

3. Advanced Micro Devices – Plenty of Sales-Growth Momentum

Investors have given a lot of attention in the past year to shares that have a connection with AI, and Advanced Micro has gained more than 50% during that period. AMD is the second-largest supplier of microprocessors behind Intel and one of the largest suppliers of GPUs, making it a strong stock to play the AI boom. Its clients include tech players from Microsoft to Meta, which are using AMD’s Instinct MI300X accelerators to power their cloud and enterprise AI applications. AMD boosted its 2024 full-year forecast for AI chip sales by $500 million to $4 billion.

Revenue rose 2% in the first quarter to $5.47 billion, topping analysts’ estimates, while its EPS, adjusted for non-recurring items, was $0.62, slightly ahead of analysts’ predictions. Sales in the data center business, its largest segment, which includes its traditional server chips (CPUs) and AI chips, jumped more than 80% to a quarterly record high of $2.34 billion. The drivers were sales of its Instinct GPU and its EPYC CPU, as well as higher Ryzen processor sales.

While Nvidia dominates that market with a roughly 80% market share, AMD said its newest Instinct AI chips will challenge Nvidia’s similar products for certain uses. Over the past five years, the AMD shares have risen more than 500%.

4. CrowdStrike – Using AI to Prevent Cybercrime

CrowdStrike’s AI-enabled software provides endpoint protection and cloud workload protection for desktops, servers and cloud applications. Demand for its software is expected to grow in coming years because the expansion in e-commerce and AI necessitates the need for better cybersecurity.

A report by Grand View Research estimates the compound annual growth rate (CAGR) of the cybersecurity market at 12.3% through the end of the decade. The market will be worth $500.70 billion by 2030 from $222.66 billion in 2023, it predicts.

The company finished fiscal 2024 with $3.06 billion in revenue, up 36%, and adjusted EPS of $3.09, up 101%. For fiscal 2025, CrowdStrike is forecasting revenue of between $3.93 billion and $3.99 billion and adjusted EPS of between $3.77 and $3.97.

Maybe the most important metric for CrowdStrike, because of its SaaS (software as a service) business, is the growth of its annual recurring revenue (ARR). In the fourth quarter, said it had $3.4 billion in ARR, up 34% year over year.

5. Shopify – No Longer Overpriced

The Canadian company operates an e-commerce platform for merchants. Shopify, which soared with the e-commerce boom during the pandemic, trades at less than half of its record share price of $169.06 reached on Nov. 19, 2021. It’s important to remember that e-commerce is only going to increase, and Shopify is already building a big moat, thanks to the varied services that it provides merchants.

It’s still a growth stock, though, and its finances show plenty of positive trends. In 2023, the company saw revenue rise by 26% to $7.1 billion, as Merchant Solutions revenue increased 27% to $5.2 billion and Subscription Solutions revenue rose 23% to $1.8 billion. The most exciting news is that the company is finally turning a profit. It posted a $132 million in net income, or $0.10 in EPS last year, compared to a net loss of $3.46 billion, or a loss per share of $2.73 in 2022.

Most of its money comes from the transaction fees it charges merchants, so two of the most important metrics for the company are gross payment volume (GPV), the total dollar volume of the transactions that go through Shopify’s platform, and gross merchandise volume (GMV), the total dollar value of orders processed on its platform. GMV grew by 23% to $235.9 billion in 2023 and GPV rose by 32% to $137 billion.

Shopify has forecasted revenue growth in the low teens year over year for the first quarter of fiscal 2024.

6. Rentokil Initial – Stamping Out the Competition

The British commercial pest control product maker has managed to grow through acquisitions and now is seeing better pricing power. While its shares fell last year, they are up more than 11% this year.

In 2022, it spent $6.7 billion to buy Memphis, Tennessee-based Terminix and it bought up an additional 41 franchises in 2023.

Global warming has also opened up new markets for the company’s business as some pests have increased their overwintering range.

In fiscal 2023, Rentokil had revenue of £5.37 billion ($6.8 billion), up 44.7% and profit before taxes of £493 million, up 66.9%. The company paid a dividend of 8.68 British pence in 2023, up 15%. The yield of 1.6% makes it one of the best dividend growth stocks.

7. Datadog – Climbing Along With Cloud Computing

Its software platform helps information technology professionals find problems by collating data from a company’s servers, databases, and apps and puts it into one dashboard. Datadog has steadily grown ARR and retained current customers as more companies are turning to the cloud for their computing needs.

In 2023, the company reported revenue of $2.13 billion, up 27%, and is projecting revenue between $2.55 billion and 2.57 billion in 2024, or a rise of 20% at the midpoint.

EPS for 2023 was $0.14, compared to an loss per share of $0.16 in 2022. Its customers with more than $100,000 in ARR grew by 14.7% to 3,190 while the number of customers with more than $1 million in ARR jumped 35.9% to 396. Its shares trade 30% higher than a year ago.

8. Fortinet – Hybrid, Remote Work Drive the Need for Its Products

The global cybersecurity company has been profitable every year since its initial public offering in 2009, delivering more than 50 enterprise-grade products for cybersecurity. However, it has had some controversy lately, with some of its appliances susceptible to computer viruses. Still, it stands to benefit as one of the dominant players in what, for now, is a fragmented industry.

It operates three units: Unified SASE, Security Operations, and Secure Networking, selling its products, everything from firewall as a service, to antispam protection to high-end servers and routers. It is primarily known as a leading provider of server firewalls. The rise in hybrid and remote work has made the job of firewall protection more complex and increased the need for Fortinet’s services.

While its shares have slipped 11% in the past year, financially, the company is in great shape. Fortinet had $5.3 billion in 2023 revenue, up 20.1%, while EPS rose 37.7% to $1.46. In 2024, the company expects 8.7% revenue growth to between $5.715 billion and $5.815 billion at the midpoint of its forecast. It also said it expected 2024 EPS of between $1.65 and $1.70, an increase of 14.7% at the midpoint.

9. Crispr Therapeutics – Beginning Its Growth Cycle With Casgevy

Crispr became profitable for the first time in the first quarter thanks to milestone payments it’s receiving for its work on Casgevy, a blood therapy, based on a Nobel Prize-winning gene-editing technology. The Swiss company partnered with larger biotech firm Vertex Pharmaceuticals for the therapy, which is a one-time cure for severe sickle-cell anemia and transfusion-dependent beta thalassemia. Though both maladies are rare, affecting roughly 35,000 in the US and Europe, Casgevy is seen as a potential blockbuster, especially since it costs $2 million per treatment in the US. The shares are up more than 50% in the past five years, and it could be one of the best growth stocks over the coming decade.

In the fourth quarter of 2023, Crispr reported revenue of $200 million, up from just $6 million in the same period a year earlier — and Casgevy wasn’t approved in US and Europe until January and February, respectively, of this year. Crispr had net income of $98 million in the quarter, or $1.12 in EPS, compared to a loss of $103.9 million and a $1.41 loss per share in the same period a year earlier.

There are more potential applications for Casgevy and Crispr has early-stage pipeline candidates to treat autoimmune disorders, various cancers, cardiovascular diseases, and type 1 diabetes. Yes, the company, which went public with an IPO as recently as 2016, is still in its early stages, but it has succeeded where other competitors have failed in successfully launching a product based on the Nobel Prize-winning Crispr gene-editing therapy.

10. e.l.f. Beauty – Making Money From Makeup

The cosmetics company’s shares have risen more than 1,500% over the past five years while specializing in cruelty free, clean, vegan and Fair Trade Certified products.

It has posted revenue growth and an expansion of its share of the beauty product market for 20 consecutive quarters, even though the beauty industry is highly competitive. Through nine months of 2024 fiscal year, it had sales of $702.8 million, up 80% year over year. EPS in the period was $1.97, compared to $0.82 in the first three quarters of fiscal 2023.

While it has steadily increased sales, it sees growing potential internationally, which could be an important driver in the next few years. It’s the No. 1 brand in Italy, but only the No. 3 brand in the US, the No. 4 brand in Canada and No. 6 brand in Britain.

What Are Growth Stocks?

Growth stocks are shares of companies that are expected to experience above-average earnings growth and stock price increases. These companies typically are good at generating cash flow and reinvest their profits into the business to fuel future growth, rather than paying out dividends to shareholders.

Growth Stocks vs. Value Stocks

Investors who prefer growth stocks are more willing to buy stocks with high valuations, counting on the stocks’ expected future revenue growth.

Value stocks, on the other hand, are often established companies that have a long record of profitability but are currently undervalued – trading at a discount compared to what their assets or earnings might suggest.

Why Invest in Growth Stocks?

Above-average Returns

The big attraction of growth stocks is their above-average potential for delivering superior returns – mainly coming from price appreciation.

Fueled by reinvesting their profit, these companies can experience significant surges in revenue and stock price, outpacing the overall market. They are more heavily focused on growth of their top line (revenue), customer base and market share, rather than their bottom line (profit.)

Invest in Cutting-Edge Technology

Many growth stocks are disrupters of established economic sectors or are developing new innovations. By buying stock early in these companies, investors can reap the benefit of their long-term market dominance.

It takes skill, though, to spot the companies with the best potential for long-term growth. However, an element of risk-taking and a proactive attitude to bringing cutting-edge products to the market, even if demand has been yet untested, are a good sign for the future.

If a company is willing to experiment, and change course quickly if it discovers that the demand is not there, it’s more likely to find the next hit product or service, and that could put it on the path for market dominance.

Balance a Value-Stock Heavy Portfolio

Growth companies reinvest their profits into the business to develop new products and enter new markets, rather than distributing earnings as dividends. They also can help investors balance their portfolio, if they are more heavily weighted toward value stocks, or dividend stocks.

Because they aren’t meant for a quick turnaround, buying growth stocks can lead to better investment returns through long-term holds. You have to wait for your capital investment to grow in value and in the meantime, you won’t receive income from dividends.

Where to Get Growth Stock Picks and Insights

Investing in growth stocks requires more research than investing in more established, more stable companies. For further information regarding AI stock picks, we recommend checking out AltIndex.

AltIndex is a subscription-based service uses alternative data and artificial intelligence (AI) that you can use to find growth stocks. AltIndex updates its data throughout the day.

AltIndex includes web searches, customer satisfaction ratings, social media, and app downloads, to help it analyze a company. Its lists of best stocks update every half hour and also provide real-time updates on share prices. The lists use an AI score, taken from several datasets, to show which stocks are likely to make a big move and what is propelling that move.

AltIndex takes that information to compare similar stocks, using AI to find investment insights. Stocks are scored from 1 to 100, simplifying selections for investors.

AltIndex has more than 10,000 members and provides more than 100,000 stock insights and alerts each day, and has a strong win rate of 75% from its AI stock picks.

You can try AltIndex’s Starter Plan for just $29 a month and receive stock picks directly to your email, as well many other useful features.

Conclusion

Buying growth stocks can be a great way to get above-average returns in the stock market if you are willing to be patient.

Investors must realize, though, that with high-level growth comes risk as well. If you look at their price-to-earnings ratios, growth stocks can seem overpriced because investors are looking past their current earnings and instead accounting for future revenue growth.

It’s worth noting that many of today’s blue-chip stocks were once growth stocks, companies that focused more on sales than profit, plowing revenue back into the business to gain market share. The right growth stock bought at the beginning of its climb can generate great long-term wealth.

References

NVIDIA Corporation – NVIDIA Announces Financial Results for Fourth Quarter and Fiscal 2024

Li Auto Unveils What It Says Is World’s Biggest Electric Car – Bloomberg

2024-01-30_AMD_Reports_Fourth_Quarter_and_Full_Year_2023_1180.pdf (d1io3yog0oux5.cloudfront.net)

Cyber Security Market Size, Share & Trends Report, 2030 (grandviewresearch.com)

Datadog Announces Fourth Quarter and Fiscal Year 2023 Financial Results | Datadog (datadoghq.com)

Fortinet appliances remain vulnerable to critical bug, risking cyberattacks (computing.co.uk)

e.l.f. Beauty Announces Third Quarter Fiscal 2024 Results – (elfbeauty.com)

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Jim Halley

Editor

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Jim Halley

Editor

I am an experienced journalist who has also worked as an editor and writer at the Savannah Morning News, Salt Lake Tribune, USA Today, Stars and Stripes, and The Motley Fool. I spent the first half of my career in sports journalism, but in recent years have switched to writing about my other passion, stocks, particularly healthcare, real estate and consumer staples stocks. I've won numerous journalism awards from the Associated Press and state press associations and have been a judge for the Georgia Sportswriters Association. I've written one non-fiction book, Just One More Time, about Georgia Southern football, and…

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