Plenty of high-growth stocks have turned six-figure investors into millionaires this year. Those with a solid capital base that have invested in hyper-growth stocks in 2023 have likely seen big returns this year, as investors increasingly take a risk-on view of the markets.
For growth stock investing, investors generally have two options. Of course, there are plenty of momentum stocks driven by sentiment more than fundamentals. I’d put Nvidia (NASDAQ:NVDA) and other relatively overvalued stocks in such a bucket. Then, there are undervalued stocks that still retain significant long-term upside potential after recent selloffs. The latter option seems more appealing, offering growth opportunities with lower downside risk.
Indeed, there are a number of ways to become a millionaire in the markets (The long-standing joke that the easiest way to become a millionaire in the stock market is to start by being a multi-millionaire). However, for those looking to grow their way to long-term wealth, here are three stocks I’d consider first.
Meta Platforms (META)
Meta Platforms (NASDAQ:META) has been a relatively difficult company to handicap as of late. Despite strong revenue growth throughout the past two quarters, the company’s net income declined on a year-over-year basis across the last six months. However, the company’s earnings per share did increase throughout the past quarter, indicating a potential turnaround for Meta Platforms.
Indeed, 2023 is the so-called “year of efficiency” for the social media giant. Accordingly, following Meta Platforms’ Q2 2023 earnings report, the stock rose 7% due to an earnings beat and positive forward guidance. The various cost-cutting and re-focusing efforts Meta’s management team have put in place are paying off. Notably, Meta reported an impressive $32 billion in quarterly revenue, exceeding analysts’ expectations, and posted earnings per share of $2.98. This beat Wall Street’s estimate.
Additionally, Meta Platforms provided optimistic guidance for Q3 revenue in the range of $32 billion to $34.5 billion, above the consensus estimate of $31.2 billion. If the company is able to follow through on its profitability-focused growth plans, this is a stock that could provide big gains throughout the next five to 10 years.
Li Auto (LI)
Li Auto (NASDAQ:LI) shares continued their impressive performance, gaining around 3.5% after the company announced delivering 34,134 vehicles in the last month, marking a 227.5% year-over-year increase. The cumulative deliveries reached 173,251 vehicles by the end of July.
According to CNBC, LI rival Xpeng (NYSE:XPEV) reported delivering 11,008 vehicles. This marks a 28% increase from the previous month and its highest monthly delivery number this year. On the other hand, Nio’s (NYSE:NIO) deliveries reached 20,462 units, up 103.6% year-over-year, nearly doubling June’s tally.
Despite Nio’s strong performance, Li Auto stock came out as the clear winner, while Xpeng and Nio experienced losses of about 3% and 2%, respectively. It’s my view that the current competitive backdrop in the Chinese EV market is likely to remain. Accordingly, if Li Auto can grow its market share relative to its peers (and it appears well-positioned to do so with the launch of new EV models), this is a stock that could outperform throughout the medium-term. Chinese EV stocks are a particular focus of mine, due to the growth potential of the world’s largest EV market.
Crowdstrike Holdings (CRWD)
CrowdStrike (NASDAQ:CRWD) is a cybersecurity leader with an advanced platform combining human intervention and AI to analyze vast amounts of data. The cybersecurity titan serves more than 23,000 customers, including more than half of all Fortune 500 companies, offering customizable subscription-based modules for tailored protection.
In the latest quarter, CrowdStrike recorded revenue of $692 million, a notable 42% year-over-year growth rate. Though slightly slower than the previous year’s 61% growth. Nevertheless, CrowdStrike remains on a rapid growth trajectory, utilizing AI to enhance its cybersecurity capabilities with each instance.
CrowdStrike’s expansion into artificial intelligence with Charlotte AI holds the potential for further stock growth. Despite a high forward price-earnings ratio of 63-times, cybersecurity investors often embrace such ratios for high-growth companies. With its strong market position, robust revenue growth, and move towards profitability, CrowdStrike shows promise for solid long-term gains.
On the date of publication, Chris MacDonald has a LONG position in META. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.