The past decade and a half have truly been incredible for investors. Most could have chosen from a list of top-performing growth stocks and done just fine for themselves. Many of the largest and what many consider the “best” growth stocks have outperformed smaller counterparts, which isn’t usually the case.
In recent months, the stock market environment has been much more turbulent than in the past. Volatility has picked up as various macro forces continue to shift, and global dynamics remain in flux.
However, many analysts remain optimistic that top-performing growth stocks will continue to outperform over the long term. A number of the companies on this list are widely regarded as buys and have been for a long time. They’re just picks I tend to agree with on a consensus basis.
Without further ado, let’s dive in!
Amazon (AMZN)
Although it’s difficult to predict stock movements, Amazon’s (NASDAQ:AMZN) stock price has historically correlated with its operating profit. This e-commerce giant’s stock generally peaks when its operating profits increase and falls when they decline. That makes a strong fundamental case for buying in times like this when Amazon sees strong fundamental growth.
During 2024’s first half, Amazon’s operating income surged 141% year-over-year, marking a new record peak. Most of the profit came from Amazon’s Web Services (AWS). The segment has contributed 84% of its second-quarter operating profit. It is important to consider Amazon’s performance, especially when forecasting its profit. With AWS being a leading cloud platform, industry forecasts suggest annual growth between 15% and 21% through 2028. The fundamental trends certainly point in the right direction for long-term investors.
Amazon’s growth story remains strong despite recent market volatility and disappointing Q2 earnings. Analysts from Morgan Stanley (NYSE:MS) and JPMorgan (NYSE:JPM) maintain positive ratings on AMZN stock, noting the company’s long-term potential. Despite a 15% stock drop this month and rising e-commerce competition, Amazon’s dominance suggests now is a prime time to invest.
Oracle (ORCL)
Oracle (NASDAQ:ORCL) stock has surged 21.3% year-to-date after a slow 2023 despite recent earnings misses. Boosted by a strong backlog and AI deals, Oracle’s recent stock dip presents a buying opportunity. Its advancements in AI and cloud services have shown strength and increases, making ORCL stock worth adding.
Oracle’s balance sheet showed $131.7 billion in liabilities against $19.4 billion in total receivables and cash. That’s a rather large discrepancy, which could lead some investors to look for other more fundamentally sound options in the tech space. However, despite this large shortfall, Oracle’s $363.9 billion market cap and ability to raise capital over time do provide a buffer.
With debt currently 3.6 times its EBITDA and interest expenses covered 5.1 times by EBIT, Oracle’s leverage is manageable, provided it maintains strong EBIT growth over time. That’s to say nothing of the company’s recent layoff announcements, which should bolster efficiency and improve these metrics meaningfully over time.
In recent news, Oracle and AT&T (NYSE:T) have teamed up to enhance 5G and IoT integration, incorporating AT&T’s network APIs into Oracle’s Enterprise Communications Platform. Despite 5G’s underwhelming impact compared to its hype, the partnership aims to improve IoT connectivity through Oracle’s industry cloud solutions, offering unified management of IoT devices. This collaboration is expected to benefit large enterprises and global organizations by streamlining IoT provisioning in the cloud.
Byd (BYDDF)
BYD (OTCMKTS:BYDDF), often dubbed the “Tesla (NASDAQ:TSLA) of China,” briefly surpassed Tesla as the world’s top EV maker. Despite Berkshire Hathaway’s (NYSE:BRK-A) (NYSE:BRK-B) typical tech aversion, the Warren Buffett-led giant holds 6% of the company’s outstanding float, a move praised by late Vice Chairman Charlie Munger. Initially a battery supplier, BYD’s shift to EVs leveraged its battery expertise, which is now complemented by vertical integration for cost advantages. With a 35% market share in China and trading at 21 times earnings, BYD appears poised for further growth.
The company leads the global EV market with an 18% share and is the second-largest power battery producer. Its power capacity and storage grew 35% over the past year. Expanding aggressively into international markets, BYD sold 26,995 vehicles abroad in June. In Q2 2024, the company sold nearly 1 million new energy vehicles, up 58% from the previous quarter.
BYD’s international sales surged 156% in June 2024, with a 58% increase in Q2 new energy vehicle sales. Despite robust July sales, BYD’s U.S. stock fell 3.8% due to market concerns. Uber’s deal with BYD will add 100,000 EVs to its platform in select regions, enhancing global EV adoption. Backed by Warren Buffett, BYD remains a strong Chinese EV stock choice.
- Finding the best of the best in terms of top-performing growth stocks is easier said than done.
- Amazon (AMZN): Despite market volatility and disappointing recent earnings, the company’s strong growth potential is hard to match, given its size.
- Oracle (ORCL): With additional partnerships in the cloud and IoT sectors, this is a growth stock many may be overlooking right now.
- BYD (BYDDF): Given China’s quick adoption of EVs, the world’s largest EV maker could be poised for much greater growth.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.