Finding the “best” growth stocks to buy really is a subjective task, isn’t it? What’s considered to be the best for one investor isn’t necessarily the same for another. That’s because while investors can objectively measure which stocks did better than others over a given time frame, it’s also true that the stock that outperformed could have gone on an insanely volatile ride to get there. That may not be the game every investor wants to play.
I’m one of those investors. Thus, in this article, I’m going to highlight my three top growth stocks to buy now for those with a similar disposition to mine. That is, investors who are a little more defensive in nature, but still want their growth investments to do what they’re supposed to – grow, and grow large, over time.
The following three companies are expected to grow at an above-average rate compared to their industry or the overall market. Investing in growth stocks can resemble nurturing a young tree. With time and the power of compound interest, small initial investments into companies like these can blossom into significant wealth.
Without further ado, let’s dive into why these three particular stocks may be excellent options for the investor with average risk tolerance to consider right now.
Key Points About This Article:
- Not all growth stocks are equal, and I’d argue that the three companies on this list provide the right mix of growth and defensiveness for the average investor.
- Here are my top three growth stock picks for those seeking to outperform the market in 2025.
- If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.
Amazon (AMZN)
Amazon (NASDAQ:AMZN) is a top e-commerce and cloud player that has seen rather impressive growth for a very long time. Importantly, the company has been able to grow its margins over the years as well, providing investors with some of the most impressive returns over the past two decades of any stock in the market.
The thing is, I think this growth can continue. Much of this thesis centers on the secular growth tailwinds supporting the global cloud market, of which Amazon is a key component. The leader in U.S. e-commerce and cloud services, Amazon is well-positioned to ride a range of tailwinds to new highs over the long-term, particularly as the company continues to explore new ventures in high-growth segments of the market like AI, healthcare and robotaxis over time.
Amazon’s e-commerce margins remain thin, but the company’s profitability is really driven by high-margin ventures like Prime subscriptions (generating $43 billion annually) and the company’s core cloud business. Online advertising brings in quite the hefty sum, at $54 billion. So, combined, these two business segments provide investors with around $100 billion in earnings potential, independent of e-commerce profits. In other words, Amazon is so much more than the e-commerce company most users know the firm to be.
From a margin perspective, AWS really drives the boat forward, with a 36% margin on $100 billion in revenue. With AI-driven cloud spending expected to grow 22% annually through 2030, AWS continues to be a winning proposition for long-term investors looking to bet on the AI revolution in a smart way. Indeed, some analysts project AWS could surpass $100 billion in earnings by 2030, and I wouldn’t put it past Amazon to do so. These assumptions provide for steady margins and market share, and just continued performance over the course of this decade.
In my view, there are few AI plays better than this one – Amazon would be a top pick of mine for investors seeking a top growth stock to buy and hold for a decade or longer from here.
AstraZeneca (AZN)
AstraZeneca PLC (NASDAQ:AZN) is a leading biopharmaceutical firm, and I think this discussion should start there. The big pharma space, at least in the U.S., is a very insulated sector with a few firms grabbing a significant share of the profits. Companies like AstraZeneca continue to outperform on a risk-adjusted basis for this reason – their steady cash flows and dominant market positions in key areas lead to moats (or durable competitive advantages) which are hard for competitors to overcome.
In AsstraZeneca’s case, the company excels in oncology, CVRM, and respiratory therapies. Key growth drivers include rising demand for the company’s key drugs Tagrisso, Imfinzi, Calquence, and Farxiga, alongside expanding rare disease treatments Ultomiris and Soliris.
With that said, AZN stock has been a relative under-performer on a year-to-date basis, rising only 6% at the time of writing. This has come due to the company’s recent earnings report which highlighted disappointing 19% sales growth to $39.2 billion and 21% EPS growth. Larger concerns appear to be around reports of a fraud investigation in China, which happens to be a key market for the U.K.-based company. But trading at less than 14-times earnings, there’s a rather clear value case to be made for this growth stock which has plenty of drivers on the horizon for investors to get excited about.
Perhaps the key catalyst on the horizon I think is worth pointing out is the company’s AZD5004 drug, an oral GLP-1 treatment differentiating this particular obesity offering from injectable options like Ozempic. In Phase 1 trials, AZD5004 showed 5.8% weight loss at a 50mg dose, positioning it as a promising alternative.
AstraZeneca continues to provide revenue growth in the high-teens and will likely see revenue growth acceleration (and bottom line earnings growth surge) if the company can gain key approvals for its oral GLP-1 medication. We’ll see, but this is a stock that’s on my radar right now, and I’d encourage investors to consider this name as well.
Taiwan Semiconductor (TSM)
Last, but certainly not least, we have Taiwan Semiconductor (NYSE:TSM). This chip making giant may not be as well known as the current king of the chip market, Nvidia. However, it’s worth pointing out that Nvidia, AMD, and others design advanced chips for AI, but much of their manufacturing is outsourced to Taiwan Semi at the end of the day.
TSM serves most of the notable mega-cap companies which use large quantities of chips, and as a key foundry for the likes of Nvidia, AMD and others, will continue to see strong growth driven by macro trends in the overall semiconductor sector.
Thus, as many view Nvidia as the “picks and shovels” play of the semiconductor or AI race, I think of Taiwan Semi as the higher-level picks-and-shovels play overall. This is a company that should more broadly benefit from secular growth trends, and with increasing production state-side via the company’s large investments in three Arizona plants, the company is well positioned to benefit from any geopolitical climate in years to come. That thesis has only recently changed, but it’s one that’s ebbing overlooked by the market right now in my books.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
