Investing

3 Top Growth Stocks to Buy in February

Chris MacDonald

Published: February 8, 2025 9:57 am

Growth stocks often outperform the market over the long term due to their potential for significant revenue and earnings expansion. Companies with above-market growth rates typically reinvest their profits to fuel further growth, leading to higher future cash flows and valuation premiums which can hold up over time. Indeed, investors who positioned their portfolios with a growth tilt over the past decade and a half have outpaced most investors with 80/20 or 60/40 portfolios, and there’s reason to believe this trend can continue.

Of course, valuation multiples in most markets are becoming stretched, with the U.S. market in particular at levels most investors would call expensive. However, these multiples reflect optimism about the ability of these growth stocks to continue to grow faster than the market and attract considerable investor attention and capital, further driving up their valuations.

Investors seeking portfolio growth often benefit from exploring diverse stocks. While AI remains a hot investment trend for 2025, other sectors also hold promise. Here are three growth stocks poised for strong ROI in the coming years.

Key Points About This Article:

• These three growth stocks look well-positioned to continue to surge in February and through the end of the year.
• While valuations are becoming stretched in the overall market, growth investors focusing on companies with top-tier fundamentals may outperform.
• 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.

Meta Platforms (META)

Meta Platforms (NASDAQ:META) is among the most dominant social media giants growth investors can put in their portfolios, with a rock-solid business providing growing cash flows over time that’s hard to beat. Meta’s core business is insulated by its other high-margin businesses, including messaging and digital advertising, which have been overlooked by investors in the past.

Indeed, Meta’s core social media platforms (Facebook, Instagram, WhatsApp, and Threads) excel at engaging users and targeting ads. Accordingly, for those looking to ride the robust tailwinds in the digital advertising world

But Meta has seen accelerated growth of late thanks to AI, which Meta is using to help advertisers boost ad conversions. The company’s clientele have reported an impressive 7% increase through AI-powered image generation. The company envisions AI assistants integrated into future tech like smart glasses, positioning itself for sustained success.

Case in point, Meta’s Instagram generated nearly $71 billion in ad revenue last year. Threads rapidly grew to 275 million daily users, while AI-driven recommendations increased Facebook and Instagram engagement by 8% and 6%, respectively. Impressively, Meta’s ARPP outperformed competitors, highlighting its strong digital ad strategy.

These results drove impressive results this past quarter, with Meta reporting $40.6 billion in revenue, a 19% year-over-year increase, with 97% coming from digital ad sales. The company maintained high efficiency, with 80% gross margins and 43% operating margins, generating over $52 billion in free cash flow in the past year. This strong financial position enables Meta to enhance shareholder value through dividends, stock buybacks, debt reduction, and acquisitions, solidifying its role as a portfolio cornerstone.

Coinbase (COIN)

Coinbase Global (NASDAQ:COIN) surged more than 40% in 2024, fueled by Bitcoin’s 119% rise and growing crypto interest. USD Coin (USDC) adoption also boosted Coinbase, with its market cap climbing 76% to $44 billion, reflecting increased demand for stablecoins.

Coinbase reported a 99% year-over-year revenue increase for the first three quarters of 2024. This strong revenue growth wasn’t contained to the top line, with Coinbase’s net income surging to nearly $1.3 billion, largely driven by crypto investment gains. With retail trading volume surging more than 200%, enterprise revenue grew due to its trusted reputation. I think it’s also worth pointing out that Coinbase remains the centralized trading platform of choice for institutional investors as well, serving as custodian for 17 of 20 approved crypto ETFs. So, as more capital continues to flow into the crypto sector, Coinbase should remain a key beneficiary of these trends.

Overall, I think Coinbase is well-positioned to benefit from an increasingly favorable regulatory environment anticipated under a pro-crypto Trump administration. This catalyst alone could enhance the company’s  market leadership and operational growth. For those bullish on a company with plenty of upside potential (particularly if it exceeds earnings next week), this is a stock to at least keep on the radar moving forward. 

Shopify (SHOP)

Shopify (NYSE:SHOP) powers the online stores of millions of businesses (primarily small and medium-sized enterprises), remaining the e-commerce platform provider for most companies in the overall market. For those bullish on the long-term growth trajectory of online finance, Shopify remains a top choice of mine in this current market.

After navigating pandemic-driven growth and subsequent scaling adjustments, the company has quickly regained profitability and is seeing its stock price recover. That said, I think further recovery could be ahead, given the strength of the company’s recent earnings. 

Shopify exceeded Q3 expectations with 26% revenue growth to $2.1 billion and a 46% rise in non-GAAP earnings to $0.35 per share. The company anticipates similar growth in Q4, driven by its comprehensive commerce platform. Shopify’s software enables merchants to manage digital and physical sales channels, while offering services like payments, marketing, logistics, and tools for B2B and cross-border commerce.

Shopify is set to release its Q4 earnings in short order, with RBC Capital Markets expecting results to exceed consensus estimates due to strong gross merchandise volume and margin growth. Despite potential seasonal conservatism in its Q1 outlook, RBC sees any post-earnings dip as a buying opportunity. Analysts generally continue to hold consensus buy ratings, and until something changes, I think that’s the right angle to take on this top growth stock.