Investors on the lookout for top stock picks in August have come to the right place. Shares of a number of high-flying growth stocks have continued to surge higher, as investors look past macro concerns such as inflation (related to tariffs), and interest rate expectations continue to come down.
Of course, we’ll have to see how the macro environment evolves from here. But for now at least, growth investors who have stuck with their guns and continued to hold through the recent volatility we’ve seen have largely come out ahead.
Let’s dive into three top options for growth investors looking to capitalize on this rally continuing. These are companies I think are among the most solid long-term growth bets in the market, though that’s not to say there’s no risk with holding such names. Indeed, if we do get a pullback and valuations compress, these are stocks that carry risk. But at this point in time, I like these companies’ abilities to be able to grow into their future multiples.
Figma (FIG)
One of the hottest IPOs of this year, Figma (NASDAQ:FIG) has surged into the spotlight. Opening at an IPO price of $33 per share, Figma’s stock price surged to more than $140 per share before falling toward the $80 level at the time of writing.
Now, that’s still good for a return of around 240% for investors who were able to get in on the IPO. That said, given how oversubscribed this IPO was, and the fact that this early-stage AI company is already worth around $40 billion, it stands to reason that investors feel they have an opportunity to invest in something today that could eventually be a $1 trillion market capitalization holding.
I’m of the belief that this is certainly possible. That is, if the company can keep up its stellar growth rate.
With recent quarterly earnings showing stellar revenue growth ($228.2 million, up 42% year-over-year) and positive net income of nearly $45 million (rare for a company at this stage of its development), there’s a lot to like about the long-term trajectory Figma is on. As more company seek AI-powered tools that can unlock even more growth, Figma’s SaaS business model should become an essential piece of the strategic portfolio for thousands of companies in the U.S. and around the world.
Meta Platforms (META)
Another top growth stock I continue to pound the table on is Meta Platforms (NASDAQ:META).
What’s funny about Meta is that this was (and still is) an absolute behemoth in the social media space. The company’s pivot into the metaverse in the post-pandemic era was short-lived. But a more recent pivot into the world of AI has provided the latest catalyst to take META stock to a new all-time high and a market capitalization of nearly $2 trillion.
Many investors may be right to be skeptical of just how high can META stock climb – after all, trees don’t grow to the sky. That said, Meta is a company that’s clearly courting some very powerful talent in the world of AI, looking to build a juggernaut of sorts in this space. With its deep pockets, Zuckerberg and Meta’s management team have clearly made investing in the AI revolution a top priority.
The company’s growth in its core business remains strong, with daily active users reaching nearly 3.5 billion in June (an increase of 6%). Of course, there are only so many people on the planet, so monetization is as important as ever for Meta. On this front, the company continues to kill it, driving its forward price-earnings ratio in the low 30s.
I think Meta’s earnings growth trajectory makes its current valuation more than reasonable. This is a long-term holding I’d suggest investors are likely best served holding onto and waiting patiently for more earnings beats to roll in.
Amazon (AMZN)
Last, but certainly not least on this list of growth stocks that look like solid buying opportunities in August, is Amazon (NASDAQ:AMZN).
Shares of the e-commerce retailer have been on a tear of late, with AMZN stock up more than 30% on a year-over-year basis. However, this is a company that hasn’t seen the sort of price appreciation some investors expected, considering where the stock was trading in February.
I’m not going to sugar coat it – a 30% gain in a year is some great compounding, no matter the company. But given Amazon’s position in the AI race, one might be correct in questioning whether the market is getting it wrong with valuations (i.e. are the likes of Figma and Meta overvalued relative to Amazon)? We’ll have to see.
Aside from the company’s numerous AI integrations and growth opportunities, Amazon continues to kill it on the AWS (cloud) side of its business, with operating income up more than 30% year-over-year this past quarter. Another earnings beat saw the company’s e-commerce segment grow 11% over the same time frame, with advertising also seeing 22% growth.
Simply put, Amazon has a plethora of growth catalysts investors simply can’t ignore. This is one of those stocks to put in your portfolio and never sell (that’s my view at least).
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