If you want to have a good summer, consider growth stocks to buy to take home impressive returns in the long term.
These companies are expected to keep expanding and grow your money with time. Three growth stocks in particular can boom in May and beyond. Among the best-known companies, their reported strong fundamentals has helped them get buy ratings from analysts. The stock market may be volatile now. But there is no reason for you to sit out and watch until it improves. Bet on these three growth stocks for steady gains.
Alphabet (GOOG, GOOGL)
A must-buy this May, many reasons abound for investing your money in Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG). It dominates the search and advertising market. Up 27% year-to-date (YTD) and 44% in the past 12 months, the stock is exchanging hands for $177 today. It looks highly undervalued to me with ample upside potential.
The company reported impressive Q1 results with a cloud revenue of $9.6 billion, up 28% year-over-year (YOY). Further, the search revenue was up 14% to hit $46.2 billion. The YouTube ad revenue reached $8.1 billion, up 21% YOY.
Recently, the company unveiled Gemini 1.5 Pro, the longest content model for a foundational model capable of handling over 1,500 page documents. It can give strong competition to ChatGPT. And with the amount of data that the company has, it already enjoys an edge in terms of knowledge about user behavior.
Also, Alphabet is using artificial intelligence (AI) extensively, but it is not showing ads in a large number of its searches. It can easily monetize searches in the coming years.
While the stock is trading at a discount as compared to the other AI stocks, it has strong potential to grow. It has a huge runway and could make you rich.
Meta Platforms (META)
Up 35% YTD, Meta Platforms (NASDAQ:META) stock is trading at $467 today and it has soared 89% in the past 12 months. One of the best growth stocks to buy, the company has certainly bounced back from the lows of 2022 when it was trading at $99. While it has generated a solid return, the company hasn’t had a smooth ride.
The social media giant reported a strong quarter with a 27% YOY jump in revenue and a whopping 117% YOY rise in net income. It saw 3.24 billion daily active users across all its apps, and the user base saw a 7% expansion. Chief Executive Officer (CEO) Mark Zuckerberg has huge metaverse ambitions.
The company has invested a significant amount of money in the projects and it already sells virtual reality (VR) handsets and augmented reality (AR) glasses. This segment of the company is losing a lot of money, but Zuckerberg hopes it will pick up someday.
On the other hand, its advertising business is sitting strong with an average price per ad increased by 6% YOY. This segment will continue expanding in the coming years. Also, the company is integrating AI into its social media offerings to improve user experience.
Meta Platforms could become a giant social media powerhouse in this decade, and the majority of its revenue will come from advertising. Thus, the sooner you buy the stock, the higher your gains.
Morgan Stanley (MS)
Morgan Stanley (NYSE:MS) is in the recovery stage with its investment banking operations. The company already has a diversified source of income, and as the economy improves, Morgan Stanley could see improved growth. I’d recommended buying the stock when it was trading at $92.
In the recent quarter, it reported a net revenue of $15.1 billion and a net income of $3.4 billion. Its wealth management segment saw a 5% rise in net revenue while the investment banking revenue was up 16% YOY.
Its profit was up 14% YOY driven by the growth in investment banking. The management is optimistic about the segment and is aiming to grow the unit this year. Several analysts had a buy rating for the stock after the company announced results.
Exchanging hands for $99, MS stock is up 7% YTD and is very close to the 52-week high of $103. The stock could keep moving higher this month. It also pays a dividend and has a yield of 3.38%, making it attractive for passive income investors. The stock has started its upward journey, and this rally could continue as the economy improves.
On the date of publication, Vandita Jadeja did not hold (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.