3 explosive stocks to buy right now

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As of the start of 2021, it seems investors weren’t sure exactly what to do with tech stocks. Many of the big winners of 2020 gave up some of their earnings as investors turned to other areas of the economy for growth.

But dismissing tech stocks altogether right now could be a huge mistake. There are many companies that tap massive markets and build their prospects into niches. We asked three Motley Fool contributors what titles they think could experience explosive growth over the next few years and they came back with Square (NYSE: SQ), NVIDIA (NASDAQ: NVDA), and The commercial counter (NASDAQ: TTD). Here’s why.

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Two flourishing ecosystems are at the origin of this explosion

Brian Withers (square): Square has come a long way since its inception in helping sellers collect credit card payments in person with its plug-in device for mobile phones. Today, the company has two flourishing ecosystems that stimulate its growth. The vendor segment has grown into a rich suite of 30 connected apps and services, but its burgeoning Cash App business is no slouch either. The Cash app enables person-to-person payments, banking-like services, and the ability to buy or sell stocks and Bitcoin (CRYPTO: BTC).

These two ecosystems are flourishing today. Below is a table of recent results showing its tremendous year-over-year growth. The Cash App business has overtaken the seller segment in terms of overall gross margin for the first time in its history. This is not surprising given that this segment has seen triple-digit percentage growth over the past five quarters. The seller segment experienced headwinds during the pandemic as physical sellers saw their traffic decline and had to quickly create omnichannel operations. But as the economy reopens, these sellers should see increased traffic and hopefully increase their sales.

Metric

T1 FY2020

T4 FY2020

T1 FY2021

Change (QOQ)

Change (YOY)

Gross margin of the seller

$ 356 million

$ 427 million

$ 468 million

ten%

32%

Gross profit of the Cash application

$ 183 million

$ 377 million

$ 495 million

31%

171%

Overall gross margin

$ 539 million

$ 804 million

$ 964 million

20%

79%

Data source: Square. QOQ = quarter to quarter. YOY = year after year. Note: Bitcoin sales revenue tends to skew revenue growth figures, so Square’s management team prefers to focus on the gross margin of the ecosystem.

The company has continuously improved its platform for sellers. Recently, she launched Square Messages, a service that makes it easy for sellers to communicate with their customers. In addition, he helped facilitate the Paycheck Protection Program for over $ 500 million in loans to 57,000 small businesses. Some small businesses may not survive the pandemic, but Square is seeing its midsize vendors thrive. Those with over $ 500,000 in annual sales grew at a 43% year-over-year rate in the last quarter, twice as fast as smaller sellers.

Square is designed to be there for its salespeople as they start to see the benefits as more and more consumers step out of the house. For investors, this stock has been explosive, nearly doubling in the past year. But his race is far from over. Get on board this winning growth company with a few actions today and your future will thank you.

A chip on a motherboard.

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So many ways to win

Danny Vena (NVIDIA): There is no doubt that NVIDIA has been one of the top performers of the past decade. The stock has gained more than 5,300% in the past 10 years – and those returns aren’t limited to the distant and dusty past. NVIDIA has gained over 85% in the past 12 months alone. Given these explosive returns, it can be easy to assume that the best gains are already behind, but the best may yet be yet to come for NVIDIA.

The company is best known for its cutting edge gaming chips. Its graphics processing units (GPUs) are the number one choice for hardcore gamers around the world, with an 81% share of the discrete desktop market. This led to a record first quarter revenue of $ 2.76 billion for the games segment, up 106% year-over-year. That alone is reason enough to buy the stock, but that’s just the start of NVIDIA’s opportunity.

Another area of ​​growth for the company is the proliferation and accelerated adoption of cloud computing. NVIDIA is the leading supplier of GPUs for artificial intelligence (AI) and data centers, and its processors are the industry standard for each of the largest cloud providers, including Amazon Web Services, Alphabetfrom Google Cloud, and Microsoft‘s Azure, to name a few.

Its industry leadership position led to spectacular results in its data center segment, which also achieved record growth in the first quarter. Revenue of $ 2.05 billion jumped 79% from the previous year quarter.

Considering the current secular trends in gaming, cloud computing, and AI, NVIDIA has several ways to win. The company has also taken the pulse of a number of other trends, each of which could be a future engine of growth.

NVIDIA has a growing opportunity in the professional visualization arena, offering new capabilities to engineers, graphic designers and designers. NVIDIA has also developed an advanced autonomous driving system and has partnered with some of the major automakers to harness the potential of autonomous driving. There are further growth opportunities in robotics, genomics, and computational biology, all of which harness the power of NVIDIA GPUs.

Given the company’s history of explosive growth and the potential for even greater earnings, NVIDIA offers investors a compelling opportunity that extends far into the future.

A person is looking at his computer.

Image source: Getty Images.

Advertising is alive and well

Chris Neiger (The Trade Office): The Trade Desk platform makes it easy for businesses to purchase advertisements to be placed on the Internet, mobile devices and even smart TVs. As you can imagine, all of these ad markets are growing very rapidly and they are part of a larger digital ad market that will be worth $ 278 billion by 2024.

One of the company’s biggest opportunities over the next few years could be smart TV advertising. Research firm eMarketer estimates that 60% of U.S. advertisers plan to switch from traditional linear TV to smart TV and streaming services this year.

Some investors have expressed concern about the state of the online advertising industry as Google plans to stop using online trackers, called cookies, for online advertising. But The Trade Desk anticipated this change and created an anonymous identifier, called Unified ID 2.0, which gives consumers more control over how their data is shared while allowing businesses to display ads based on the preferences of consumers. users.

A growing list of companies, including Snowflake, Nielsen, Oracle, and the Washington Post are starting to accept Unified ID 2.0, making The Trade Desks’ innovation a likely success.

The Trade Desk has already been a huge success for investors, with its share price exploding by 670% over the past three years. And the company’s strong position in the digital advertising space, along with the growing acceptance of its cookie alternative, should help propel this business further in the years to come.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.


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