3 unstoppable growth stocks to invest $ 500 in right now
“The trend is your friend.”
You’ve probably heard the adage of investing before. It is generally used in reference to the purchase of stocks in a definite upward phase.
However, there is an even more important application of the saying for long term investors. Some broader trends that are unrelated to a stock chart nonetheless have the potential to create massive tailwinds for certain stocks.
Identifying such trends and buying stocks of the corresponding market leaders offers an opportunity to realize significant returns over time. Here are three unstoppable growth stocks to invest $ 500 in right now.
Arguably, no trend could affect our world as much as the adoption of artificial intelligence (AI). Technology is already becoming ubiquitous in businesses and homes. Nvidia (NASDAQ: NVDA) ranks among the best AI stocks you can buy right now.
Nvidia’s graphics processing units (GPUs) are widely used in data centers to power AI applications. The company generated $ 2.37 billion in data center revenue in the second quarter, or about 36% of its total revenue. Its momentum in this area could accelerate.
Another AI application is not yet a huge source of revenue for Nvidia. However, it could be the next big thing for the business. Nvidia reported second-quarter sales of $ 152 million for its automotive unit, which is developing AI technology for autonomous vehicles. The autonomous driving market is still in its infancy. Look for Nvidia’s automotive platform to become a much bigger engine of growth over the next few years.
Of course, gaming is the main trend that has fueled Nvidia’s remarkable rise. The next frontier of gaming for the company could be the Omniverse, a virtual reality metaverse that goes beyond gaming. Nvidia CEO Jensen Huang recently predicted that the Omniverse and the Metaverse would be “news. economy larger than our current economy “. And Nvidia is well positioned to be a leader in this area.
Another important trend that continues to gain momentum is the adoption of digital payments. Several companies are and will benefit from this trend. You can put Square (NYSE: SQ) high on the list.
For years, Square was best known for its ecosystem of sellers. The company’s payment processing platform is particularly popular with small businesses. Square, however, has steadily made inroads with large corporations. It has also broadened its offering for sellers to the point that its ecosystem is very sticky.
Today Square is equally well known for Cash App. The fast growing platform supports money transfer as well as stock purchase and Bitcoin. In the second quarter, Cash App generated almost as much gross margin for Square as its ecosystem of sellers.
The stock can seem very expensive, with stocks trading at 119 times expected earnings. However, Square’s desirability is well worth the price. The company is targeting a $ 160 billion market. Its current market capitalization is less than $ 120 billion.
There’s another trend that you might not hear as much about. The possession of domestic animals is increasing. The COVID-19 pandemic provides an additional catalyst as more people are working from home (and may spend more time with their pets). One of the main beneficiaries of this trend is Trupanion (NASDAQ: TRUP).
Trupanion ranks among the leading providers of medical insurance for cats and dogs in North America. The company insures more than one million pets in the United States and Canada.
Other companies are also competing in the pet insurance market. However, Trupanion has a big competitive advantage with its software which supports payment to vets within minutes of payment.
Currently, only about 1% of pets in the United States and 2% of pets in Canada are covered by insurance. Market penetration is much higher in Europe. As the North American market grows, Trupanion is expected to be a big winner.
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! Questioning 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.