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Best growth stocks to buy
As economic uncertainties loom, the search for high-quality growth stocks becomes increasingly challenging. Despite concerns of muted U.S. economic growth and potential recession risks, growth stocks have continued to outperform value stocks since the start of 2023. With interest rates at 23-year highs, investors remain optimistic that growth stocks will retain their momentum, especially if the Federal Reserve pivots to rate cuts. Here’s a closer look at CFRA analysts’ top growth stock picks, all of which have reported at least 15% annual earnings-per-share (EPS) growth over the past three years.
1. Apple Inc. (AAPL)
Apple remains a titan in the tech industry, producing the iPhone, iPad, Apple Watch, and Mac computers, along with a thriving services segment that includes the App Store, Apple Music, iCloud, and more. Analyst Angelo Zino highlights Apple’s strong margin profile, its interconnected product and service ecosystem, and the vast opportunities in artificial intelligence (AI) as reasons for its long-term appeal. Zino is bullish on Apple’s stable free cash flow and aggressive capital return program, projecting an 8% revenue growth in fiscal 2025 and 7% in fiscal 2026. CFRA maintains a “buy” rating with a price target of $260 for AAPL, which closed at $224.53 on Aug. 22.
2. Nvidia Corp. (NVDA)
Nvidia, a high-end chip designer, has been a standout growth story. The company’s fiscal first-quarter revenue surged 262% year-over-year, with net income skyrocketing by 628%. Zino points to Nvidia’s expanding total addressable market and its potential in software and AI devices as key growth drivers. He projects an astounding 98% revenue growth in fiscal 2025 and 23% in fiscal 2026. CFRA assigns a “buy” rating with a $139 price target for NVDA, which closed at $123.74 on Aug. 22.
3. Alphabet Inc. (GOOG, GOOGL)
Alphabet, the parent company of Google and YouTube, continues to dominate the online search and advertising space. The company reported 13.6% revenue growth in the second quarter of 2024, driven by a 28.8% increase in Google Cloud revenue. Zino expects Alphabet to maintain at least 10% revenue growth through 2025, fueled by AI innovations across its ad ecosystem and strong cloud services growth. CFRA has a “buy” rating with a $220 price target for GOOG, which closed at $165.49 on Aug. 22.
4. Broadcom Inc. (AVGO)
Broadcom, a global analog semiconductor supplier, is well-positioned to benefit from the AI infrastructure investment boom. Zino projects the company’s networking, switcher, and application-specific integrated circuit businesses to generate $11 billion in revenue in fiscal 2024. The integration of VMware is ahead of schedule, adding recurring software revenue that boosts margins and free cash flow. CFRA maintains a “buy” rating with a $185 price target for AVGO, which closed at $162.34 on Aug. 22.
5. JPMorgan Chase & Co. (JPM)
JPMorgan Chase, one of the world’s largest banks, has continued to deliver consistent double-digit revenue growth. Following its acquisition of First Republic Bank in 2023, JPMorgan has expanded its wallet share across various core areas. Analyst Kenneth Leon forecasts 19% revenue growth in 2024, followed by a more modest 1.1% in 2025. CFRA has a “buy” rating with a $230 price target for JPM, which closed at $216.63 on Aug. 22.
6. Visa Inc. (V)
Visa, a leader in global electronic payments, benefits from the ongoing transition away from cash. Analyst Alexander Yokum cites Visa’s expanding market presence and the growing acceptance of its cards as significant growth drivers. He projects 10% revenue growth in both fiscal 2024 and 2025. CFRA has a “buy” rating with a $310 price target for V, which closed at $267.94 on Aug. 22.
7. Mastercard Inc. (MA)
Mastercard, another giant in the credit card and payments space, reported 11% year-over-year revenue growth in the second quarter of 2024. Yokum is confident in Mastercard’s management team and its ability to drive earnings growth, outpacing revenue growth by at least 4% annually. He projects 12% revenue growth in 2024 and 13% in 2025. CFRA maintains a “buy” rating with a $560 price target for MA, which closed at $468.82 on Aug. 22.
8. Netflix Inc. (NFLX)
Netflix, a dominant force in video streaming, added 8 million paid subscribers in the second quarter, driving a 16.8% revenue growth. Analyst Kenneth Leon praises Netflix’s leadership in streaming and expects the company to continue expanding its operating margins. He projects 14.7% revenue growth in 2024 and 12.1% in 2025. CFRA has a “buy” rating with a $725 price target for NFLX, which closed at $688.96 on Aug. 22.
9. T-Mobile US Inc. (TMUS)
T-Mobile, the second-largest U.S. wireless provider, continues to outpace competitors like Verizon and AT&T. Analyst Keith Snyder highlights T-Mobile’s strong churn metrics and 5G network advantage, projecting 2.9% revenue growth in 2024 and 4.3% in 2025. CFRA assigns a “strong buy” rating with a $210 price target for TMUS, which closed at $196.44 on Aug. 22.
10. Wells Fargo & Co. (WFC)
Wells Fargo, a major U.S. bank, is focused on improving efficiency and executing share buybacks. Despite its exposure to the struggling commercial real estate market, Yokum is optimistic about Wells Fargo’s potential to return to EPS growth in 2025. CFRA has a “buy” rating with a $68 price target for WFC, which closed at $55.96 on Aug. 22.
This article is a publication of Markable News.
