Your money won’t do much good sitting in your bank account because of dismal rates on savings accounts. While there is a benefit to using certificates of deposit to get higher rates, the stock market offers more exciting returns. Most notably, those facing future industry investment opportunities.
You may not have to look any further than these top seven stocks to uncover those very future industry investment opportunities.
Palo Alto Networks (PANW)
Palo Alto Networks (NASDAQ:PANW) is a cybersecurity firm that offers next-gen cybersecurity tools. The firm continues to maintain high revenue growth while experiencing meaningful profit margin expansion. For example, the company reported 20% year-over-year revenue growth in the first quarter of fiscal 2024. Growth in remaining performance obligations outpaced revenue growth which is a good sign for future revenue figures.
Net income surged by 871% year-over-year. Continued net income growth can make the company’s price-to-earnings (P/E) ratio far more appealing. That’s the primary weakness for PANW, but long-term investors will have an easier time overlooking the current valuation. Shares trade at a 64 forward P/E ratio which can drop considerably if net income growth remains elevated.
The stock has more than doubled over the past year and is up by 367% over the past five years.
Nvidia (NVDA)
One of the top stocks seeing substantial future industry investment opportunities is Nvidia (NASDAQ:NVDA), which became a trillion-dollar company. Growth in its tech and artificial intelligence (AI) segment is still strong and helped Nvidia more than triple its revenue year-over-year in the third quarter of fiscal 2024.
Nvidia recently announced RTX Video HDR which uses AI to improve video quality. Developers can use this resource to improve the quality of games and video. Streamed videos can enhance streamed videos to 4k and offer a better experience for viewers.
That’s one of the many ways Nvidia is using artificial intelligence to give consumers and businesses better products and services. Nvidia also partnered with Amazon (NASDAQ:AMZN) to help sellers create better product listings with artificial intelligence.
Nvidia has partnered with many corporations to expand its dominance in the artificial intelligence industry. Shares are up by 219% over the past year and recorded a five-year gain of 1,587%.
Cloudflare (NET)
Cloudflare (NYSE:NET) is helping business owners protect their websites from cyberattacks. The firm serves over 30% of the Fortune 1,000 and has over 182,000 paying customers.
Cloudflare has grown rapidly since its 2010 launch and has amassed a $27 billion market cap. Even with the historical growth, Cloudflare continues to report solid revenue growth. The company exhibited 32% year-over-year revenue growth in the third quarter of 2023. GAAP net losses narrowed by 44.7% year-over-year and sat at $23.5 million.
Cloudflare is strengthening its offering with the help of artificial intelligence. Workers AI has helped Cloudflare strengthen its efforts to keep customers and users secure. Matthew Prince, co-founder and CEO of Cloudflare, mentioned in the Q3 2023 press release that the company is making more investments in AI.
“By the end of 2024, we expect to have inference-optimized GPUs running in nearly every location where Cloudflare operates worldwide—within milliseconds of every Internet user,” he stated.
Shopify (SHOP)
Shopify (NYSE:SHOP) offers e-commerce software that helps other businesses run e-commerce stores. Customers pay Shopify a monthly subscription to keep their e-commerce stores up and running.
Shopify has a Starter plan which costs $5/mo. It’s a low barrier of entry to help people get started. The company also has high-end plans for corporations. Enterprise plans can cost thousands of dollars per month.
The recurring revenue model helped Shopify deliver 25% year-over-year revenue growth in the third quarter of 2023. The company already has a 10% market share in U.S. e-commerce. Shopify is likely to further penetrate the industry and reward long-term investors. The firm also has a strong international presence based on its millions of merchants spread across over 175 countries.
Shopify has been a top-performing stock for several years. Shares are up by 73% over the past year and have gained 378% over the past five years.
HubSpot (HUBS)
HubSpot (NYSE:HUBS) is a customer relationship management tool that helps businesses communicate with their audiences and get in front of potential customers. The stock has beat the market for several years. Shares are up by 69% over the past year and have gained 269% over the past five years.
HubSpot has a vast customer base that consists of over 194,000 businesses in more than 120 countries. The company delivered 26% year-over-year revenue growth in the third quarter of 2023. A 22% year-over-year increase in HubSpot’s customer base helped fuel the company’s top-line growth.
While HubSpot has always been known for high revenue growth, the firm took a big step in narrowing its losses. The company only reported a GAAP net loss of $5.5 million. That’s much lower than the $31.4 million GAAP net loss from the same period last year.
HubSpot is aiming to generate $556 million to $558 million in revenue in Q4 2023. The midpoint implies 18.5% year-over-year revenue growth.
E.l.f. Beauty (ELF)
E.l.f. Beauty (NYSE:ELF) is a vegan makeup company that avoids unethical ingredients. The company has expanded its market share in the beauty industry and continues to post incredible revenue growth.
E.l.f. Beauty delivered 76% year-over-year revenue growth in the second quarter of fiscal 2024, with CEO Tarang Amin noting: “As we look ahead, the significant whitespace we see across color cosmetics, skincare, and international gives us confidence that we are in the early innings of unlocking the full potential we see for E.l.f. Beauty.”
The stock has already been on a tear and has rewarded many long-term investors. Elf Beauty shares are up by 175% over the past year and have gained 1,764% over the past five years. Net profit margins exceeded 15% in the third quarter and the stock’s forward P/E ratio is currently 51.
Alphabet (GOOG, GOOGL)
Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) operates in several verticals but specializes in online advertising and cloud computing. Google and YouTube generate most of the company’s revenue while Google Cloud has gained considerable market share over the years.
While Google Cloud makes up a smaller percentage of Alphabet’s business, this segment delivers higher revenue growth rates than the Google advertising segment. Alphabet has a distant lead among advertising competitors and delivered 11% year-over-year revenue growth in Q3 2023. Net income was up by 42% year-over-year.
Both of those growth rates are improvements compared to 2022 growth rates. Incorporating artificial intelligence to improve search, YouTube, cloud, and Pixel devices has helped Alphabet gain momentum.
The company has been trimming its expenses to generate higher profit margins. Alphabet is in a position to use additional capital to invest in promising long-term ventures. This approach can help the company develop an additional meaningful income stream that isn’t advertising or the cloud.
On this date of publication, Marc Guberti held long positions in NVDA, NET, and ELF. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.comPublishing Guidelines.
