Let's face it: 2023 has been all about the growth stocks. If you need proof, compare the year-to-date performances of the Vanguard Growth ETF and the Vanguard Value ETF.
As you can see, it's a blowout. The growth ETF is up by almost 23%, while its value-oriented cousin has slumped by about 2%. With that in mind, let's have a look at three growth stocks that have been doing well in the near term that are also long-term buy-and-hold candidates: CrowdStrike Holdings(NASDAQ: CRWD), AlignTechnology(NASDAQ: ALGN), and Nvidia(NASDAQ: NVDA).
1. CrowdStrike Holdings
CrowdStrike is one of the world's leading cloud-based cybersecurity vendors. It operates using a software-as-a-service (SaaS) subscription-based model, and leverages machine learning and artificial intelligence to detect threats while protecting client systems and data.
Founded in 2011, and debuting on the market via an initial public offering in 2019, CrowdStrike is still in the early innings of its lifecycle. Its trailing-12-month revenue was $2.2 billion -- however, that metric is surging. Revenue growth hit 48% year over year in its most recently reported quarter (which ended Jan. 31).
Similarly, CrowdStrike's client base is rapidly expanding. The company added 1,873 net new clients during that quarter, bringing its total to 23,019.
Over the long term, cybersecurity remains a massive secular growth story. As more businesses move their digital operations to the cloud -- and more employees work remotely -- the need to secure data, endpoints, and networks will only grow. CrowdStrike appears poised to grow right along with the need for better, faster, and more intelligent cybersecurity.
2. Align Technology
Align Technology is the maker of Invisalign -- a teeth-straightening treatment that uses clear, removable aligners rather than traditional braces. Align's core business -- aligner sales make up 82% of its revenue -- is resuming an uptrend after a slight downturn in 2022. Much of that decline can be blamed on the pandemic, which pulled some demand for its offerings forward into 2021.
Now, with the pandemic-influenced outlier years of 2020 and 2021 in the rear-view mirror, Align looks set to return to double-digit percentage revenue growth next year. Analysts expect the company to grow sales by 5% in 2023 and 11% in 2024 as it expands internationally and opens a new factory in Poland.
That said, Align isn't for every investor. Shares trade at a rich price-to-earnings multiple of 73. That's about triple the S&P 500's average multiple of 24. Nevertheless, long-term investors should consider Align. The company is well-positioned to benefit as more and more patients -- domestically and abroad -- opt for its aligners over traditional braces.
Nvidia is a breakout growth stock that long-term investors should drool over. The company makes advanced graphics and mobile processors -- hardware used in everything from high-performance computing data centers to gaming devices to mobile phones.
While Nvidia got its start making graphics processing units (GPUs) for video game consoles and personal computers optimized for gaming, the majority of its revenue (56%) now comes from its data center segment. That's because the computational power and speed that Nvidia's GPUs offer is exactly what today's AI, machine learning, and data analytics systems require.
What's more, the company's Hopper GPUs (introduced last year) could be considered the world's most powerful GPU, and are used in quantity to power supercomputers and AI applications for Microsoft, Amazon, and MetaPlatforms, among others. At any rate, analysts expect Nvidia's sales to grow rapidly in the coming years. Revenue is forecast to rise 12% this year and a further 25% next year.
On the flip side, Nvidia isn't cheap. Shares trade at an astronomical price-to-earnings ratio of 181. For many investors, that's simply too expensive a valuation to buy. However, for investors willing to stay the course through the inevitable volatility and build a position slowly over time, Nvidia looks like a solid long-term investment.
10 stocks we like better than Nvidia
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Nvidia wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of May 15, 2023
Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jake Lerch has positions in Amazon.com, CrowdStrike, and Nvidia. The Motley Fool has positions in and recommends Align Technology, Amazon.com, CrowdStrike, Meta Platforms, Microsoft, Nvidia, Vanguard Index Funds-Vanguard Growth ETF, and Vanguard Index Funds-Vanguard Value ETF. The Motley Fool has a disclosure policy.