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Surging Momentum: 3 Growth Stocks to Buy Now (NU, SPOT, PLTR)
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The current market environment is exceptionally strong, offering fertile ground for growth stocks with compelling fundamentals. Stocks like Nu ((NU - Free Report) ), Spotify ((SPOT - Free Report) ), and Palantir ((PLTR - Free Report) ) are perfectly positioned to capitalize on this momentum.
These stocks not only boast impressive growth forecasts and powerful momentum, but also hold top Zacks Ranks, further reinforcing their potential for continued outperformance. As these companies ride strong industry trends and demonstrate robust earnings growth, they present exciting opportunities for investors aiming to tap into the next leg of this market rally.
Image Source: Zacks Investment Research
Nu is a High-Growth Fintech Stock
Nu is one of the most exciting stocks in the market today, experiencing tremendous growth like a startup and successfully transitioning to a highly profitable company. Nu is a leading fintech company that operates primarily in Latin America, with a strong presence in Brazil, Mexico, and Colombia. It is best known for its digital banking platform, Nubank, which offers a wide range of financial services, including digital credit cards, personal loans, and investment products.
Nu stock is pushing new all-time highs this week on the heels of an impressive quarterly earnings beat. Sales in the quarter showed a 77% year-over-year (YoY) increase demonstrating its exceptional growth rate. But even more impressive is its continued growth in profitability. In the chart below we can see that over the last year, net margins have inflected meaningfully positive contributing to investors interest in the stock.
Image Source: Zacks Investment Research
Nu also has a Zacks Rank #2 (Buy) rating, reflecting upward trending earnings revisions.
What is especially compelling about Nu is its valuation. Now that the company is showing regular profits, it enjoys a very reasonable price, especially for its growth estimates. NU is trading at a one year forward earnings multiple of 35.2x and has earnings per share (EPS) growth forecasts of 51.8% annually over the next three to five years. That means it has a PEG ratio of just 0.68, which is a discount based on the metric.
Image Source: Zacks Investment Research
Spotify Stock Soars on Earnings Revisions
Music streaming giant Spotify, is another high-growth stock that continues to ride powerful buying momentum. At the most recent quarterly meeting, Spotify shared that revenue grew 21% YoY, gross margins reached 29.2% and net new subscribers were up 7 million, 1 million above estimates.
Spotify also has a Zacks Rank #1 (Strong Buy) rating, reflecting upward trending earnings revisions. Analysts have unanimously increased earnings estimates across timeframes. FY24 earnings estimates have been raised by 27.7% in the last two months and FY25 by 21.2% in the same period.
Image Source: Zacks Investment Research
Today, Spotify has a one year forward earnings multiple of 54.6x and a one year forward sales multiple of 4x. Considering SPOT is growing its sales faster than most companies, I find it quite interesting that based on forward sales, it is cheaper than the broad market.
Image Source: Zacks Investment Research
Palantir is a Top AI Stock
Palantir is yet another high-growth stock that has put up impressive returns and has a very promising outlook. At its quarterly earnings report last Monday afternoon, Palantir posted a strong period, beating both top and bottom-line estimates. Customer count grew 41% YoY, revenue grew 27% and adjusted earnings per share (EPS) grew 80% YoY.
Furthermore, Sales over the next two years are projected to increase over 20% annually and EPS are forecast to grow 26.8% annually over the next three to five years. The company also currently boasts a Zacks Rank #2 (Buy) rating.
Over the last month, analysts have unanimously bumped up earnings estimates by as much as 12.5%.
Image Source: Zacks Investment Research
Palantir also enjoys an advantageous position in the Artificial Intelligence arena. Palantir's Artificial Intelligence Platform (AIP) is designed to bring the power of AI to enterprise operations, allowing organizations to make informed, data-driven decisions quickly. AIP integrates machine learning (ML) and AI technologies with Palantir's existing data platforms like Foundry and Gotham, providing seamless deployment of AI solutions at scale.
The platform enables users to build, train, and deploy AI models using their data, making it easier to solve complex problems across industries. It emphasizes security, governance, and interpretability, ensuring that AI-driven decisions are transparent and accountable. Palantir's AIP is particularly strong in environments where data is sensitive, such as government, defense, and critical industries.
Notably, AIP allows non-technical users to interact with AI models without needing deep technical expertise. This democratization of AI can drive operational efficiencies and unlock new capabilities across various sectors.
While Palantir enjoys strong growth rates and huge potential in the AI and enterprise software space, investors must pay up to get the exposure. PLTR is currently trading at an exceptionally high relative valuation. At nearly 26x forward sales, Palantir is among the richest stocks of its size.
Image Source: Zacks Investment Research
Final Thoughts
In this strong market environment, growth stocks like Nu, Spotify, and Palantir present compelling opportunities for investors. Each of these companies has a clear path for continued growth, driven by strong industry trends and robust financial performance. With top Zacks Ranks backing them, they demonstrate both momentum and resilience in their respective markets.
However, while the potential for future gains is evident, investors should also remain vigilant and prioritize risk management. Valuations, particularly in high-growth stocks like Palantir, may appear stretched, and market corrections can happen unexpectedly. A balanced approach, combining confidence in these companies' long-term prospects with careful timing and diversification, can help investors navigate any bumps in the road ahead.
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Surging Momentum: 3 Growth Stocks to Buy Now (NU, SPOT, PLTR)
The current market environment is exceptionally strong, offering fertile ground for growth stocks with compelling fundamentals. Stocks like Nu ((NU - Free Report) ), Spotify ((SPOT - Free Report) ), and Palantir ((PLTR - Free Report) ) are perfectly positioned to capitalize on this momentum.
These stocks not only boast impressive growth forecasts and powerful momentum, but also hold top Zacks Ranks, further reinforcing their potential for continued outperformance. As these companies ride strong industry trends and demonstrate robust earnings growth, they present exciting opportunities for investors aiming to tap into the next leg of this market rally.
Image Source: Zacks Investment Research
Nu is a High-Growth Fintech Stock
Nu is one of the most exciting stocks in the market today, experiencing tremendous growth like a startup and successfully transitioning to a highly profitable company. Nu is a leading fintech company that operates primarily in Latin America, with a strong presence in Brazil, Mexico, and Colombia. It is best known for its digital banking platform, Nubank, which offers a wide range of financial services, including digital credit cards, personal loans, and investment products.
Nu stock is pushing new all-time highs this week on the heels of an impressive quarterly earnings beat. Sales in the quarter showed a 77% year-over-year (YoY) increase demonstrating its exceptional growth rate. But even more impressive is its continued growth in profitability. In the chart below we can see that over the last year, net margins have inflected meaningfully positive contributing to investors interest in the stock.
Image Source: Zacks Investment Research
Nu also has a Zacks Rank #2 (Buy) rating, reflecting upward trending earnings revisions.
What is especially compelling about Nu is its valuation. Now that the company is showing regular profits, it enjoys a very reasonable price, especially for its growth estimates. NU is trading at a one year forward earnings multiple of 35.2x and has earnings per share (EPS) growth forecasts of 51.8% annually over the next three to five years. That means it has a PEG ratio of just 0.68, which is a discount based on the metric.
Image Source: Zacks Investment Research
Spotify Stock Soars on Earnings Revisions
Music streaming giant Spotify, is another high-growth stock that continues to ride powerful buying momentum. At the most recent quarterly meeting, Spotify shared that revenue grew 21% YoY, gross margins reached 29.2% and net new subscribers were up 7 million, 1 million above estimates.
Spotify also has a Zacks Rank #1 (Strong Buy) rating, reflecting upward trending earnings revisions. Analysts have unanimously increased earnings estimates across timeframes. FY24 earnings estimates have been raised by 27.7% in the last two months and FY25 by 21.2% in the same period.
Image Source: Zacks Investment Research
Today, Spotify has a one year forward earnings multiple of 54.6x and a one year forward sales multiple of 4x. Considering SPOT is growing its sales faster than most companies, I find it quite interesting that based on forward sales, it is cheaper than the broad market.
Image Source: Zacks Investment Research
Palantir is a Top AI Stock
Palantir is yet another high-growth stock that has put up impressive returns and has a very promising outlook. At its quarterly earnings report last Monday afternoon, Palantir posted a strong period, beating both top and bottom-line estimates. Customer count grew 41% YoY, revenue grew 27% and adjusted earnings per share (EPS) grew 80% YoY.
Furthermore, Sales over the next two years are projected to increase over 20% annually and EPS are forecast to grow 26.8% annually over the next three to five years. The company also currently boasts a Zacks Rank #2 (Buy) rating.
Over the last month, analysts have unanimously bumped up earnings estimates by as much as 12.5%.
Image Source: Zacks Investment Research
Palantir also enjoys an advantageous position in the Artificial Intelligence arena. Palantir's Artificial Intelligence Platform (AIP) is designed to bring the power of AI to enterprise operations, allowing organizations to make informed, data-driven decisions quickly. AIP integrates machine learning (ML) and AI technologies with Palantir's existing data platforms like Foundry and Gotham, providing seamless deployment of AI solutions at scale.
The platform enables users to build, train, and deploy AI models using their data, making it easier to solve complex problems across industries. It emphasizes security, governance, and interpretability, ensuring that AI-driven decisions are transparent and accountable. Palantir's AIP is particularly strong in environments where data is sensitive, such as government, defense, and critical industries.
Notably, AIP allows non-technical users to interact with AI models without needing deep technical expertise. This democratization of AI can drive operational efficiencies and unlock new capabilities across various sectors.
While Palantir enjoys strong growth rates and huge potential in the AI and enterprise software space, investors must pay up to get the exposure. PLTR is currently trading at an exceptionally high relative valuation. At nearly 26x forward sales, Palantir is among the richest stocks of its size.
Image Source: Zacks Investment Research
Final Thoughts
In this strong market environment, growth stocks like Nu, Spotify, and Palantir present compelling opportunities for investors. Each of these companies has a clear path for continued growth, driven by strong industry trends and robust financial performance. With top Zacks Ranks backing them, they demonstrate both momentum and resilience in their respective markets.
However, while the potential for future gains is evident, investors should also remain vigilant and prioritize risk management. Valuations, particularly in high-growth stocks like Palantir, may appear stretched, and market corrections can happen unexpectedly. A balanced approach, combining confidence in these companies' long-term prospects with careful timing and diversification, can help investors navigate any bumps in the road ahead.