Growth stocks are rallying higher and higher in the current environment, and it makes sense so many people are getting in on the action. A side effect of this is that many people are also starting to turn to many speculative bets, and we can see that through the recent meme stocks and crypto rallies.
It’s a far better idea to widen your timeframe instead of dabbling in memecoins or meme stocks or trying to catch a falling knife. Of course, I love to write about them, but these assets should only form a small portion of your portfolio. Investing in quality companies with solid prospects in the coming decades is a much better idea. It is much more likely that these growth stocks will deliver multibagger returns by 2033, and some may even 20x if the stars align for them.
Here are seven such growth stocks to buy and hold.
AeroVironment (AVAV)
AeroVironment (NASDAQ:AVAV) makes unmanned aircraft systems, tactical missile systems and high-altitude pseudo-satellites. This defense tech leader is poised for explosive growth in the coming years, driven by the unstoppable megatrend of drone adoption in warfare and policing worldwide.
Governments are racing to catch up on this critical technology, and AVAV’s 71% surge over the past six months reflects the immense pent-up demand finally being unleashed.
In Q3, AVAV’s revenue soared 39% year-over-year to a record $187 million, with its Loitering Munition segment more than doubling.
Management’s confidence in raising full-year guidance speaks volumes about the momentum they see in orders. As one of the premier providers of cutting-edge drone solutions, I expect AVAV to continue delivering estimate-beating growth as it captures an outsized share of ballooning defense budgets. The backlog is also swelling already.
While a 20x gain from here is undoubtedly ambitious, I wouldn’t rule it out over the long run. The mass production of inexpensive yet highly effective drones is still in its infancy in the West.
DroneShield (DRSHF)
This is another drone pick and the last one, I promise! DroneShield (OTCMKTS:DRSHF) provides cutting-edge drone defense solutions to counter the rapidly growing threat of drones. With geopolitical tensions escalating and drone usage surging, the demand for effective counter-drone systems is skyrocketing. DroneShield is perfectly positioned to capitalize on this megatrend, as evidenced by its stellar Q1 2024 results. Revenues soared 10x YOY to 16.4 million AUD, while the company now boasts a 519 million AUD sales pipeline.
What’s particularly exciting is DroneShield’s AI-powered SaaS offerings, which saw revenues double in Q1. As drones become more advanced, customers will need DroneShield’s continuously evolving AI software to stay ahead of the threat. With over 95 engineers and a 400 million AUD annual production capacity, DroneShield is ready to meet the explosive demand ahead.
The stock has surged 464% in the past year, but this is just the beginning. As more militaries and critical infrastructure operators wake up to the urgent need for drone defense, DroneShield’s growth trajectory could turn parabolic. Don’t be surprised to see this stock deliver 20x gains by 2033.
AST SpaceMobile (ASTS)
Imagine if you could invest in Starlink and it was public. Well, this pick may fit. AST SpaceMobile (NASDAQ:ASTS) is building the first space-based cellular broadband network that will allow everyday mobile phones to connect directly to satellites. This disruptive technology could be a game-changer in the telecom industry, riding the unstoppable 5G and smartphone megatrends to deliver 20X or greater returns by 2033 potentially.
While traditional telecom stocks often have slow growth, high debt and lackluster returns, ASTS is a unique pure-play on the satellite-to-smartphone revolution. The company’s innovative approach means you won’t need a special satellite phone or antenna to access 5G broadband from space — just an unmodified 5G-compatible phone in your pocket.
With the stock already up 123% in the past month, we’re just scratching the surface of ASTS’ explosive growth potential. The company signed its first definitive commercial agreement with AT&T (NYSE:T) through 2030 and expects to replicate this revenue-share model globally.
Analysts see ASTS reaching profitability by 2027, with annual revenue skyrocketing to $35 billion by 2032. If ASTS can execute on its first-mover advantage, we could be looking at the next Starlink.
Creative Realities (CREX)
Creative Realities (NASDAQ:CREX) provides digital signage solutions. The company reported record Q1 revenue of $12.3 million, up an impressive 23.5% year over year. CREX stock, which has already surged nearly 110% year over year, still has tremendous upside potential.
The digital signage market is projected to reach $46 billion by 2030. Creative Realities is well-positioned to capitalize on this megatrend. The company already expects a $20 million ARR by year-end.
Gross margins remain healthy and should expand as high-margin subscription revenue grows. The upcoming $20 million credit facility also gives Creative Realities ample dry powder for strategic investments.
CREX looks significantly undervalued relative to its growth prospects. Analysts expect the company to turn profitable with 28% revenue growth this year. If management executes, I wouldn’t be surprised to see the stock deliver 20x returns by 2033.
DraftKings (DKNG)
DraftKings (NASDAQ:DKNG) is a leading digital sports entertainment and gaming company. DraftKings is poised to ride the megatrend of online sports betting and gambling legalization sweeping across the United States. In the latest quarter, DraftKings’ revenue grew by an impressive 53% year over year to $1.17 billion, beating estimates by over $51 million.
Management also raised full-year 2024 revenue guidance, now expecting 34% growth. DraftKings recently launched successfully in Vermont and North Carolina, acquiring customers efficiently. Both states are expected to adjust EBITDA positively in the second half.
The company sees excellent customer retention and cross-selling across sports and gaming verticals. With more states likely to legalize online gambling in the coming years, I believe DraftKings has a long growth runway ahead. It also has lots of room to expand internationally.
The stock has already surged 69% in the past year, but if it can maintain this momentum, I wouldn’t be surprised to see DraftKings deliver multibagger returns by 2033. Of course, many things must go right for a 20x return, so keep expectations tempered.
Block (SQ)
Block (NYSE:SQ) provides innovative payment and financial services solutions for businesses and individuals. This fintech powerhouse is poised for explosive growth over the next decade, potentially delivering 20X gains by 2033. The fintech sector has been beaten down recently, but Block’s strong Q1 results highlight its resilience and immense upside potential. With EPS of $0.86, beating estimates by $$0.12, and revenue surging 19.38% to $5.96 billion, Block is firing on all cylinders.
The company was once considered an unprofitable PayPal (NASDAQ:PYPL) alternative. However, Block has turned the corner to consistent profitability while maintaining robust growth.
As margins expand and network effects kick in, I expect Block’s stock to stage a breakout.
Super Micro Computer (SMCI)
Super Micro Computer (NASDAQ:SMCI) makes servers and storage solutions for data centers and cloud service providers. The company is riding the coattails of the AI and data center megatrend, which has plenty of runway ahead. Even though SMCI stock has skyrocketed nearly 300% over the past year, it’s recently taken a 25% haircut from its highs.
However, this pullback presents a compelling buying opportunity for long-term investors. The AI boom is still in its early innings, and as companies continue to scale their hardware to meet surging demand, Super Micro is perfectly positioned to capitalize.
The stock trades at a hefty premium, but it’s hard to argue with the blistering 200% revenue growth posted in Q3. As AI adoption accelerates, I wouldn’t be surprised to see more earnings surprises in the coming quarters.
While SMCI’s current $50 billion market cap might seem lofty, if the stars align, it has the potential to grow 20-fold and reach $1 trillion by 2033. Given the AI megatrend, this is a bold prediction but not unreasonable.
On the date of publication, Omor Ibne Ehsan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.