The Federal Reserve has raised interest rates by 0.25 percentage points, bringing the benchmark borrowing rate to a range of 5.25%-5.5%. During the July press conference, Fed Chair Jerome Powell emphasized the need for evidence of a sustained decrease in inflation and stated that they will approach rates on a meeting-by-meeting basis. This has led to the rise of fast growth stocks.
Despite economic uncertainties, the stock market remained strong after the rate hike, with the S&P adding 0.24% and the Nasdaq composite gaining 0.3% as of July 26th.
Investors can seize market opportunities as stocks continue to grow amid rising interest rates. Here are 3 stocks that we have found demonstrate substantial growth despite rising interest rates, and will get you rich quick.
Berkshire Hathaway (BRK.A)
Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B) is a multinational conglomerate company with its primary source of capital being insurance. With billionaire Warren Buffett leading the company alongside Charlie Munger, Berkshire’s Class A shares have seen an annual average return of 20.1%.
Berkshire Hathaway’s portfolio has holdings of both private and publicly traded companies such as Apple. The company consists of two types of stock, Class A and B shares. The voting rights of shareholders holding Class A shares are generally greater than those of shareholders holding Class B shares. Berkshire has a market cap of over $715 billion and is part of the top 10 public companies in the world. This makes it one of those fast growth stocks.
Financials for Berkshire are faring well, with Q1 2023 revenue ending at $85.393 billion or a 20.54% YoY increase. EPS projected was $16.24, representing an approximate 544% YoY growth. According to Yahoo Finance, Berkshire’s Class A stock has received 3 “buy” ratings from analysts, predicting a median 12-month price target of $576,098.20 and a range spanning from $545,000.00 to $607,196.40. As for the Class B stock, analysts have rated 4 “buy” ratings from analysts, predicting a median 12-month price target of $384.26 and a range spanning from $363.52 to $405.00.
Buffett’s value investing strategy, in which stocks are picked that trade for less than the book or intrinsic value, sets Berkshire apart from its competitors. Ever since Buffett was CEO, the overall return of Berkshire’s stock yielded a whopping 3,641,613%, while the S&P 500 bore only 30,209%.
Equinix Incorporated (EQIX)
Equinix Incorporated (NASDAQ:EQIX) is a global data center player that is positioned to benefit from AI trends. With more than 240 major data centers in 32 countries across 6 continents, it is largely unmatched in the data center REIT market.
Equinix has a reputation for having unmatched reliability. It reports a 99.9999% uptime for its data centers, with its predictable business model bringing in consistent growth even during poor macroeconomic conditions. In fact, its continued growth even during the 2008 financial crisis has led it to its current position, where its impressive Q1 growth exceeding guidance has marked its 80th consecutive quarter of uninterrupted revenue growth. This is the longest growth streak by any company in the S&P 500, and makes it one of those fast growth stocks.
This excellent track record has helped Equinix attract large customers such as Amazon, Alphabet, Microsoft, and more, adding up to more than 10,000 customers. This impressive customer base is consistent as well, with 90% of revenue coming from existing customers making up 95% of the company’s monthly recurring revenue. This was shown in the most recent quarter, where Equinix closed 4,000 deals across more than 3,000 customers.
These factors have put Equinix in an excellent position for growth, with 21/25 analysts from Yahoo Finance giving the company a “buy” rating.
Airbnb (ABNB)
Airbnb (NASDAQ:ABNB) is an online marketplace that offers short and long-term homestays and experiences to customers. Airbnb is further recognized as an industry leader in the online travel booking industry.
Airbnb boasts strong financials as Q1 2023 revenue reached $1.82 billion. This was further growing at a 31.6% CAGR and beat analyst expectations by $30.6 million. Profitability has also been excellent through an 82% Gross Profit Margin TTM, over double the sector median, 32.7% levered FCF margin, and investments with a 40.4% ROCE and 16% ROTC by management handling operational expenditures.
The online travel booking industry was valued at $519.1 billion in 2021 and is forecasted to grow at a 9% CAGR to $1.228 trillion by 2030. Airbnb has recently launched a new service for customers, Airbnb Rooms, allowing customers to share rooms with verified Airbnb hosts. These rooms are a far cheaper alternative to fully renting out a home, appealing to customers with the more affordable rental options. All in all, it’s one of those fast growth stocks to consider.
Additionally, Airbnb has announced a series of partnerships in 2023 to address customer needs. For one, Airbnb partnered with Klarna and Stripe in May 2023, two industry-leading fintech companies, to streamline its payment procedure and expand payment options including paying through installments. This July, Airbnb also announced a partnership with Turno, a global rental cleaning SaaS industry leader, to alleviate customers’ concerns about rental spaces meeting hygienic standards, further driving revenue and convince for Airbnb.
On the date of publication, Michael Que did not have (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.
The researchers contributing to this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
