Given the shifting market sentiment toward more growth-oriented names, I’ve decided to move up the risk spectrum somewhat with this piece. These three high-growth tech stocks are companies with past massive surges that could be poised for similar momentum if recent price action in the market continues.
Interestingly, these three stocks aren’t what I would call AI darlings. Indeed, they may benefit from some AI trends. However, their secular catalysts are driven by other sectors, from crypto to e-commerce and communications.
Let’s dive into why these growth stocks may be more overlooked than they should be right now.
Zoom Video (ZM)
Once known and expected just to be a mere pandemic stock hype, Zoom Video (NASDAQ:ZM) has proved everyone wrong because it remains one of the market’s most stable and resilient tech stocks.
Over the past year, Zoom surged by over 13%, driven by positive announcements and solid numbers released during the company’s recent Q4 2023 earnings report. During its earnings call, Zoom CEO Eric Yuan emphasized the company’s strong fundamentals. Its Team Chat migration tool became one of the company’s forefront profit-makers. Q1 2024 earnings per share projections are for the company to bring in $1.18 per share of adjusted earnings. Revenue is also expected to spike to $1.125 billion, which signals strong growth for the video communications leader.
The company is now more focused on integrating AI tools and has seen impressive growth. Zoom now anticipates better customer retention numbers as the company continues to roll out its suite of AI tools. Additionally, Zoom introduced its AI Companion, offering features like meeting summaries and innovative recordings without additional charges. Despite previous plans for data collection, Zoom shifted focus to developing Docs, an AI-driven workspace for various tasks.
So, for a company many wouldn’t associate with the AI trend, Zoom has found a way to capitalize on this high-growth space. We’ll have to see if its stock price continues to feel the love from investors moving forward, but given the market’s momentum right now, that seems likely.
Coinbase (COIN)
Coinbase Global (NASDAQ:COIN) has been among the key beneficiaries of an incredible surge in Bitcoin (BTC-USD) prices. With Bitcoin gaining traction, transaction volumes for all different cryptos are surging, leading to outsized profit expectations for the largest centralized crypto exchange in the U.S.
Coinbase’s share price has been on a tear, with COIN stock now trading above the $240 level. This is the stock’s highest level in over two years, indicating just how bearish the previous crypto winter has been for the crypto giant.
This rise was partly due to the company’s announcement of its first profit in two years. Coinbase easily surpassed Wall Street expectations after releasing its Q4 2023 earnings report. This was the first earnings report that showed actual profit since Q4 2021. As more capital flows into spot Bitcoin ETFs, Coinbase will continue to generate some revenue from this trend as an intermediary providing support to many of the companies in charge of these ETFs.
Coinbase still generates most of its revenue from its brokerage business, which benefits from transaction fees. However, capital flows into spot ETFs and the company’s continuation of its services business rollout could spur greater investor interest in this stock moving forward. Accordingly, I’m assigning COIN stock a speculative buy for investors looking to ride this momentum.
Shopify (SHOP)
One of the biggest e-commerce platform providers in the world, Shopify (NYSE:SHOP), had a blast in 2023. Earnings were great. Revenue was even better, with the company reporting in Q4 2023 that revenue surged to $7.06 billion from its 2022 revenue of $5.59 billion. While the company’s valuation may seem high, Shopify has returned to profitability and continues to showcase its innovation and partnerships, enhancing its credibility. As Shopify attracts more customers around the world, sales will grow. And thus far, Shopify has only tackled a small portion of its total addressable market.
Analysts remain optimistic about Shopify’s long-term growth prospects. In 2023, Shopify facilitated $235.9 billion in gross merchandise volume across 175 countries, up 20% from the previous year. Revenue reached $7.1 billion, powered by its suite of tools for online commerce, including payment processing, inventory management, and marketing solutions. With its growth trajectory and recent profitability, Shopify is a compelling buy for those seeking long-term growth with what appear to be sustainable tailwinds.
On the date of publication, Chris MacDonald 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.
