Hyper-growth stocks offer excitement, but their lifespan can be fleeting. Successful growth investors seek durable companies with long-term potential. Innovative firms continually emerge, offering transformative growth opportunities.
Despite misconceptions, the U.S. economy exhibits promise. GDP grows steadily, and unemployment recently hit historic lows near 4% as reduced inflation stabilizes prices, easing financial strain. Wage hikes and strong consumer spending indicate healthy demand. Investments in infrastructure and innovation bolster job creation. Despite doubts, growth stocks to buy present opportunities.
Favorable market conditions, from a robust job market to AI advancements, set the stage for the next wave of growth for key hyper-growth stocks. Buying these companies could yield long-term upside for investors willing to take the risk right now.
Palantir Technologies (PLTR)
Just recently, AI software company Palantir Technologies (NYSE:PLTR) closed a $480 million deal with the U.S. Department of Defense until 2029. The deal is to provide a Maven Smart System prototype for the U.S. Army. Analysts estimate the contract to contribute approximately $90 million annually, showcasing Palantir’s growing share in government software spending.
Additionally, Palantir announced it will provide its Artificial Intelligence Platform to energy systems manufacturer Eaton, expanding its services beyond the government sector. Palantir and Eaton (NYSE:ETN) expanded their partnership to enhance Eaton’s supply chain efficiency, utilizing Palantir’s AI-generated data.
Palantir’s major client accounts have expanded quickly, including a Fortune 500 company’s three-year deal boosting annual revenue. That highlights client satisfaction and attracts new business. Palantir achieved its sixth consecutive GAAP profitable quarter with $106 million net income and a Rule of 40 score of 57%, balancing sales growth and profitability.
Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) remains a top choice for institutional investors based on various metrics. Following strong earnings, institutions increased their bets on Nvidia, now valued at over $1,000 per share, with TD Cowen raising its target price to $1,200. Retail and institutional investors alike have ample reason for continued optimism regarding Nvidia’s prospects.
High volatility for Nvidia’s stock was expected, with options trading indicating an 8% move post-earnings. Although there has been a slight slowdown due to high demands, Nvidia proved to be resilient. Revenues are said to rise 90% by fiscal year January 2025.
Moreover, the stock increased 7%, pushing its market cap to over $2.8 trillion. That has made Nvidia third place as the biggest company in the world. As the AI chip is in tight competition with Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL), Nvidia remains a top choice for AI chips. Its rapid ascent has been marked by a relentless rally since surpassing $500 in early 2024.
Matterport (MTTR)
The last one off the list is Matterport (NASDAQ:MTTR). In its recent Q1 2024 earnings report, the company outdid itself once again and showed improved revenue growth. The non-GAAP loss per share improved by over 86%, proving the company’s commitment to reaching profitability. CFO JD Fay emphasized these achievements as they continue to drive the adoption of Matterport digital twins.
In other news, CoStar Groups (NASDAQ:CSGP) announced its plans to acquire Matterport for $1.6 billion. The acquisition will take effect by Q4 2024. Shareholder and regulatory approval are still pending, presenting a merger arbitrage opportunity for investors. However, should the deal be completed, Matterport shareholders will receive $2.75 in cash and $2.75 in CoStar stock, subject to a symmetrical collar based on CoStar’s average share price prior to the acquisition.
For those considering Matterport’s merger arbitrage, Warren Buffett’s advice resonates: “We engage in arbitrage when odds favor.” With promising odds for regulatory approval, this short-term strategy offers potential. Monitor FTC and DOJ updates and CoStar’s stock fluctuations for cues.
On the date of publication, Chris MacDonald 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.
