When times get tough, invest in resilient growth stocks. These are the companies with strong revenue and earnings growth. They’re the ones that are reinvesting their earnings for growth instead of distributing it as a dividend. In fact, when it comes to investing in growth stocks, investors aren’t typically after dividends. They just want exposure to exponential growth.
Motley Fool contributor Stefon Walters noted, “Growth stocks are companies expected to outperform the U.S. stock market (generally using the S&P 500 as a proxy) because of their potential for high earnings growth. This growth potential is largely why growth stocks have been the darlings of the market for quite a while now. After all, why wouldn’t investors take a liking to companies that can produce market-beating returns?”
Here are just a few of the most resilient growth stocks you may want to buy.
Advanced Micro Devices (AMD)
Advanced Micro Devices (NASDAQ:AMD) is one of the top growth stocks to buy and hold.
Since bottoming out around $60 in late 2022, AMD hit a high of $227.30. Now consolidating at $166.77, I’d like to see AMD initially retest its prior high, especially with the artificial intelligence boom just starting to get hot.
Helping, AMD just unveiled its latest AI chips, intensifying its competition against Nvidia (NASDAQ:NVDA).
That includes the Instinct MI325X accelerators, which are planned for availability in the fourth quarter. All as the “race to develop generative artificial intelligence programs has led to towering demand for the advanced chips used in AI data centers able to support these complex applications,” says Reuters.
In addition, the company introduced an upcoming series of chips titled MI350, which is expected to be available in 2025. AMD said the MI350 will likely perform 35 times better in inference, the process of computing generative AI responses.
Tesla (TSLA)
Investors may also want to pay close attention to Tesla (NASDAQ:TSLA), even with its countless issues. Down but not out, it could benefit from reaccelerating electric vehicle (EV) sales this year.
For 2024, EV industry sales are expected to increase anywhere from 20% to 30%. Plus, according to Michelle Krebs, executive auto analyst for Cox, “EV sales are increasing faster than any other segment in the industry.”
Better, TSLA sales could accelerate with the potential for newer, cheaper electric vehicles.
As noted in a first-quarter earnings report, “We have updated our future vehicle line-up to accelerate the launch of new models ahead of our previously communicated start of production in the second half of 2025.”
“These new vehicles, including more affordable models, will utilize aspects of the next generation platform as well as aspects of our current platforms, and will be able to be produced on the same manufacturing lines as our current vehicle line-up,” the company added.
Microsoft (MSFT)
Microsoft (NASDAQ:MSFT) is a no-brainer when it comes to resilient growth stocks to buy. Since bottoming out in early 2023 at around $220, MSFT is now up to $424.52 and could see higher highs. For one, the software company has evolved into a tech giant with its operating systems, cloud services, game consoles and artificial intelligence.
Two, the company is launching its first artificial intelligence personal computer product, the Surface model laptop with built-in AI capabilities.
Three, as noted by Investorplace’s Louis Navallier:
“The company may be just starting to monetize its AI technology within its customer-facing segment, but AI integration has already had a major impact on Azure’s fiscal performance. Last quarter, Azure revenue was up 31% because of this factor.”
All are serving as significant catalysts for future growth at Microsoft. Even better, analysts believe Microsoft could grow its EPS by about 13.8% a year over the next three to five years.
Schwab U.S. Large Cap Growth ETF (SCHG)
We can also find resiliency with exchange-traded funds (ETF) like the Schwab U.S. Large Cap Growth ETF (NYSEARCA:SCHG). With an expense ratio of 0.04%, the ETF offers exposure to 249 holdings and tracks the total return of the Dow Jones U.S. Large-Cap Growth Total Stock Market Index.
Some of its top holdings include Microsoft, Nvidia, Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), Meta Platforms (NASDAQ:META) and Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL).
Even better, if I wanted to buy 100 shares of the SCHG ETF, it would cost me $9,726, which is far less than buying just one of its 249 holdings. Not only does the ETF offer me solid diversification, it does so at a low price.
Even better, since its inception, the ETF has historically outperformed the S&P 500.
Vanguard Growth ETF (VUG)
Another hot growth stock ETF to buy and hold is the Vanguard Growth ETF (NYSEARCA:VUG).
With an expense ratio of 0.04%, the ETF tracks the performance of the CRSP U.S. Large Cap Growth Index in an attempt to match the performance of the nation’s top 200 growth stocks. Some of its top holdings include Microsoft, Apple, Nvidia, Amazon and Alphabet.
Since bottoming out in early 2023 at around $210, the VUG ETF is now up to $361.50. From here, given the growing demand for growth stocks, I’d like to see the ETF closer to $400 this year. Even better, the VUG ETF is seeing massive inflows. According to BNK Invest, the VUG ETF recently saw an inflow of about $1.3 billion, a 1.1% increase from the prior week.
In addition, according to TipRanks, “The VUG ETF has a Strong Buy consensus rating. Of the 200 stocks held, 173 have Buys and 27 have a Hold rating.”
Mastercard (MA)
Mastercard (NYSE:MA) is another strong growth stock to buy on a recent dip.
After running from about $410 to a high of $490, Mastercard slipped to $440. All of that happened after cutting guidance and better-than-expected earnings. However, MA did find strong double-bottom support at $440 and is starting to bounce, last trading at $448.68.
From that price, I’d like to see Mastercard initially retest its prior high of $490.
Helping, analysts at Piper Sandler (NYSE:PIPR) just initiated an Overweight rating on MA. The firm cited MA’s “scale, hard-to-replicate networks, and fintech ecosystem partnerships, all tied to sustainable secular growth within digital payments.”
The firm added that “Mastercard should be able to boost revenue by 11% this year and by 12.7% in FY204, driven by 9.5%/13.5% payment network revenue growth and value-added services and solutions growth of 13.7%/11.5% in FY24/FY25.”
We also have to remember that more Americans are heavily dependent on credit cards these days. As noted by Fox Business, “35% of Americans said they have maxed out their credit cards in recent years. Of those who had maxed out their credit cards, 85% said they were pushed to use their cards to the limit because of price increases from inflation.”
Zscaler (ZS)
Another one of the top resilient growth stocks to buy and hold is Zscaler (NASDAQ:ZS).
For one, it’s a leader in zero trust and cloud cybersecurity trading at less than growth. Second, it just unveiled multiple innovations to its “AI Data Protection Platform that leverage the world’s largest security cloud and the power of AI,” as noted by the company.
That includes its Gen AI App Security, offering “context-rich user and risk correlation, providing insights into risky prompts, AI app usage and granular policy controls,” reported TechnologyMagazine. The feature is reportedly critical, as the “adoption of AI technologies continues to accelerate, presenting new security challenges.”
Two, recent earnings were solid. In its third quarter, earnings per share of 88 cents beat estimates by 23 cents. Revenue of $553.2 million, up 32.1% year over year, beat by $17.6 million. Moving forward, Zscaler forecasts revenue of $565 million to $567 million, a possible growth of $12.8 million at the mid-point.
On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
