Have $500? 2 Unstoppable Growth Stocks to Buy Without Hesitation in the New Bull Market

While some investors harbor hope of finding one or two stocks that blow up overnight and inject serious growth into their portfolio, and that can certainly happen, long-term investing often requires more patience and strategy. Investing in companies that you plan on holding for a minimum of five years, and preferably longer, is key to an investing strategy that holds up to the test of time.

Buying companies you understand, and that align with your interests, financial objectives, and portfolio goals is key as well. As you diversify your portfolio across multiple stocks and sectors, there are plenty of great companies with promising long-term growth stories to explore.

Here are two names to consider for your buy list right now if you have $500 to invest in stocks.

1. Airbnb

Airbnb (ABNB -0.41%) is a prime example of a pandemic stock that bolstered its business and financial strength with the passage of time. The stock is trading up about 40% from one year ago, as investors seem to be happy with the financial performance of the business. It delivered $2.1 billion in revenue in the first quarter of 2024, an 18% increase from one year ago, while profits rose 126% to $264 million.

That net income figure was the most the company has ever reported in a first quarter since Airbnb was founded. Free cash flow and cash flow from operations in the first quarter both totaled $1.9 billion, while trailing-12-month free cash flow came in at $4.2 billion.

The company also just launched its Summer Release, which includes new updates to the platform that positively impact hosts and guests. Recent updates include better price-setting tools for hosts and discounts on long-term stays for guests. In the Summer Release, Airbnb added new features to make planning group trips easier, an important point considering that more than 80% of bookings on the platform are for groups.

The Summer Release also includes format enhancements for messaging involving guests, hosts, and customer support, including emoji reactions and artificial intelligence-powered prompts for quick replies. Speaking of AI, CEO Brian Chesky gave more color to the platform's use of these tools in the first-quarter earnings call.

I'll just give you three examples of things we've done with AI. You know, we've made it easier to host. We have a computer vision model that we trained in 100 million photos, and that allows hosts to, like the AI model, to organize all their photos by room. Why would you want to do this? Because this increases conversion rate when you do this. Number two, we launched last week AI-powered quick replies for hosts. So, it basically predicts the right kind of question or answer for a host to pre-generate to provide to guests. And this has been really helpful.

And then, we've made a really big impact on reducing parties on Airbnb with our reservation screening technology. So, now, we're going much bigger on generative AI. ... Over time, we're going to bring the AI capabilities from customer service to search and to the broader experience. And the end game is to provide basically an AI-powered concierge.

Not only is the company a cash and profit machine, but its continued updates to the platform are driving both hosts and guests to Airbnb. Overall nights and experiences booked jumped just shy of 10% year over year in the first quarter, while Airbnb app downloads in the U.S. rose 60% from the year-ago period. In fact, 54% of all nights booked globally in the first quarter of 2024 were done through the mobile app.

Airbnb benefits from both short- and long-term stay bookings, and is designed to cater to every type of travel need without accumulating the costs of managing the actual homes. If you're looking for an asset-light, profitable travel stock with a solid runway to growth ahead, Airbnb fits the bill on all counts.

2. Chewy

Chewy (CHWY -1.53%) may look like a basic online pet store, but this growth stock is so much more than that. You wouldn't know how well the company is actually doing if you looked at the stock alone, which is trading down by more than 50% from where it was a year ago.

Even though active customers are down slightly from one year ago, Chewy is growing net sales steadily and is profitable. In the company's fiscal 2023, it reported net sales of more than $11 billion, up 10% from the prior year.

Chewy was profitable for the first time in 2021. It turned a profit for the full year 2023, bringing in net income of $40 million in the 12-month period. While that figure was down from the prior year, Chewy's fourth-quarter net income of $32 million accounted for most of that annual figure, which represented a 370% year-over-year increase.

Chewy has been investing aggressively in its long-term growth opportunity. It recently expanded to its first international market (Canada), and is working to open brick-and-mortar vet practices. These aren't out-of-pocket moves for Chewy.

The business already has an online pet pharmacy, sells pet health insurance plans, operates an on-demand pet telehealth service, and has its own line of branded pet supplements. It also sells thousands of third-party pet-centric brands on its platforms. Most of Chewy's net sales actually come from subscription sales through its Autoship program.

Those recurring Autoship sales comprised 76% of Chewy's net sales in 2023. More and more pet owners are taking advantage of Autoship too. Autoship customer sales rose 15% in 2023 from 2022, notably higher than the overall net sales growth rate for the year.

Meanwhile, net sales per active customer reached a new record of $555, up 12% from one year ago. It's also worth mentioning that while pet spending is discretionary to a certain extent, some segments are not. These essential spending areas are where Chewy derives most of its growth. In 2023, 85% of its total net sales came from health-related spending and nondiscretionary consumables.

A newer moneymaking initiative for Chewy is its sponsored ads program, which allows pet brands to advertise to shoppers on the platform. That new program helped drive its gross margin over 28% in the full year 2023. On a final high note, Chewy nearly tripled its free cash flow in 2023 compared to the prior year, with a total of $340 million on that metric.

Investors might want to take a slice of the action sooner than later, as it appears there's still a lot to like about this beaten-down stock.