2 Top Growth Stocks to Buy Right Now

Trying to time the market rarely works. Even if you get lucky once or twice, the odds of correctly predicting the future on a consistent basis are virtually nonexistent. That's why I take a long-term approach, looking for high-quality stocks I can hold for at least five years.

So when is the best time to start investing? Assuming you've paid down your debts and stashed some cash away for emergencies, the best time to get started is right now. With that in mind, Axon Enterprise (AXON 2.64%) and Shopify (SHOP 4.90%) both look like long-term winners. Here's what you should know about these growth stocks.

Image source: Axon Enterprise

1. Axon Enterprise

Axon has a noble mission: to protect life. Over the long term, the company hopes to make the bullet obsolete, reduce social conflict, enable a fair judicial system, and build a world of racial equity and inclusion.

To that end, Axon is the market-leading manufacturer of conducted energy devices (i.e. TASERs). The company also provides a range of software and sensors (e.g. body cameras, aerial drones) to law enforcement agencies, both in the U.S. and internationally, as well as in adjacent markets like correctional departments, fire and medical personnel, and the U.S. government and military.

During the second quarter, Axon delivered an impressive financial performance. Revenue accelerated 55% to $219 million, driven by strong sales across TASER devices, software, and sensors. Moreover, at its software-as-a-service platforms, Axon posted a net retention rate of 119%, indicating a 19% uptick in average customer spending. Finally, the company's gross margin jumped 500 basis points, reaching 66.4% in Q2. In short, Axon's business is firing on all cylinders.

Zooming out, the company's financial performance has been equally impressive over the long term.

Source: Ycharts. TTM = trailing-12-months. CAGR = compound annual growth rate.

In June 2021, Axon released the Fleet 3 camera, an AI-powered in-vehicle video system with automated license plate reader (ALPR) technology. Like all of Axon's sensors, data collected by the Fleet 3 can be stored in Axon Evidence, a cloud-based repository, and used in Axon Records, a system designed to streamline and automate incident report writing. In both cases, this helps law enforcement personnel work more efficiently, reducing time spent on tedious paperwork.

Looking ahead, management puts Axon's market opportunity at $27 billion, leaving plenty of room for future growth. And as law enforcement agencies around the world look to simplify and digitize processes that have long been paper-based, Axon's market-leading position should drive strong demand. That's why this growth stock is a buy.

Image source: Getty Images

2. Shopify

Shopify simplifies commerce for small- and medium-size businesses. Its software helps merchants manage sales across physical and digital locations, integrating seamlessly with online storefronts, marketplaces, and social media platforms. It also provides a range of merchant services, including payment processing, discounted shipping, and managed fulfillment.

Over the last year, Shopify made several moves to further empower its clients. For instance, the company partnered with Walmart, Pinterest, and TikTok, opening new sales channels on its platform. Shopify also upgraded its point-of-sale software to simplify omnichannel commerce, enabling sellers to offer in-store and curbside pickup. And it debuted the Shop App, a product designed to help consumers discover new brands, make purchases, and track orders from one location.

Collectively, these new products and partnerships energize the company's flywheel: As Shopify introduces new services, merchants benefit from greater functionality; and as more merchants join the platform, Shopify benefits from increased sales, furthering its ability to invest in new services. This virtuous cycle has been a powerful growth driver.

Source: Ycharts. TTM = trailing-12-months. CAGR = compound annual growth rate.

While Shopify started as a solution for small- and medium-sized businesses -- a market that management values at $153 billion -- the company has seen strong traction with Shopify Plus, a more customizable commerce platform designed for larger merchants. In fact, during the most recent quarter, Shopify onboarded brands like Netflix and McCormick. This suggests that the company's market opportunity is expanding.

Going forward, investors should expect Shopify to maintain its momentum, though growth is bound to slow at some point. Even so, e-commerce is here to stay, and with over 1.7 million merchants on its platform, Shopify has established itself as a key player in this growing industry. That's why this growth stock looks like a good addition to almost any portfolio.