Hot stocks can come from companies of all shapes and sizes. For investors, the ride of a hot stock can seem like it's solely dependent on investing when the timing is right. However, there could be many reasons for the stock's run. Sometimes that opportunity is sparked by developments within the market, and other times it could be a matter of a rebound in stock price after a pause during a lengthy climb.

But it's important to not merely act on the noise that looks like growth that is actually unstable in the long run. Investors looking to pad their portfolio with companies that can provide long-term stability and enormous growth potential in burgeoning markets need to look no further than these two sizzling stocks in the midst of a breakout.

A group of people holding sparklers spelling out 2022.

Image source: Getty Images.

1. Marvell Technology

2022 is shaping up to be an excellent year for Marvell Technology (MRVL 0.55%). This semiconductor developer and provider of infrastructure semiconductor solutions has a slew of customers made up of original equipment and design manufacturers, such as AppleDell, and Time Warner Cable, to name a few. And its total customer portfolio sweeps across a wide swath of markets, ranging from computer hardware to software and programming, to construction, to coal mining.

The stock price has seen a dramatic climb of late, going from $71 on Dec. 2 to over $90 in a period of just one week. Prior to that run-up, the stock had experienced a more gradual but consistent climb, starting at a price of $41 on March 1. That's a 122% gain in just over six months, which may make some investors think they've already missed out on the big gains.

It's true that the gains may be over for the next six to 12 months, but for those looking long-term, there is much to be excited about. The company has a robust partnership ecosystem made up of names like Amazon Web Services, Analog Devices, and Samsung. The partnerships allow for technological collaboration as well as channel distribution, providing it with a full runway into the 5G future as it faces off against a host of competitors.

Marvell is also coming off of a stellar third quarter in which the company's net revenue grew to a record $1.2 billion, a 61% jump for the quarter on a year-over-year basis, along with a gross margin of 48%. Going into the fourth quarter, the company expects continued growth to a projected $1.3 billion for 9% sequential quarterly growth, driven by higher 5G and data center revenue.

The stock has climbed over the past year, but according to analysts, there is still room to run. The average 12-month analyst price target was recently increased from $85 to $100 with a high target of $120. If hit, those targets offer an additional 11% to 33% gain, giving investors one more compelling reason to buy now.

2. Okta

Okta (OKTA 1.72%) is a secure identity management application provider that has solutions that work in collaboration with the applications many businesses use on a daily basis. Those applications include big names such as Salesforce, Tableau Software, and Gmail (by Alphabet's Google) to add authentication and authorization services. Similar to Marvell, Okta is a hot stock to buy right now.

After several ups and downs over the past year, Okta stock is currently down 6%. Okta's stock climbed from $26 in 2017 to $220 in July 2020, which was likely its first wave of price appreciation. Although the stock is down, over the course of the past two weeks, it has started showing signs of a second wave, jumping 18%, driven by third-quarter results released on Dec. 2. 

The third-quarter revenue grew 61% to $351 million on a year-over-year comparison, with $337 million of that provided by subscription revenue, which grew at a rate of 63%. On top of that, the contracted subscription revenue it expects to recognize over the next 12 months also grew year over year, at a rate of 57%, to a healthy $1.2 billion. The company ended Q3 with $2.5 billion in cash and equivalents. 

Those revenue numbers could conceivably grow much higher. As of Oct. 6 of this year, the number of data breaches reported by The Identify Theft Research Center exceeded the total for all of 2020 by 17%. As a result, a growing number of businesses are expected to increase spending on identity security.

Among a crowded field including Microsoft, IBM, and Oracle, Okta was identified by Gartner as the leader in 2021 for identity-as-a-service solutions. Coming off of a quarter in which the company beat consensus estimates on earnings and revenue, this leader is well suited to take advantage of the global identity and access management market that is projected to grow at a compound annual rate of 14.5% through 2025.