There's a common thought in the investing universe that you need to take a ton of risk in order to generate strong returns in the stock market. This often pushes you toward small, speculative companies that haven't yet proven themselves to the market, but it doesn't have to be that way.
Large-cap stocks, or companies worth $10 billion or more by market cap, are still growing leaps and bounds, enough to produce stunning returns for your portfolio, and they're more established than smaller, riskier names. Here are five of the fastest-growing large-cap companies to consider for your portfolio.
Image source: Getty Images.
1. Datadog
Software company Datadog (DDOG 0.35%) operates a platform that monitors customers' cloud activity and analyzes it to provide insights and data. These insights give Datadog's customers (other companies) valuable information on user experience, security, network status, and more. The company operates as a software-as-a-service (SaaS) platform, thus generating recurring revenue.
Companies are becoming increasingly digital, moving more parts of their business operations into the cloud, removing the need for on-site servers and storage. Datadog has benefited from this trend, growing revenue 70% to $1.0 billion in 2021. That marked an acceleration from 2020 when revenue increased 66%, a rarity given how many tech stocks saw their growth slow last year as pandemic conditions eased.
2. Advanced Micro Devices
Many emerging technologies require computing power, and semiconductor company Advanced Micro Devices (AMD -0.39%) is poised to help provide the hardware to power applications like supercomputing, 5G, artificial intelligence, and more. AMD has traditionally competed with rival Intel, but AMD has gained ground in recent years due to technological advancements in bringing new chip architectures to market.
The company generated $16.4 billion in revenue in 2021, up 68% and an impressive leap considering its already large revenue base. AMD also recently closed its massive $50 billion acquisition of Xilinx, which gives it a strong foothold in adaptive computing products and increases AMD's total addressable market to an estimated $135 billion.
3. Sea Limited
E-commerce, gaming, and digital payments are all "hot" growth industries for investors, and internet conglomerate Sea Limited (SE 1.76%) does all three. The company primarily serves Southeast Asia but has expanded to new markets like Latin America and parts of Europe. The company's mobile game Freefire is among the most popular mobile games globally.
Sea is growing at a blistering pace -- revenue increased 128% last year, extending a multiyear streak of triple-digit top-line gains. That kind of growth won't last forever, but Sea has a lot of levers to pull to drive future growth. Management is guiding for its fintech business to expand 155% this year, which should help offset an expected slowdown in the gaming business.
4. Snowflake
Data is becoming an essential resource for businesses to analyze and learn from. However, most companies have outdated storage methods, often keeping data segregated in various formats and locations. Snowflake (SNOW 2.10%) operates a cloud-based platform that enables companies to efficiently store and share data.
Simplifying that process seems to be solving a massive problem for Snowflake's customers. The company recently closed its fiscal 2022, growing revenue 106% to $1.2 billion. The company has an impressive 178% net revenue retention rate, which means Snowflake's customers are spending much more with the company with each passing year. With just under 6,000 customers, there's a huge market for Snowflake to pick up new customers in the years ahead.
5. The Trade Desk
Ad money is steadily flowing out of outdated media formats, like broadcast television, and into new digital ones, such as connected TV devices for streaming. The Trade Desk (TTD 3.39%) operates one of the leading independent ad-technology exchanges, where companies can buy digital ad campaigns, target them toward a specific audience, and see how their campaigns perform.
It's not the fastest-growing company on this list -- 2021 revenue was up 43%. But that marked an increase from the previous two fiscal years. There's a significant tailwind in the advertising industry with an estimated $155 billion spent on programmatic ads in 2021, a figure which should keep growing, and The Trade Desk can lean into that opportunity for years to come.
