A market sell-off can be a hard reminder to investors in growth stocks about how volatile such stocks can be. To be sure, investing in growth stocks can help you earn a fortune, but the journey is far from easy, and you'd require a lot of patience and conviction in the companies you're invested in to hold their shares through market turbulence.
At the same time, a bear market like the one we're into right now is also one of the best times to put your money to use and lay a foundation for wealth creation. That's what growth stocks can do for you if you can pick them when the time's right. If you have $5,000 on you right now, here are two such incredible growth stocks to buy.
A hot product in a red-hot industry: This stock is primed to win
It's unusual to expect an auto stock to grow exponentially in the coming years, but Ford (F 0.43%) has the potential. And it's not because of its conventional vehicles, but electric vehicles (EVs) that are all set to transform the company.
NYSE: F
Key Data Points
Just to give you some stats, Ford expects to deliver more than 2 million EVs by 2026, by when it foresees EVs to make up one-third of its global volumes. By 2030, EVs could make up 50% of Ford's total sales.
Ford's goals look attainable, going by the unprecedented demand for its most-awaited electric vehicle, the F-150 Lightning, which starts at a price point of just under $40,000 per truck. It's the all-electric version of the hot-seller pickup truck F-150 that has been America's best-selling truck for more than four decades now. Ford has 200,000 reservations for the F-150 Lightning, which it started selling in May.
The backlog is so huge that Ford is aggressively expanding production capacity to bring down the F-150 Lightning's waitlist that extends out a couple of years at least. Ford also sells two other EVs right now – the Mustang Mach-E and E-Transit commercial vans. Its total EV sales have exploded in recent months.
In fact, EVs are the sole reason Ford's market share in the U.S. rose 3.5 percentage points to 13.5% in May. At this pace, and with the F-150 Lightning having only just started contributing to Ford's sales, it could only be a matter of time before Ford catches up on the leading carmakers in the United States. A rising share market is a great metric to gauge a company's potential.
It won't be an easy ride for Ford, and there's a reason Ford stock has lost almost 40% value so far in 2022. Higher inflation and interest rates don't bode well for an automaker, and Ford also had a series of massive recalls in recent days, including that of the Mach-E.
Yet, beyond near-term blips, Ford is the kind of cheap growth stock you want to buy right away.
A stock split could lift this growth stock out of slumber
Once a Wall Street darling, Shopify (SHOP +7.17%) stock has fallen fast and furious this year, having lost a staggering 73% in value as of this writing. This is probably a rare golden opportunity for growth investors to buy the stock.
Shopify is a one-stop virtual shop for individuals and merchants of all sizes that want to set up an online business and manage the entire sales process from one platform. The market fears Shopify's growth could take a big hit if the economy slows down as customers cut back on e-commerce spending. Yet going by the dramatic drop in Shopify's stock price in recent months, it appears the market doesn't expect the company to grow at all.
NASDAQ: SHOP
Key Data Points
That's far from the truth. Yes, Shopify may not see the kind of exponential growth it saw in the past couple of years or so during the COVID-19 pandemic peak anytime soon, but its sales still grew 22% year over year in the first quarter. Also, Shopify expects its fourth quarter to be the strongest this year. Combined, I'd still expect to see double-digit growth in Shopify's revenue in 2022.
Also, Shopify's impending acquisition of Deliverr could make a big difference as it'll allow Shopify merchants to offer one- and two-day deliveries.
Famed investors like Cathie Wood recognize the potential in Shopify, which is why they're loading up on the e-commerce stock while it's still languishing. You'd want to do the same. With Shopify's 10-for-1 stock split also coming up on June 28, there's a fair chance the market could find an excuse to give the stock a much-deserved breather.
