There are some stocks that you can count on to grow over five-plus years, thanks to substantial market share in lucrative industries and consistent demand. The tech market is one of the best places to invest in growth stocks that will provide reliable gains over the long term.
After a tech sell-off in 2022, it might feel like a risk to invest in stocks that saw sharp declines over the last 12 months. However, it's best to focus on a company's long-term performance to gauge its future growth.
Tesla (TSLA -3.21%), Microsoft (MSFT 0.27%), and Advanced Micro Devices (AMD 1.08%) watched their stocks take deep dives last year but retained impressive long-term growth, as seen below.
Data by YCharts
Here are three explosive growth stocks to buy in 2023 and beyond.
1. Tesla experienced monster long-term growth
In 2022, Tesla shares plummeted 69% alongside supply chain issues and consumer demand declines caused by an economically challenging environment. However, the company has more than proven its reputation as a growth stock with its continued long-term growth.
As seen in the previous table, the company's stock has risen 729% in the last five years and over 7,000% in the last decade. And since 2019, revenue has increased 231% to $81.4 billion, while operating income has increased 17,000% to $13.8 billion.
The company's explosive growth is largely owed to its leading market share in electric vehicles, an industry worth $208.58 billion in 2022 and expected to grow at a compound annual growth rate (CAGR) of 23.1% through 2030, according to Precedence Research.
Over the next few years, Tesla will open two new factories, one of which is in Berlin. The German factory will localize its European business, reducing its operating costs in the world's second-largest electric vehicle market. Additionally, Tesla will be better equipped to meet orders that CEO Elon Musk recently revealed are currently twice the rate of production.
The mass adoption of electric vehicles and later full self-driving cars still has a long way to go, with Tesla's stock an excellent way to invest in the burgeoning market in 2023 and beyond.
2. Microsoft knows investing in burgeoning industries is key
As the home of potent brands like Windows, Office, Xbox, Azure, and LinkedIn, Microsoft gained significant market share in industries such as operating systems, productivity software, video games, cloud computing, and even social media. With the wide adoption of the company's services, Microsoft experienced impressive and consistent long-term growth.
Over the last five years, the tech giant's stock has increased by 181%, and risen 825% over the last 10 years. Since 2013, Microsoft's revenue has soared 154% to $198 billion, while operating income has grown 211% to $83 billion. The consistent growth is promising for a company that has been active for almost 50 years.
Microsoft owes much of its long-term success to its near-constant search for the technology of the future. For instance, its 2008 venture into cloud computing with the launch of the platform Azure has more than paid off, as the service is still bringing in double-digit quarterly revenue growth.
More recently, Microsoft was seemingly proven right with its 2019 $1 billion investment in artificial intelligence (AI) start-up OpenAI when the company wowed the tech world with the launch of its chatbot software, ChatGPT. According to Grand View Research, the AI market will grow at a CAGR of 37.4% through 2030, which will only be a positive effect on Microsoft's long-term growth.
As a result, Microsoft is a screaming buy in 2023 and one you can hold well into the future.
3. AMD proves its resiliency after a challenging year
As with Tesla and Microsoft, AMD provided investors with explosive growth over the last few years. Its stock price climbed 590% since 2018, and over 3,000% since 2013. Additionally, its revenue soared 345% in the last five years to $23 billion, while operating income has grown more than 1,000% to $1.2 billion.
The growth is impressive, considering how detrimental the last year could have been to its business. In 2022, the PC market experienced significant declines in demand, with worldwide shipments of graphics processing units falling 42% throughout the year. The market challenges led to substantial decreases in AMD's client and gaming segments.
However, the company proved its resilience with its ability to shift its focus toward its data centers and embedded businesses. In fiscal 2022, data center revenue rose 63% to $6 billion, and operating income increased 86% to $1.8 billion. Meanwhile, AMD's 2020 purchase of Xilinx clearly paid off, with the acquired company being the main contributor of the $1.4 billion in embedded revenue.
AMD's past growth and its resiliency under challenging conditions make its stock a must-buy in 2023, almost guaranteed to grow far into the future.
