When most investors think of retirement-oriented stocks, they probably think of dusty dividend stalwarts like Johnson & Johnson and Coca-Cola, which generate stable returns and pay reliable dividends. Those types of blue chips are solid long-term investments, but they probably won't help you retire ahead of schedule.
If you're willing to take on a little more risk to generate bigger gains, then you should probably look beyond the slower-growth dividend stocks and diversify your retirement portfolio with a few growth stock entries as well. Here are four higher-growth stocks to consider: Cloudflare (NET 0.12%), ServiceNow (NOW 0.93%), The Trade Desk (TTD 1.71%), and Airbnb (ABNB -1.04%).
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1. Cloudflare
Cloudflare's cloud-based content delivery network (CDN) accelerates the delivery of digital content for websites. Its integrated cybersecurity tools also shield websites from bot-based attacks. It already serves up data from more 285 cities across more than 100 countries, and it processes about 45 million HTTP requests every second.
Cloudflare considers itself to be a "water filtration" system for the internet, and predicts that the market's demand for its services will continue to rise as internet speeds increase, websites host more bandwidth-heavy content, and bot-based attacks evolve.
The market's demand for Cloudflare's services is soaring, and analysts expect its revenue to rise at a compound annual growth rate (CAGR) of 35% from 2022 to 2025. Its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) is also expected to grow at a CAGR of 40%. Cloudflare's stock might not seem cheap at 15 times this year's projected sales, but I believe its growth potential justifies that premium valuation.
2. ServiceNow
ServiceNow's cloud-based digital workflow platform helps companies optimize their workflows and streamline their operations. It served over 7,700 customers at the end of 2022, including approximately 85% of the Fortune 500.
ServiceNow believes it will benefit from the digital transformations of workplaces and the rise of hybrid and remote work. Its business model is well-insulated from the macro headwinds, since economic downturns often drive companies to use its tools more frequently to cut costs and improve their operating efficiency.
ServiceNow believes it can generate more than $16 billion in revenue in 2026, which implies its top line will still grow at a CAGR of at least 21% from 2022 to 2026. Unlike many other high-growth cloud software companies, ServiceNow is also consistently profitable on a generally accepted accounting principles (GAAP) basis. It might seem a bit expensive at 10 times this year's sales, but it still has plenty of room to run.
3. The Trade Desk
The Trade Desk is the world's largest independent demand-side platform (DSP) for digital ads. DSPs enable advertisers to place automated bids on ad space across a wide range of desktop, mobile, and connected TV (CTV) platforms.
The Trade Desk benefits from the market's growing demand for digital ads that aren't locked into the "walled gardens" of Alphabet's Google or Meta's Facebook and Instagram. The growth of ad-supported streaming video services across that "open internet" has also boosted its CTV revenue.
Like many advertising-oriented companies, The Trade Desk's growth cooled off over the past year as the industry was rattled by macro headwinds. But from 2022 to 2025, analysts still expect its revenue to grow at a CAGR of 22% as its adjusted EBITDA increases at a CAGR of 20%. Its stock isn't cheap at 15 times this year's sales, but it will likely remain one of the most reliable ad tech plays for the foreseeable future.
4. Airbnb
Airbnb established an early mover's advantage in the short-term rentals space, and it remains the market leader with 393.7 million nights and experiences booked in 2022.
Airbnb's business model is often considered resistant to inflation and other macro headwinds for two simple reasons: Travelers will often pick cheaper Airbnb rentals instead of hotels when their budgets are tighter, while property owners will be more inclined to rent out their properties to generate passive income during economic downturns.
Airbnb suffered a severe slowdown during the pandemic, but it's generated impressive growth since those lockdowns ended. Between 2022 and 2025, its annual revenue is expected to grow at a CAGR of 15% as its adjusted EBITDA rises at a CAGR of 18%.
We should take those estimates with a grain of salt, since Airbnb still faces regulatory challenges and competition from other short-term rental platforms, but its stock seems reasonably valued right now at 7 times this year's sales. If you believe Airbnb will remain synonymous with short-term rentals, it could be a great long-term buy for your retirement portfolio.
