So far this year, three Nasdaq 100 stocks have doubled in value: Nvidia, Meta Platforms, and Tesla. Such quick growth has investors excited and some might be wondering what other stocks are poised to double between now and the end of 2025?
Three Fool.com contributors reveal their picks for stocks that could double over the next 27 months.
Alphabet's revenue streams are gigantic -- and growing
Jake Lerch (Alphabet): Sure, it's giant and well known, but that doesn't mean Alphabet's (GOOG 9.96%) (GOOGL 10.22%) stock isn't poised to climb higher. In fact, with a year-to-date return of roughly 50%, Alphabet has already demonstrated its stock has plenty of room to run.
Yet its fundamentals are even more impressive than the stock's recent performance. In brief, Alphabet's grasp on the digital advertising market is its most powerful asset, and an extremely lucrative one. In its most recent quarter -- the three months ending on June 30 -- Google Search generated $43 billion in revenue. To put that in perspective, Coca-Cola recorded $44 billion in sales over the past 12 months.
Google Search isn't Alphabet's only source of revenue. In the most recent quarter, the company generated $8 billion from its cloud services business, $8 billion from YouTube ads, and another $8 billion from its Google Network, i.e., Google AdSense and Google Ad Manager.
What's more, these already massive business segments continue to grow by leaps and bounds. Alphabet's cloud business led the way with 28% year-over-year growth in its most recent quarter. The Google Other segment -- Google Other which includes hardware and Google Play Store sales -- jumped 23%. Meanwhile, the company's core search segment grew at 5% -- not too shabby for a division that is expected to generate more than $150 billion in revenue this year.
Alphabet remains a juggernaut worth owning. Given its leading position in the digital advertising market and its fast-growing cloud and hardware segments, I think it's quite possible the stock could double between now and the end of 2025.
The foreign stock that could skyrocket as more U.S. investors take notice
Will Healy (Nu Holdings): Nu Holdings (NU 1.66%) is the largest digital bank measured by capital raised, according to some rankings. It offers banking products online in Brazil, Mexico, and Colombia, where large portions of the population lack a bank account or a credit card.
The NuBank parent could change that. Over a one-year period, Nu issued the first credit card to nearly 6 million Brazilians. That gives these customers direct access to the financial system, meaning they do not have to depend on financial products such as prepaid cards and digital wallets.
Also, with no physical branches to maintain, NuBank has a cost advantage over the legacy banks with which it competes. Its potential to transform Latin American finance attracted an early investment from Warren Buffett's team at Berkshire Hathaway.
Now, as Nu moves toward saturation in Brazil, home to more than 79 million of its 84 million customers, it seeks to repeat this approach in Mexico and Colombia.
The strategy appears to be working. Nu's customer base grew 28% year over year as of the second quarter of 2023, with Mexico and Colombia delivering higher growth percentages. Thus, it should be of little surprise that revenue of $3.5 billion in the first half of the year was up 71% compared with the same period in 2022.
Since it limited the increases in costs and operating expenses, it reported a net income of $367 million in the first two quarters of 2023. That compares well to the $75 million loss in the year-ago period.
Moreover, the stock offers a compelling buying opportunity. Although it has risen more than 65% so far this year, it sells for significantly less than the $9-per-share initial public offering price from late 2021. It's trading around $7 as of this writing.
Additionally, its forward price-to-earnings ratio stands at around 34. That looks inexpensive considering the rapid revenue increases and the likelihood of triple-digit earnings growth in the near term.
With Nu operating in only Latin America, U.S. investors can easily overlook it. This gives the average investor time to follow the lead of Buffett's team and buy before more prospective shareholders discover this fast-growing fintech stock.
Is Zoom the best deal on Wall Street?
Justin Pope (Zoom Video Communications): Investors might have a bad taste in their mouths from Zoom (ZM 1.57%) stock, a former pandemic darling that has imploded over the past two years. The stock has fallen a whopping 88% from its former high. But Wall Street can overreact in both directions, which seems to be the case with Zoom. Admittedly, Zoom will probably never again experience the growth spurt it had during the pandemic. As you can see below, things have slowed way down since then.
ZM Revenue (TTM) data by YCharts
But Zoom's growth was no fluke; revenue has held up, refusing to backtrack from its early-pandemic levels, a good sign. Additionally, Zoom is not just about video-conferencing. It offers a suite of digital communications tools that it can upsell to its customer base of more than 218,000 enterprises.
The tally of customers spending more than $100,000 with Zoom grew 18% year over year in the second quarter, and remaining performance obligations, which can signal future revenue growth as they're billed out, rose 9% year over year. In other words, investors should see revenue growth accelerate from the low single digits.
Doubling your share price in two years is no easy feat. However, Zoom is a great candidate to be able to pull it off. The potential for increased revenue growth and the company's existing margins have analysts forecasting annual earnings growth averaging 33% over the next several years. That alone could nearly double shares by 2025.
But add in Zoom's compelling valuation, and it gets even better. Shares currently trade at a forward P/E of 15, meaning that Zoom's PEG ratio is just 0.5, signaling the stock is a bargain for its expected earnings growth. Zoom must follow through on its promise, but the stars are aligned for some significant investment returns in the future.
