Prediction: 2 Growth Stocks That Can Turn $500,000 Into $1 Million by 2026

Since 2022, the U.S. equity market witnessed significant turbulence amid macro headwinds, supply chain challenges, and geopolitical tensions.

However, despite this, the potential of a long-term investment strategy cannot be ignored. For a whole decade prior to 2022, investors enjoyed impressive returns, especially from growth stocks.

Hence, it only makes sense to delve into these two promising stocks such as Symbotic (SYM 1.62%) and Confluent (CFLT 2.98%) that have the potential to double over the next few years -- albeit for the patient investor who is ready to overlook minor hiccups in the companies' growth trajectory. Investing in these technology front-runners could potentially transform a $500,000 investment into a staggering $1 million.

1. Symbotic

Shares of leading warehouse automation technology player Symbotic are up by nearly 250%. The company helps clients reduce costs, optimize inventory, reduce human intervention, and improve overall productivity at the warehouse with an AI-powered robotic and software system.

Boasting over 490 patents, this robotics-based proprietary state-of-the-art system claims to have a 99.99% accuracy in tasks such as processing pallets and cases at the warehouse. All this is quite impressive, especially since labor strikes, rising fuel costs, congested ports, and other challenges are disrupting logistic networks across the world.

Major retail chains such as Walmart, C&S Wholesale Grocers, and Albertsons have been quick to come on board and have implemented the company's AI system. In fact, Walmart had an ownership stake in the company before the latter went public. Now, the retail behemoth is the company's biggest client (accounting for nearly 87% of revenues in the first nine months of fiscal 2023). Symbotic's collaboration with Walmart to automate all of its 42 regional distribution centers in the U.S is also playing a significant role in boosting the former's revenue streams

However, some investors may be worried about Symbotic's overreliance on Walmart. However, this issue may be resolved to some extent in the coming years. Symbotic forged a new warehouse-as-a-service joint venture with SoftBank called GreenBox, wherein the latter will be purchasing automation systems worth $7.5 billion exclusively from the company.

Symbotic also posted impressive financial metrics in the recent quarter (third quarter of fiscal 2023, ending June 30). Revenues were up by nearly 77% year over year to $312 million, while the earnings before interest, taxes, depreciation, and amortization (EBITDA) loss was only $3 million -- a significant improvement from a $22 million loss in the same quarter of the previous year.

Analysts expect Symbotic's fiscal 2023 sales and fiscal 2025 sales to be nearly $1.1 billion and $2.5 billion, respectively. The company is currently trading at a price-to-sales multiple of just 2.7x. Assuming that this multiple remains constant (which is highly unlikely for a high-growth company like Symbotic), the stock seems well positioned to double by the end of fiscal 2025 and help turn $500,000 into $1 million.

Considering Symbotic's robust product offering and improving financials, this may prove to be an attractive pick now.

2. Confluent

Data has emerged as the lifeline for the rapidly evolving digital economy. Not surprisingly, the timely execution of actionable insights derived from real-time processing and analysis of data (strategic and operational) can make or break a business in the current digital landscape.

A front-runner in data streaming technology, Confluent is working to meet this market need. It is the first company to commercialize and add new paid features to the already robust open-source distributed streaming platform Apache Kafka. These upgrades are not only simplifying the deployment of Apache Kafka but are also helping businesses cut costs and improve overall efficiency. Being based on open-source Kafka, the company also benefits from community feedback, which facilitates continuous improvement of its offerings.

Thanks to its comprehensive data-streaming solution and robust partner ecosystem across geographies, Confluent managed to build a strong base of nearly 4,830 customers at the end of the second quarter, across a range of industries such as media, transportation, gaming, and healthcare. The company is also attracting large-value clients at a healthy clip, with the number of customers spending over $1 million annually surging by 48% year over year to 147 and those spending over $100,000 annually growing by 33% year over year to 1,144 at the end of the second quarter.

Confluent's second-quarter earnings performance was quite impressive, showcasing robust growth across key financial metrics such as revenues, cloud revenues, and earnings. Analysts now expect the company's revenues to more than double from $771 million in fiscal 2023 (ending Dec. 31) to $1.61 billion in fiscal 2026. The company is currently trading at 13.2 times trailing-12-month sales. Assuming that the multiple remains constant, the company seems well positioned to convert a $500,000 investment into $1 million by the end of fiscal 2026.

Given this backdrop, Confluent may also prove to be a smart buy now.