Part of investing in the stock market is taking on a certain amount of risk. There are incredible stocks that are low-risk, like Coca-Cola or Kimberly Clark, both of which are Dividend Kings. But both of those stocks have also underperformed the market long term.

If you're interested in market-beating gains, you might have to up your risk tolerance, but that doesn't mean taking on excessive risk with unproven or dubious stocks. It means finding companies with strong fundamentals, great management, and large growth opportunities.

If you do your homework, you can find many stocks like this, and they can supercharge your portfolio. Most investors should have a diversified portfolio that features some low-risk, dividend-paying stocks as well as high-growth ones. Even if you end up losing money on some of your picks, it can take just one big winner to offset those losses many times over.

If you have $1,000 to invest after paying off debts and setting up an emergency fund, On Holding (ONON -2.91%) and Toast (TOST 2.08%) are top growth stocks to buy now.

1. A competitive player taking on activewear leaders

Athleisure has become more than a passing fad. Despite the return to the office for many people, athleisure and activewear continue to grow as a portion of the overall apparel market. Athleisure is expected to see a compound annual growth rate (CAGR) of 24% through 2028, according to Market Research Guru. Compare that with an expected CAGR of 7% for the overall sportswear market, according to Fortune Business Insights. Meanwhile, activewear titan Nike has taken the top spot in Piper Sandler's annual Taking Stock With Teens survey in both apparel and footwear, and Lululemon Athletica took the second spot in apparel this year.

Many small, premium brands have moved in to fill this niche, including On Holding, which is dedicated to performance technology and comfort. The company is best known for its CloudTec running shoes, which have become a sensation in premium athletic footwear. It has crushed its competition in terms of both top and bottom-line growth over the past three years.

ONON Revenue (TTM) Chart

Data by YCharts.

And it's really just beginning to scratch the surface of this opportunity with only $1.9 billion in trailing-12-month revenue, or about a third the size of its closest large competitor.

On stock is up over 75% this year, and if you buy now, you could be unlocking a massive opportunity.

2. Bringing results for restaurants

The second hot growth stock, Toast, markets software-as-a-service (SaaS) plans for restaurants. Its software automates almost anything you need to run a restaurant, from menu creation to payment processing and everything in between. This makes operations, ordering, delivery, and accounting go faster and smoother, leading to increased customer satisfaction and cost savings. It's a complete solution targeting a specific industry, which gives it an edge against small business solutions that are geared toward a general market. It says its biggest competitor is Block's Square seller's business.

Toast sees a $15 billion serviceable addressable market with a global $110 billion market opportunity, and it has $1.2 billion in trailing-12-month earnings. It's growing at a fast clip with subscription revenue outpacing total revenue. That's a "sticky" source of revenue since subscribers provide reliable monthly income. However, fintech revenue is much larger since Toast collects fees from payment processing.

Metric (YOY Growth) Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023
Total revenue 55% 50% 53% 45% 37%
Subscription revenue 96% 76% 80% 59% 46%
Fintech gross profit 74% 71% 65% 55% 36%

Data source: Toast quarterly reports. YOY = year over year.

Toast is reporting growth from both new users and higher adoption of products per user. Client locations increased 34% year over year to 99,000 in the most recent quarter, and the number of locations using six or more products increased from 39% to 43%.

The company is still reporting net losses, but they improved from $98 million to $31 million in the third quarter. It briefly posted net profits at the end of 2021 before severe inflation hit, demonstrating that it can be profitable. Toast stock trades at a price-to-sales ratio of 2.5, an attractive valuation considering Toast's high growth rates. Now is a great time to buy the stock.