After a 2022 in the doldrums and a 2023 of recovery, investors finally were able to cheer this month. That's because the S&P 500 reached a new high, signaling we are indeed in a bull market. These sorts of markets only can be declared after they've begun. That's because, to be in bull territory, an index must climb 20% from its bear market low and reach a record high.
But that doesn't mean you're missing out on bull market gains if you only start investing right now. If we take a look into the past, history shows us bull markets generally last much longer than bear markets -- nearly nine years compared with 1.4 years, according to data compiled by Raymond James & Associates.
And the data also show that during the past bull markets from the mid-1970s to the present, each bull market has delivered triple-digit gains. In fact, the S&P 500 climbed more than 280% over a period of about eight years during that last such phase. So, history suggests the S&P 500 -- so far up about 35% since its bear market low -- may advance in the triple digits during this bull market. Here are three top growth stocks to buy before it does.
Image source: Getty Images.
1. Amazon
Amazon (AMZN 3.43%) soared last year as it showed investors it could rebound from tough times -- and go on to grow. Hurt by rising inflation back in 2022, the company reported its first annual loss in almost a decade. But Amazon quickly turned things around by cutting costs, improving efficiency across its fulfillment network, and investing in key growth areas like artificial intelligence (AI).
The efforts are bearing fruit, with Amazon shifting back to growth in operating income and reporting inflows of cash instead of outflows. In the most recent quarter, net sales climbed in the double digits, operating income quadrupled, and the company reported an inflow of more than $21 billion in cash compared with billion-dollar outflows a year earlier.
Most importantly, though, the moves Amazon made will help the company continue to grow earnings -- and the results may be especially spectacular in a market favoring growth.
Finally, I love the fact that Amazon is a leader in both e-commerce and cloud computing -- two markets expanding in the double digits.
All of this makes this stock an excellent one to own in a growth market.
2. Intellia Therapeutics
Intellia Therapeutics (NTLA 3.70%) develops candidates in the potentially game-changing area of CRISPR gene editing. I say "game changing" because gene editing fixes the faulty genes responsible for disease, therefore producing curative therapies.
Just recently, regulators gave the first nod ever to a CRISPR-based product -- CRISPR Therapeutics' blood disorder treatment, Casgevy. This represents a key milestone for the whole industry because it shows regulators are amenable to approving treatments using this cutting-edge technology. (Intellia and CRISPR Therapeutics don't compete directly because they focus on different illnesses.)
Today, Intellia is moving closer and closer to the finish line. The company is enrolling patients for a phase 3 trial of its candidate for transthyretin amyloidosis, a condition that impacts the heart and other organs. And Intellia completed enrollment in a phase 2 trial of its candidate for hereditary angioedema, a condition that involves extreme swelling.
Intellia also is in a solid financial position to move these programs forward, with more than $1 billion in cash that could fund operations through mid-2026.
If Intellia's candidates continue to deliver positive results in their late-stage trials, the stock could move significantly higher from today's levels.
3. Palantir Technologies
Palantir Technologies (PLTR 3.73%) in the most recent quarter reached a big milestone: $72 million in net income, its highest ever. The data analytics company, once best known for its work for governments, has made significant progress expanding its commercial business in recent times.
And Palantir's launch of its Artificial Intelligence Platform (AIP) last year offered it a significant boost. AIP brings the power of large language models to customers, helping them maximize the potential of their data. For example, Palantir, through AIP, has helped customers deploy AI-based process mining and automation workflows. By understanding and streamlining a company's processes, that company can save both time and money.
In the most recent quarter, Palantir's U.S. commercial revenue increased 33%, and its U.S. commercial customer count climbed 37%. This is key because chief executive officer Alex Karp calls this business "the new and emerging center of our company." At the same time, Palantir's government revenue continues to advance in the double digits, showing this company has what it takes to win in both business areas.
Palantir shares trade for 55x forward earnings estimates right now, a very reasonable level for a leading AI growth stock -- and one that could stand out in the new bull market.
