2 No-Brainer Growth Stocks You Can Buy With Less Than $100 and Hold at Least 5 Years

Historically, the U.S. stock market is a powerful vehicle for building long-term wealth, particularly for patient investors who can ignore short-term noise and hold on to their winning positions. For instance, an investment of $100 in the S&P 500 at the beginning of 1970 would have increased to $22,136 by the end of 2023, despite multiple periods of economic expansion and recession.

Investors, however, do not need boatloads of cash to start generating wealth from the stock market. Even an amount as small as $100 can set you on a path of investing, especially if you choose stocks of high-quality companies that are riding sustainable long-term trends.

If you have $100 that is not needed to pay bills or for contingencies, consider buying and holding these no-brainer growth stocks for the next five years.

Roku

Connected TV platform company Roku's (ROKU -10.29%) shares fell 23% in a single day (Feb. 15), after the company came out with its earnings results for the fourth quarter of fiscal 2023 (ending Dec. 31, 2023). Although the company's top-line and bottom-line performance was better than expected, investors seem concerned about slow ad spending from the core media and entertainment sector. The company's average revenue per user was also down by 4% year over year to $39.92 in 2023. Many of these headwinds, however, can be considered temporary and there are still several reasons to like the stock.

First, being the leading smart TV player in the U.S., Canada, and Mexico and a streaming content provider agnostic platform, Roku emerged as a major beneficiary of the continued shift of ad dollars from traditional pay TV to connected TV. Furthermore, the increasing availability of ad-supported streaming service tiers on its platform is also helping bring more ad dollars to the company.

Second, Roku ended 2023 with 80 million active accounts globally, up from 70 million accounts at the end of 2022. The company is also focused on improving user engagement by offering a diverse range of content and enhancing content discovery with its tools and expertise. The success of these efforts is apparent since total streaming hours on the platform grew 21% year over year to 106 billion hours in 2023. A large and engaged user base is playing a pivotal role in attracting content providers and advertisers to Roku's platform, which in turn helps bring even more users to the platform.

Roku also has demonstrated significant improvement in financial metrics and became positive on an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) and free-cash-flow basis in 2023, one year ahead of schedule.

Finally, Roku is currently trading at just 3 times trailing 12-month sales, far lower than its five-year average of 9.4x.

Considering the multiple tailwinds and reasonable valuation, Roku seems to be a smart growth stock to buy now.

Confluent

Confluent (CFLT 2.98%) is helping businesses in critical decision-making by facilitating low-latency processing and analysis of huge mounds of real-time streaming data. The data streaming technology has many applications, across industries such as airlines, automotive, the Internet of Things, and programmatic advertising -- in cloud, hybrid, and on-premise environments. With businesses and consumers alike demanding instant access to information and services, Confluent expects its total addressable market to expand from $60 billion in 2022 to $100 billion in 2025.

Based on the open-source Apache Kafka distributed event streaming platform, Confluent's cloud-native enterprise-grade platform continues to benefit from innovation and the feedback of the open-source community. Furthermore, the acquisition of Immerok helped the company integrate Apache Flink stream processing technology with its Kafka platform. This streamlined approach resulted in a more efficient and user-friendly experience for developers and organizations.

Confluent is also helping customers build and scale generative AI applications by connecting their proprietary enterprise data systems with general-purpose large language models. To that effect, the company partnered with multiple AI companies such as OpenAI, Anthropic, and Pinecone.

All these strategic moves translated into robust customer acquisition trends for Confluent. The company ended 2023 with 4,960 customers, up 16% on a year-over-year basis. Confluent is also seeing traction in high-value clients, with the number of customers generating more than $5 million in annual recurring revenue (ARR) more than doubling year over year to 19 in the fourth quarter. Additionally, the company posted a net revenue retention rate of over 125% in the fourth quarter, implying that existing customers were spending more than 25% as compared to the same quarter of the prior year. Confluent now expects its shift from a bookings or committed spending model to a consumption-based model to further drive market share.

Confluent is currently trading at a price-to-sales ratio of 13.5, far lower than its historical three-year average of 18x.

Considering the reasonable valuation and the company's focus on rapidly penetrating the data streaming market, Confluent's shares seem poised to grow rapidly in the coming years.