Short-term unpredictability has been the name of the game on Wall Street since this decade began. The first four years of the decade saw all three major stock indexes pivot between bear and bull markets in successive years, with no index enduring wilder swings than the innovation-fueled Nasdaq Composite (^IXIC 0.12%).
During the 2022 bear market, the Nasdaq lost a third of its value. But since the green flag waved in 2023, the Nasdaq Composite has surged higher by 61% and notched multiple record-closing highs. There's absolutely no doubt that this growth-focused index is squarely in a bull market, albeit a fairly young one.
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While some investors might be apprehensive about putting their money to work on Wall Street with the Nasdaq Composite at an all-time high, history shows that every stock market correction and bear market throughout history in the major indexes has eventually been cleared away by a bull market rally. This is to say that any time can be an opportune time to put your money to work on Wall Street if you're a long-term investor.
Furthermore, value can be found -- even among growth stocks. Investors simply have to be willing to search for these hidden treasures.
What follows are four unparalleled growth stocks you'll regret not buying in the new Nasdaq bull market.
Amazon
The first exceptional growth stock investors can confidently add to their portfolios, even with the Nasdaq running to fresh highs, is e-commerce leader Amazon (AMZN -0.09%). Despite select predictive indicators and money-based metrics signaling a heightened risk of a U.S. recession, Amazon's most-important operating segments are perfectly positioned to thrive.
Although Amazon is best known for its online marketplace, which brought in an estimated 37.6% of U.S. online retail sales in 2023, the company generates most of its operating cash flow and income from segments that aren't necessarily as consumer-facing.
Nothing is more important to Amazon's future than the continued growth of Amazon Web Services (AWS), the world's top cloud infrastructure service platform, with an estimated 31% share as of the end of 2023, per tech-analysis firm Canalys.
Though AWS recently surpassed $100 billion in annual run-rate sales, enterprise cloud spending is still in its early innings of forecast growth. AWS regularly accounts for 50% to 100% of Amazon's operating income and is the segment fueling its cash-flow growth.
Advertising services and subscription services are vital for Amazon, too. Advertising hasn't grown by less than 20% on a year-over-year basis in more than two years. Meanwhile, the company has strong subscription pricing power with Prime. In exchange for simple perks, such as free two-day shipping on most items from its online marketplace, it encourages more than 200 million subscribers worldwide to stay within its ecosystem of products and services.
Amazon also remains historically inexpensive. Shares can be purchased right now for about 12 times consensus cash flow for 2025. That's a marked discount to the multiple of 23 to 37 times year-end cash flow that investors willingly paid to buy shares throughout the 2010s.
DocuSign
A second unparalleled growth stock you'll regret not buying with the Nasdaq in a young bull market is electronic-signature company DocuSign (DOCU -0.66%).
In recent months, there's been speculation that DocuSign could be acquired and taken private. But CEO Allan Thygesen said an interview with CNBC this past week that his company intends to remain public. While short-term traders who had been banking on a buyout might not be thrilled with these comments, long-term investors should rejoice.
One reason to be thrilled about DocuSign remaining public is its moat in e-signatures. According to Datanyze, DocuSign accounts for more than 67% of the e-signature market. While growth in e-signatures has slowed a bit following the worst of the pandemic and with interest rates climbing (i.e., fewer loans and mortgages are being underwritten), a double-digit long-term growth trajectory is likely for the global e-signature software market.
Another reason to trust in DocuSign is the company's balance sheet. During its January-ended quarter (DocuSign's fiscal year ends on Jan. 31), it repaid the entirety of its outstanding convertible debt. The roughly $1.2 billion in cash, cash equivalents, and restricted cash and investments the company was sitting on to begin fiscal 2025 gives it the flexibility to innovate internally, as well as grow inorganically.
For example, just three weeks ago, the company announced a $165 million all-cash acquisition of Lexion, an agreement-management software company driven by artificial intelligence. Incorporating agreement management into its suite of existing services has the potential to lift DocuSign's growth rate and expand its sales channels.
And its forward price-to-earnings (P/E) ratio of 16 is a bargain for a growth stock with a well-defined moat.
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Green Thumb Industries
A third matchless growth stock you'll be kicking yourself for not purchasing during the new Nasdaq bull market is cannabis multi-state operator (MSO) Green Thumb Industries (GTBIF -0.78%).
The big buzz for marijuana stocks is that a long-awaited rescheduling of cannabis appears to (finally) be at hand. This past week, the U.S. Drug Enforcement Administration published its formal proposal that would see cannabis move from a Schedule I controlled substance to a less-stringent Schedule III controlled substance.
While moving cannabis to Schedule III won't legalize it for recreational purposes, it would no longer subject cannabis-touching businesses, including MSOs, to Section 280E of the U.S. tax code. Section 280E only allows businesses dealing with Schedule I and II controlled substances to deduct cost of goods sold. If and when this move is made official, MSOs like Green Thumb will owe far less in federal tax, which should translate into faster earnings growth.
What separates Green Thumb from a sea of other MSOs is its product mix. During the first quarter, it generated 57% of its sales from derivatives, which include vapes, edibles, pre-rolls, concentrates, beverages, and health and beauty products. Derivatives have higher prices and substantially better margins than traditional dried cannabis flower. This product mix has played a key role in making Green Thumb profitable.
Green Thumb Industries also has a presence in many of the top-selling cannabis states, including California, Florida, and Illinois. It has 93 operating dispensaries in 14 states, and its back pocket is full of retail licenses that can be used to further expand its dispensary footprint in key markets.
Visa
A fourth unparalleled growth stock you'll regret not buying in the new Nasdaq bull market is payment processor Visa (V -0.20%). Although it is subject to the same cyclical headwinds that have some investors skeptical about Amazon, Visa's clear-cut competitive advantages make it a surefire buy for those with a long investment horizon.
For instance, Visa benefits from disproportionately long periods of economic growth. Even though recessions are a normal and inevitable part of the economic cycle, they tend to be short-lived. By comparison, most economic expansions endure for multiple years. For Visa, it means extended periods of consumers and businesses increasing their spending.
To add to this point, Visa's management team has purposely avoided becoming a lender. Since it's entirely focused on facilitating transactions, the company doesn't have to worry about possible credit delinquencies and loan losses when economic downturns take shape. Not having to set aside capital to cover these potential losses is a big-time advantage in the financial sector.
Similar to the other companies on this list, Visa's growth runway stretches years into the future, if not decades. Aside from being the top dog in the U.S. in terms of credit-card network purchase volume, it has the opportunity to expand its payment infrastructure into chronically underbanked regions of the world, such as the Middle East, Africa, and Southeast Asia. Cross border volume surged 16% in its March-ended quarter.
