Just one month into 2025, and it's still a great time to take a fresh look at your investment portfolio. You may be preparing to invest a year-end work bonus or upcoming tax refund, or perhaps there are poorly performing stocks you're ready to move on from. Whatever the case, with the major indexes close to their all-time highs, it can be difficult to find attractive growth stocks at a reasonable price.
This doesn't mean every stock is overvalued, though. If you have $10,000 to invest, here are two rock-solid growth stocks that can double your money over the next five years.
Airbnb: Taking market share in travel
My first recommendation is Airbnb (ABNB +3.05%), the rentals and experiences platform that has become a leading name in the travel industry. The company went public during the COVID-19 pandemic, but shares are still down 40% from the all-time high they reached soon after the initial public offering.
Revenue has tripled since Airbnb went public, sitting at $10.8 billion in the 12 months ended Sept. 2024. And in the third quarter, revenue was up 10% year over year. But even more impressive has been Airbnb's flip to profitability. For a long time, Airbnb was a quintessential unprofitable technology start-up, a problem that was exacerbated by the COVID-19 pandemic. However, during that health crisis, management focused on reining in its operating expenses, and the company has been consistently profitable ever since then. Its operating margin was 25% through the first nine months of 2024 with room to grow given the asset-light and high-margin characteristics of its travel platform.
Today, Airbnb trades at a price-to-earnings (P/E) ratio of 46, which might look expensive on its face. This is a trailing-12-month figure, though, which masks the profit potential of Airbnb's marketplace. On a forward-looking basis, the stock's P/E ratio falls to 30. Meanwhile, its margin can continue to expand with scale, potentially to 30% or more. The company is also taking market share in travel and has been since its inception. The travel industry as a whole keeps growing too, which will provide a tailwind for the business.
Add it together, and Airbnb's net earnings can rise sufficiently over the next five years for this growth stock to double.
OTC: NTDOY
Key Data Points
Nintendo: A new console cycle has arrived
My second recommendation may not look like a growth stock right now, but it's on the verge of a huge product release and trades at a cheap valuation. The company is Nintendo (NTDOY 0.92%), the well-known video game giant behind franchises like Mario and Zelda, among many others.
Nintendo's revenue has fallen over the last few years from a peak of $16.6 billion in 2021 -- when the gaming industry saw a surge in demand thanks to the pandemic -- to $9.8 billion over the last 12 months. Further pressuring its top line has been the depreciation of the Japanese yen versus the U.S. dollar and the increasing age of its Nintendo Switch console. Now, the company is ready to jumpstart its growth with its next-generation console, the Switch 2 .
The company recently confirmed the new Switch will release in 2025, which should result in a multiyear surge in revenue. What's more, Nintendo has worked hard to reduce the cyclicality of its gaming division through subscription services and add-on paid content for its game releases. The company has also successfully expanded outside of gaming into theme parks and movies, which have been a hit among its fans.
Today, Nintendo trades at a P/E ratio of 26, in line with the S&P 500 average. But this is a time when Nintendo's earnings are depressed as the market awaits the Switch 2. In the next five years, I expect Nintendo's earnings to explode just as they did following its previous console launch.
From fiscal 2016, the year before the Nintendo Switch's debut, through fiscal 2021, earnings per share surged almost 30 times higher. So while Nintendo isn't as consistent a grower as Airbnb, the stock is in a prime position to double (or better) over the next five years.
Instead of premium-priced artificial intelligence stocks, add these two growth plays to your portfolio.
