Investing in the right growth stocks can lead to tremendous gains for investors. Think of buying Netflix or Amazon, for instance, a decade ago. Rapid top-line gains certainly helped drive their share prices higher.
I'm not saying investors will find a similar opportunity today. However, there's one growth stock that you should consider buying with $1,000 right now. It has some positive qualities that could help boost your portfolio returns over the next five years and beyond.
Image source: Getty Images.
Double-digit growth is normal
Despite ongoing economic uncertainty that's on everyone's mind this year, Uber (UBER 1.40%) continues to prove that its growth is durable. During the three-month period that ended March 31 (Q1 2025), revenue jumped 14%. This was after an 18% gain in 2024.
The top-line bump was driven by 13% and 15% increases, respectively, in gross bookings within the mobility and delivery segments. It's a wonderful sign that these two critical components of Uber's business are expanding at double-digit clips, showcasing robust demand from consumers across the board.
Wall Street consensus analyst estimates call for revenue to grow at a compound annual rate of 14.5% between 2024 and 2027.
Investors might be surprised to learn that Uber is a very profitable enterprise these days. It registered $1.2 billion in operating income and $2.3 billion in free cash flow just in the past quarter. This is a stark improvement from the massive losses being reported years ago.
As revenue continues to increase, Uber should be able to keep benefiting from economies of scale. Its key operating expenses should keep experiencing leverage, rising at a slower pace than the top line. This is typical of an internet-enabled business. Investors should keep close tabs on profitability trends in the years ahead.
Strategically positioned for autonomous vehicle technology
An exciting development Uber shareholders can't overlook is how the business might benefit from the advancements in autonomous vehicle (AV) technology. An obvious risk was that enterprises working on this tech could completely cut out Uber, launching their own ride-hailing services that have no drivers and that offer rides at lower prices.
But only a company like Uber could be able to take what looked like a serious threat to its core business in AV tech and position itself such that it could benefit financially. That's because Uber possesses some important competitive strengths that highlight just how powerful the platform has become.
First, the brand is incredibly strong. Uber resonates so strongly with users that the company's name is used as a verb. That shows how much mindshare the business has gained. And that's what leads to consumers and drivers opening the Uber app over rivals.
Second, Uber has an impressive network effect. With more riders, drivers, and restaurants, the platform is constantly providing more value to all stakeholders. It's a positive feedback loop.
Businesses that operate in the AV space understand how strong Uber's position is in the value chain. That's why Uber continues to sign up new AV partnerships. Alphabet's Waymo is available on the Uber app in Austin, Texas and Atlanta, Georgia. Uber also just announced an expanded partnership with global AV enterprise WeRide to bring driverless rides to more cities across the world. Because Uber has 170 million monthly active users that AV players want access to, it seems to be in the driver's seat.
Room to run
Uber shares are up 46% so far in 2025 (as of May 23). And they are now trading close to their record high, as market sentiment improves.
But the valuation is still reasonable. The stock can be bought today at a forward P/E ratio of 24.4. Given the growth trajectory of the business, its rising profits, and how well it's positioned in the ongoing AV race, Uber is a smart stock to buy with $1,000.
