Businesses that are operating in large and growing industries can make the most rewarding investments. Growth stocks can be volatile, but the long-term gains of patiently holding shares of a company experiencing growing demand for its products can lead to monster gains down the road.

If you have $1,000 to invest right now, here are two stocks that can multiply that investment over the next 10 years.

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1. Datadog

Businesses continue to migrate their data from on-premise servers to the cloud to take advantage of artificial intelligence (AI) services. As the cloud market expands, it is driving demand for Datadog's (DDOG 0.45%) platform that helps companies monitor system performance and security vulnerabilities.

Datadog has consistently grown revenue at high rates and reported a 25% year-over-year increase in the first quarter. This outpaced the broader cloud computing market, which grew 23% year over year, according to Synergy Research Group.

This is a competitive market, with the leading cloud services offering their own observability tools. But Datadog's platform is integrated with all the leading cloud providers like Amazon, Google, and Microsoft. This gives customers more flexibility. Datadog brings everything a user needs to see on a single platform. Companies have even reported saving significant money with Datadog, which explains why it continues to grow faster than the cloud market.

Customers can use Datadog to spot problems with their applications that are delivering poor user experiences, identify security issues, or see the features that are driving the most interactions. This helps companies improve their products to deliver better user experiences.

As companies invest more in AI, it creates even more complexity in their cloud operating environment, resulting in more demand for Datadog. The company said that AI-native customers contributed approximately 6 points of revenue growth in Q1.

These trends point to great return prospects for investors. The cloud observability market is estimated at $53 billion and expected to grow 11% per year through 2028. This is a huge opportunity for Datadog with just $2.8 billion in trailing-12-month revenue.

2. Microsoft

For investors looking for a large and relatively low-risk growth stock to hold for the long term, look no further than Microsoft. Cloud and AI services are essential in today's economy, and there's not a business in a better position to benefit than the leading software brand.

Microsoft is a large business with $270 billion in trailing revenue, but this isn't keeping it from growing revenue and earnings at high rates to fuel the stock higher. Its momentum in the cloud market is a key factor that has sent the stock up 149% over the last five years.

Revenue from Microsoft Cloud grew 20% year over year to $42 billion last quarter. This includes commercial revenue for Microsoft 365 (e.g., Office), LinkedIn, Azure, and other cloud services.

The Azure enterprise cloud service saw accelerating demand across every industry last quarter. Microsoft is benefiting from its partnership with ChatGPT maker OpenAI, where it has the rights to use OpenAI's technology across its services, including its Copilot personal assistant and Azure.

The growing demand for cloud services means more recurring revenue and cash flows. Microsoft's cash from operations grew 16% year over year to $37 billion. Its $69 billion in trailing-12-month free cash flow provides ample resources to invest in data centers to support growing cloud demand, while paying a growing dividend to shareholders.

Microsoft is providing the essential cloud and AI services that every industry will need to remain competitive over the long term. Analysts expect the company's earnings per share to grow at an annualized rate of 12% over the long term, which could be enough for Microsoft stock to outperform the S&P 500.