Growth stocks have been leading the market higher for several years, and right now there are no signs of this trend slowing down. While growth stocks can be found in any sector, two of the most common places to find them are in technology and the consumer spaces.
Let's look at five no-brainer growth stocks to buy now.
Nvidia
Nvidia (NVDA 1.10%) is the clear-cut artificial intelligence (AI) leader, and it's not even close. The company captured an absurd 92% share of the graphics processing unit (GPU) market in the first quarter, and yet it's still in full-on growth mode. Despite topping a $4 trillion market cap, Nvidia continues to expand rapidly, driven by demand for its data center chips.
Its real moat, though, is its CUDA software platform. Nvidia got CUDA into the hands of researchers and academics way before AI went mainstream, and now it has a dominant developer ecosystem built on its tools and libraries.
If you listen to any of the commentary from cloud computing companies, AI infrastructure spending is only increasing. Meanwhile, the company just got the green light to resume H20 chip sales in China. While the Chinese government wants Nvidia to provide security proofs, demand is already reported to be robust. At the same time, its automotive segment is well positioned for a robotaxi future.
Given the growth opportunities still in front of Nvidia, it looks like a no-brainer long-term winner.
Alphabet
Alphabet (GOOGL 1.27%) (GOOG 1.29%) continues to be wildly underappreciated. With Alphabet trading at just 19 times forward earnings with a forward price/earnings-to-growth ratio (PEG) of 0.8, the market is treating it like its best days are behind it. However, nothing could be further from the truth.
Google Search isn't going anywhere -- it's evolving -- and Alphabet is steering that evolution with AI Overviews, its Gemini model, and multimodal search tools like Circle to Search and Google Lens. In Q2, its search revenue accelerated to 12% growth, and over 2 billion people are already using AI Overviews.
Its cloud computing unit, Google Cloud, is also firing on all cylinders, with revenue up 32% and segment profit more than doubling last quarter. AI is the big driver, as customers create AI models and tools through its Vertex platform and then deploy them on its infrastructure. Its custom-built Tensor Processing Units (TPUs), meanwhile, have been designed specifically to optimize AI workloads within Google Cloud's TensorFlow framework, leading to increased efficiency and a cost advantage.
At the same time, YouTube is holding its own with ad revenue up 13% in Q2, and its Waymo robotaxi is expanding into more cities. All in all, Alphabet is a great mix of leading and emerging businesses.
GitLab
GitLab (GTLB 0.13%) is no longer just a code repository -- it's turning into the software development backbone for the AI era. With GitLab 18, the company introduced more than 30 new features, including its Duo Agent, which enables AI-driven testing, deployment, security, and monitoring. That's important, since only about 20% of a developer's time is spent writing code. GitLab is now helping with the drudgery of the other 80%, helping developers become more efficient.
The company has already been a strong revenue grower, consistently growing its revenue by 25% or more since its stock debuted in 2021. AI, meanwhile, has only accelerated software development. While some fear that AI will lead to fewer coders, given the value of its platform, there is a good chance the company could eventually shift from a seat-based model to consumption-based pricing, giving the increasing value proposition of its platform
In a world where AI is changing how software gets built, GitLab's end-to-end platform is becoming vitally important. That puts it in a very strong spot going forward.
Image source: Getty Images.
Dutch Bros
Dutch Bros (BROS 6.29%) might not be a household name outside the western U.S., but it's one of the most promising restaurant growth stories out there. The company just passed 1,000 locations and has a clear path to achieve its goal of 2,029 locations by 2029. Its model is capital-light, with a small drive-thru-only footprint that makes expansion quick and cost effective. Its long-term goal, meanwhile, is to have around 7,000 locations nationwide.
But there's more to the Dutch Bros story than just expansion. Its same-store sales have been strong, and the company is still in the early stages of rolling out mobile ordering, which should speed up throughput and help drive peak-hour volumes. It's also testing hot breakfast items, which could unlock a major new revenue stream. Dutch Bros has been getting less than 2% of its sales from food items, compared to nearly 20% for Starbucks, so this is a huge opportunity.
Meanwhile, the brand resonates with younger consumers; it doesn't spend heavily on marketing, its prices are generally cheaper than rival Starbucks', and its overhead is pretty low given its drive-thru model. All in all, Dutch Bros is one of the best growth stories in the restaurant space.
e.l.f. Beauty
e.l.f. Beauty (ELF -3.42%) already disrupted the mass cosmetics market, and now it's looking to do the same in prestige beauty with its Rhode acquisition. Rhode is already generating over $200 million in sales with no retail footprint, but that's about to change. Rhode is rolling out at Sephora in the fall, and it will benefit from e.l.f.'s strong retail relationships in the future.
Rhode founder Hailey Bieber will stay on to help run the creative side and brings a lot of clout to the brand. Meanwhile, e.l.f.'s influencer strategy has helped it take a huge share in the mass cosmetics market over the past few years, so expect this marketing network to help drive growth at Rhode as well. In addition, with Rhode having only a modest product lineup, an increased product assortment is also likely in the cards.
e.l.f. has a huge runway to grow the already viral Rhode brand -- from increasing distribution, to adding marketing, to expanding the number of Rhode SKUs it sells. After e.l.f. hit a recent bump in the road in terms of growth, expect Rhode to become a huge growth driver for the company in the coming years.
