With the market hovering near historic highs, it might seem like a risky time to buy high-growth stocks. The Fed also hasn't cut its benchmark rates this year, and those elevated interest rates could prevent investors from rotating back toward riskier investments.
Yet, most analysts still anticipate one or two more rate cuts this year -- and those reductions could drive the market to fresh all-time highs. It might be smart to scoop up these three high-growth tech stocks before that happens: Navitas Semiconductor (NVTS -2.73%), Arista Networks (ANET 17.18%), Symbotic (SYM -0.90%).
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Navitas Semiconductor
Navitas produces gallium nitride (GaN) and silicon carbide (SiC) chips, which can resist higher voltages, switch faster, and operate at hotter temperatures than silicon chips. That resilience makes them well-suited for laptop adapters, data center power supplies, EV chargers, solar inverters, industrial motor drives, and energy storage solutions.
Navitas previously generated most of its growth from the EV charging, solar, and industrial markets, but a lot of its future growth could come from AI-oriented data centers. Nvidia recently selected Navitas' GaN and SiC chips to process its AI workloads at its own next-gen data centers, and other companies could follow that lead over the next few years. Navitas also expects to profit from a growing need for fast chargers in the consumer electronics and EV markets.
From 2024 to 2027, analysts expect its revenue to grow at a CAGR of 17% as its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) turns positive in the final year. It isn't a bargain at 15 times next year's sales, but its early-mover advantage in the nascent GaN and SiC markets justifies that premium valuation.
Arista Networks
Arista is a major producer of networking hardware and software. It sells low-latency switches that are optimized for hyperscale cloud deployments, and its modular operating system, EOS, is compatible with a broad range of open networking protocols. It mainly serves cloud and AI giants like Meta Platforms and Microsoft.
A lot of Arista's recent growth was driven by the rapid expansion of the AI market. That's admittedly a double-edged sword because it doesn't have much pricing power with those hyperscale customers, while the unpredictable tariffs are further compressing its gross margins.
Despite those near-term challenges, Arista should continue to grow much faster than its networking peers as the AI boom continues. From 2024 to 2027, analysts expect its revenue and adjusted EBITDA to grow at a CAGR of 19% and 15%, respectively. It isn't cheap at 32 times next year's adjusted EBITDA, but it could be a great way to profit from the growing need for AI-oriented data center and infrastructure upgrades.
Symbotic
Symbotic develops autonomous warehouse robots for processing pallets and cases. It claims a $50 million investment in just one of its modules (robots plus software) can generate $250 million in lifetime savings over 25 years. It generates most of its revenue from a long-term automation agreement with its major investor Walmart. Another big customer is GreenBox, a warehouse-as-a-service joint venture Symbotic set up two years ago with SoftBank (which also owns a stake in the company).
The company's heavy dependence on two of its biggest investors is worrisome, but it's gradually diluting that customer concentration through new automation deals with Target, Albertsons, C&S Wholesale, and other retailers.
From 2024 to 2027, analysts expect its revenue and adjusted EBITDA to grow at a CAGR of 24% and 71%, respectively. Those are incredible growth rates for a stock that trades at just 14 times next year's adjusted EBITDA, and it could head higher in the future as more companies replace their warehouse workers with its automated robots.
