I love growth stocks. As they mature, they often generate fantastic wealth for their owners. Indeed, it's not uncommon for a good growth stock to deliver a 100% return. So, with that in mind, let's take a closer look at two growth stocks that I think could double in price in the not-too-distant future.
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1. Reddit
First, let's talk about Reddit (RDDT -4.30%). The company operates one of the most popular sites on the web, with over 1.2 billion monthly visitors. Its site is organized into communities, with like-minded users flocking to write and view posts on personal finance, entertainment, cooking, and tens of thousands of other topics.
While Reddit isn't a new company (it was founded over 20 years ago), it is a new stock, having debuted via an initial public offering about 18 months ago. In its time as a public company, Reddit's shares have skyrocketed. As of this writing, shares have advanced by more than 600%.
It should come as no surprise that the fuel behind this massive rally is growth -- and a lot of it. Since March 2024, the company's quarterly revenue has exploded from $164 million to $500 million. That works out to about 3x in only 18 months. In its most recent quarter (ended June 30), Reddit reported year-over-year revenue growth of 78%.
The big driver behind Reddit's revenue growth is advertising. First, since Reddit's content is already sorted by category, advertisers can effectively target audiences with known interests. Second, Reddit is still building out its ad capabilities, including video ads and sponsored posts. As it continues to do so, the company will be able to charge more for ad placement on its platform.
In summary, investors with $5,000 to invest may want to consider Reddit now, as its growth prospects remain solid and its recent strong execution is encouraging.
2. Meta Platforms
Next, there's Meta Platforms (META -0.53%). While Reddit has yet to prove how its business model can scale to epic proportions, there are no such concerns for Meta Platforms. Indeed, one of the reasons I like Reddit stock so much is that Meta is the case study of how an internet platform can grow to produce enormous revenue and profits.
Meta went public more than 13 years ago. In 2012, its quarterly revenue totaled around $345 million -- less than what Reddit produces now.
However, in the intervening 13 years, Meta's revenue has mushroomed to an astonishing degree. In its most recent quarter (ended June 30), Meta reported revenue of $48 billion. That's up about 139x since 2012. On a year-over-year basis, Meta's quarterly revenue growth has averaged 39%.
Granted, this growth has slowed over time, and now stands at around 22% as of its most recent quarter, but the company's growth rate is incredible -- particularly given its size.
What's more, Meta's management is far from satisfied. The company is now working on plans to automate advertising across its family of apps. This move would allow brands to directly create and manage their ad campaigns through artificial intelligence (AI) tools supplied by Meta. It could represent a revolution in how advertising works -- and could cut out many ad agencies altogether.
Meta is a stock to consider for investors looking to invest $5,000. The company is still growing at a fast pace, given its enormous size, and a doubling of its stock price is certainly possible as we move forward.
