The emerging opportunities in artificial intelligence (AI) and quantum computing could spell life-changing returns for investors. The best stocks in these industries are going to be volatile, but that is par for the course for high-growth companies that can deliver monster returns over time.
Let's take a look at three high-growth stocks to buy before the end of the year.
Image source: Getty Images.
1. Palantir Technologies
Over the last three decades, the growth of the internet, e-commerce, and cloud computing has created tremendous wealth for those who invested early in the leading stocks in these industries. AI promises to be the next industry that will create lasting wealth for investors. Palantir Technologies (PLTR +4.88%) is a leading AI software company that could change the fortunes of patient investors who hold shares for the long term.
Palantir is a rare breed. It's seeing robust revenue growth, which came in at 63% year over year in the recent quarter. But what's most remarkable is its profitability. Despite generating less than $4 billion in trailing-12-month revenue, Palantir has achieved a Rule of 40 score of 114 (revenue growth plus adjusted operating profit margin). This is rare for a company of this size, but it's also why the stock trades at a high multiple of sales and earnings. It has a long runway of growth and is already generating margins typically reserved for large, mature software companies.
NASDAQ: PLTR
Key Data Points
Palantir is earning such a high margin on its revenue because it is providing businesses with significant value. It organizes a company's data and makes sense of it using large language models. Major companies are willing to spend a premium to use its software because Palantir is not just selling AI models, it is selling margin expansion. One telecom company expects to save hundreds of millions of dollars using Palantir.
Palantir's deal momentum is accelerating. Companies are increasingly signing larger deals, with the total contract value for U.S. commercial transactions surging 342% year over year in the last quarter. Analysts project Palantir's revenue and free cash flow to grow at approximately 40% annually through 2029. That level of growth should drive further market-beating returns for investors.
2. Innodata
Innodata (INOD +10.63%) benefits from the growing demand for high-quality data to train AI models. It's a classic pick-and-shovel play in the AI market, offering robust growth prospects.
NASDAQ: INOD
Key Data Points
The company's full-year revenue for 2025 is expected to increase by 45%. Its third-quarter revenue growth came in at 20% year over year, down from the higher rates reported earlier in the year. This highlights one drawback of Innodata's business model. Quarterly revenue growth can be inconsistent due to the timing of when a company uses its services.
However, the long-term trend indicates significant upside. Management noted its deal momentum remains strong, with revenue from six of its largest customers set to grow "quite substantially" next year, as CEO Jack Abuhoff explained.
Innodata's competitive advantage in the data solutions market is built on trust. Relationships with its large customers are accelerating based on Innodata's ability to deliver optimal outcomes. Big tech is banking its future on AI, and it trusts Innodata to provide quality data to improve its models.
The stock trades at 40 times next year's earnings estimate, down from the recent 70 forward earnings multiple. The recent dip is an ideal opportunity to consider buying a few shares.
Image source: Getty Images.
3. IonQ
Quantum computing is an early-stage technology with enormous potential to solve complex problems, including the discovery of new medical treatments. IonQ (IONQ +12.49%) has been investing in quantum computing technology for over 25 years, making it a leader that is now experiencing accelerating revenue growth.
IonQ saw its revenue surge 222% year over year in the recent quarter. It is executing well on expanding the commercialization of its technology by bringing its new Tempo quantum computer to market ahead of schedule.
NYSE: IONQ
Key Data Points
The company hasn't yet turned a profit, but it is successfully raising capital to fund its investments, signaling growing interest from institutional investors. IonQ has a robust patent portfolio, positioning it well to become a leader in this rapidly growing market.
Even after the recent pullback, the shares remain expensive, trading at 75 times next year's revenue estimate. However, as management noted on the Q3 earnings call, they are just scratching the surface of their potential. Just buying a small position as part of a diversified portfolio and holding for a decade or longer might be all you need to realize significant gains.
