Growth investors are always on the lookout for stocks that are capable of delivering outsized returns on a sustainable basis. The histories of companies like Nvidia and Amazon show that massive gains are possible, but to enjoy the biggest profits, it helps enormously to spot such stocks relatively early.
Admittedly, apparently promising growth stories can get derailed by a variety of factors. But based on their potential, these two names look like growth stocks worth considering.
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Reddit (RDDT +5.63%) has stood out among social media companies for its unusual approach to its business. Around 116 million daily active users visit the site, exploring communities it calls subreddits. Users visit and participate in these subreddits looking for breaking news, fandom communities, discussions, and help with problems, among many other purposes.
Like other social media sites, Reddit depends primarily on digital advertising for most of its revenue. Moreover, it is the leader in its type of social media site -- a niche where its copycats have typically failed. For this reason, it is unlikely that even well-funded peers such as Meta Platforms will unseat Reddit in its segment.
Additionally, its popularity has translated into solid financials. In the first nine months of 2025, Reddit reported almost $1.5 billion in revenue, a 69% increase from the same period in 2024.
Furthermore, Reddit cut its expenses over that period, which helped make it profitable for the year, with a net income of $278 million in the first three quarters of 2025. Reddit lost $555 million in the same period in 2024.
In line with that turn to profitability, the social media stock is up by more than 55% over the last year. Also, while its P/E ratio of 123 may seem high, such lofty valuations are common for newly profitable companies.
NYSE: RDDT
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Finally, its forward P/E of 51 indicates both the likelihood of continued profit growth and a valuation that could still attract investors conscious of excessively high multiples. These factors should mean Reddit remains a stock with monster potential for the next five years and perhaps beyond.
Nu Holdings
Another company still growing into its potential is NuBank parent Nu Holdings (NU 3.26%). The financial services giant operates in Latin America and has become the largest all-digital bank outside of Asia.
However, to understand Nu's success, one must know how personal finance and banking worked in Latin America historically. A small number of banks dominated the region's markets, and their methods had left large portions of the population without bank accounts or credit cards.
Moreover, Latin American nations have at times contended with high levels of political and economic instability. That has given companies based in the region a risk profile that many U.S. investors aren't comfortable with. However, those who can stomach that added risk will find a lot to like in Nu.
Nu changed the retail banking and credit game in its home country of Brazil by issuing nearly 21 million of its citizens their first credit cards. That country now is home to 110 million of Nu's 127 million customers. So successful was its approach that about 60% of Brazil's adult population has at least one NuBank account.
In its newer markets, Mexico and Colombia, it appears to be on track to repeat that success. It's likely to enter more Latin American markets in the future and has even applied for a bank charter in the U.S.
In the first nine months of 2025, it generated $11 billion in revenue, an increase of 30% compared to the same period in 2024.
The one downside of its success is that it has boosted its operating expenses, specifically, its interest and other financial expenses, which grew by 53%. Nonetheless, since it controlled expense growth in other areas, its net income still rose by 39% to almost $2.0 billion.
Investors are noticing. The fintech stock is up by about 45% over the last year and closed trading Thursday at a record high. Furthermore, its P/E ratio stands at just 34, an attractive valuation given its fast-growing profits.
NYSE: NU
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Investors who choose to buy and hold this stock will need to be able to handle the added risks and volatility that come with investing in a Latin American company. In my view, its growth potential over the next five years (and possibly longer) should make it a risk worth taking.
