Investing in the stock market is an excellent way to build lasting wealth over the long term. By leveraging the power of compounding returns, you can grow your nest egg into a significant amount of money for retirement or other financial goals in mind.
There are many approaches to investing, but one popular option is investing in growth stocks. These stocks tend to be fast-growing companies that are disrupting industries, leveraging technology, or tapping into previously underserved markets.
If you're looking for growth stocks and have $1,000 to invest, here are three excellent businesses to invest in today.
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Alphabet
Alphabet (GOOG 1.54%)(GOOGL 1.70%) has a wide-ranging business, including Google Search, digital advertising, YouTube, Android, Google Cloud, and moonshot bets on self-driving vehicles (Waymo) and AI research (DeepMind).
Advertising revenue continues to make up the lion's share of Alphabet's revenue. Last year, online advertising made up 75% of its total revenue. Some concerns emerged this year that Google could lose its strong position in search due to the rise in large language models (LLMs).
To address this, Google integrated its own Gemini LLM model into its search engine through AI Overviews. The company noted an increase in queries as a result, and it now boasts over 2 billion users. In the third quarter, Google Search and other advertising revenue jumped 15% to $56.6 billion.
NASDAQ: GOOGL
Key Data Points
Another positive for Google is its full-stack approach to artificial intelligence (AI). As mentioned, the company has its own Gemini LLM that it integrates into its suite of Google products. However, perhaps most importantly, it has its own custom-made application-specific integrated circuits, called Tensor Processing Units (TPUs), specifically designed for neural network machine learning. In November, Meta Platforms announced it would spend billions to buy these chips, the first time Alphabet has made them available to outside customers.
Alphabet has done an excellent job building out its infrastructure, including data centers, hardware, and software. It will continue to be a key player amid the AI boom, making it an excellent growth stock for the long haul.
Nu Holdings
Nu Holdings (NU 3.42%) has taken the Brazilian banking industry to the next level. In under a decade, the digital bank has grown to 107 million customers in Brazil, representing over 61% of the region's adult population.
What Nu has done so well is leverage the growing adoption of cellphones in the region and create an easy-to-use app that has brought banking to millions of previously unbanked or underbanked individuals. It has since expanded to other areas that need banking services, including Mexico and Colombia. The bank now has 127 million total customers, representing a 16% increase from one year ago.
NYSE: NU
Key Data Points
Nu's not done growing, and it wants to use its platform to cross-sell to its massive customer base. Beyond banking and credit, the company offers travel, mobile cellphone service, and shopping through Nu Marketplace.
In Mexico, it received approval from the Comisión Nacional Bancaria y de Valores (CNBV), along with Banxico and the Mexican Ministry of Finance (SHCP), to convert into a bank in the region. Obtaining this bank license enables Nu Mexico to raise deposit limits and also offer a range of products, including investments and payroll loans, which should drive further growth.
Interactive Brokers
Interactive Brokers (IBKR 2.90%) provides a trading platform for tech-savvy investors. The company caters to both professionals and individual investors, offering trading in stocks, options, crypto, futures, mutual funds, exchange-traded funds (ETFs), and event contracts.
What makes it stand out is its industry-beating margins. Last year, Interactive Brokers generated a pre-tax profit of 72%, an excellent margin in the financial industry. The reason it can generate such stellar margins is that the company is focused on automating as much of its trading platform as possible.
NASDAQ: IBKR
Key Data Points
A majority of its senior managers are software engineers, and their goal is to continually refine and develop Interactive Brokers' trading platform. Not only does this give the company a cost advantage, it also enables it to be one of the lowest-cost brokers in the industry.
Interactive Brokers is a solid growth stock that'swell-positioned for continued adoption of low-fee trading and active trading across its products. If you're in search of a business that generates solid cash flow and steady growth, Interactive Brokers is another great growth stock to own.
