For investors looking to put $1,000 toward buying shares in some growth stocks, I suggest they consider businesses with flywheels that help generate the outsized growth. A business flywheel is
a self-reinforcing cycle related to the company's operations that takes advantage of small, consistent actions compounded over time to create unstoppable momentum, propelling growth. Businesses that achieve this kind of momentum can make great investments.
Two stocks with business flywheels pushing them higher are MercadoLibre (MELI 6.71%) and Toast (TOST 2.54%). And fortunately for investors today, both stocks trade at reasonable valuations.
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1. MercadoLibre
As of this writing, MercadoLibre's stock price is down 34% from its all-time high. But the flywheel that is keeping its business growing is undoubtedly still spinning. In the fourth quarter of 2025, the company grew its revenue by 45% year over year, marking its 28th consecutive quarter of greater than 30% top-line growth.
NASDAQ: MELI
Key Data Points
Latin America's MercadoLibre has operations in e-commerce, financial technology (fintech), credit, advertising, logistics, and more. All parts of the business support growth in the others, which is why I call this a flywheel.
Fintech adoption at MercadoLibre continued to surge in Q4, with 27% monthly active user growth, bringing the total to 78 million users. More fintech users in Latin America is a huge benefit for e-commerce marketplaces, including MercadoLibre's platform. Accordingly, the company's Q4 gross merchandise volume (the dollar value of sales on its platform) took a huge 37% step forward, boosted by more active buyers.
MercadoLibre's flywheel clearly has incredible momentum. But investors don't seem too impressed. The stock now trades at its cheapest price-to-sales valuation since the Great Recession, which I believe is a bargain too good to pass up.
Data by YCharts.
2. Toast
In fairness to the detractors, MercadoLibre is boosting adoption by offering more free shipping, which is a headwind for profit margins. For investors concerned about this pressure on margins, they might want to instead consider restaurant technology company Toast: It should enjoy a margin tailwind as it grows.
NYSE: TOST
Key Data Points
Toast sells payment-processing hardware at a loss. These devices are sold when it gains new customers. Therefore, growth naturally leads to a one-time hit to profits. Toast also processes payments, but competition keeps these margins razor-thin.
However, Toast also has subscription software solutions for its restaurant customers. And these subscription products had a gross margin of 70% in 2025. This is the real moneymaker for the business. And in the fourth quarter of 2025, the company's annual recurring revenue (ARR) hit $2 billion, growing 26% year over year.
According to management, Toast adds new customers more easily in markets where it has high market share because there's greater brand awareness among operators. This creates the flywheel. Adding new customers is a short-term profit headwind. But if it retains its customers, it eventually turns into a tailwind as subscription services take over the revenue mix.
Toast's management believes it has a path to $10 billion in ARR, which would almost assuredly generate substantial profits at that scale. With the stock trading down nearly 50% from its highs and trading at 2.5 times its sales, I believe that Toast is a growth stock to buy now.
Growth is often an extremely beneficial trait for an investment. MercadoLibre and Toast both have flywheels to keep the growth going for the foreseeable future, which is why I like both stocks today.
