If you have $8,000 at your disposal, here are three potential growth stocks that could potentially double your investment:
Investing your savings can be a nail-biting experience, especially when considering the median U.S. family savings account balance of $8,000. If you decide to lock that money away in a 10-year CD that earns a 4% annual interest, your savings will only grow to $11,841.95 by maturity. While a 48% increase might seem appealing, it may not keep pace with inflation, and it certainly won't outshine many high-growth stocks.
But if you're up for some risk, consider stashing your $8,000 into a few adventurous growth stocks. There's a chance you could double your money (or even more) over the next decade – or, conversely, endure losses if things don't pan out. Three stocks that might pique the interest of the risk-taking investors are AppLovin, Opendoor Technologies, and SoFi Technologies.
AppLovin: The Artificial Intelligence Maestro
AppLovin is the kingpin of mobile app publishing, also developing AI-powered app monetization tools for other companies. In the past four years, it expanded its empire by acquiring several industry peers, including MoPub and Wurl. In 2022, however, AppLovin's growth flattened due to macroeconomic headwinds that led companies to cut back on advertising spending. But in 2023, as the macroeconomic climate improved and its AI-powered ad discovery services gained traction, it bounced back and turned a profit again.
Analysts forecast double-digit growth for 2024, with revenue projected to soar 40% and earnings skyrocketing 171%. That's a stunning growth rate for a stock trading at a whopping 47 times forward earnings. But, has AppLovin's growth spurt reached its zenith, or can it continue its rise in the mobile app, digital advertising, and AI markets? Only time will tell.
Opendoor Technologies: Riding Out the Housing Storm
Opendoor Technologies is an iBuyer that offers instant cash offers for homes, which it then fixes and resells on its own marketplace. Both Zillow and Redfin also had iBuying platforms, but they both abandoned that capital-intensive market in 2022 as soaring interest rates slowed the housing market.
Opendoor is the last major player standing, but in 2023, revenue plummeted 55% as it bought and sold fewer houses. But as interest rates drop and the housing market recovers, revenue is projected to skyrocket 22% in 2025. At an enterprise value of $2.8 billion, Opendoor's stock seems dirt cheap, and even the slightest positive news about the housing market could propel its stock price skyward.
SoFi Technologies: Reinventing Finances
SoFi, which stands for Social Finance, started as a provider of a broader range of student loans than traditional banks. But by expanding into mortgages, auto loans, personal loans, and insurance services, SoFi has grown its digital-first, data-driven business. SoFi's userbase grew from 2.52 million in 2020 to 9.37 million in 2024, thanks to its one-stop-shop approach. SoFi's membership growth and digital-first business model have allowed it to expand more efficiently than competitors and excel at data collection.
However, SoFi's business is heavily influenced by interest rates. When Federal student loans were frozen from March 2020 to September 2023, SoFi's business took a hit too. But as these headwinds subside, SoFi's business is expected to revive, with revenue and earnings projected to grow 17% and 12%, respectively, in 2025. Despite its hefty valuation, SoFi's room for growth is tough to dismiss, especially since it aims to be a one-stop shop for financial services, replacing other apps in the process.
Before diving into any of these stocks, be sure to do your homework and research their risks and potential returns. Growth stocks can yield impressive results, but they are also prone to volatility. As always, only invest money you can afford to lose.
- If you're interested in high-growth stocks and are willing to take on more risk, AppLovin, a company known for its AI-powered app monetization tools, might be an option. Analysts predict double-digit growth for 2024 with a revenue increase of 40% and earnings soaring by 171%.
- Despite facing challenges in 2023, Opendoor Technologies, an iBuyer offering instant cash offers for homes, shows promising potential for the future. With interest rates dropping and the housing market recovering, analysts project a 22% revenue increase in 2025.
- SoFi Technologies, a digital-first financial services provider offering a variety of loans and insurance services, could also be an investment opportunity. The company's userbase grew significantly from 2020 to 2024, and analysts expect revenue and earnings to increase by 17% and 12%, respectively, in 2025.
- Remember, investing in stocks, especially growth stocks, involves risk and potential volatility. Ensure you conduct thorough research before making any investment decisions and only invest money you can afford to lose.
