What are the challenges investors face when dealing with growth stocks in bear markets? How has Coupang managed to thrive despite potential tariff impacts on consumer spending? What future growth potential does Coupang have in the South Korean retail market? How does Alphabet’s performance in the AI space differ from investor perceptions? What are the key financial metrics indicating Alphabet’s strength as a growth stock? Why might long-term investors reconsider their strategy during market downturns?
Growth stocks are not for the faint of heart. In bear markets — like the one investors are experiencing in April 2025 for the Nasdaq Composite Index — growth stocks are going to tumble amid a lot of volatility. As of this writing, many of your favorite growth stocks are down 20%, 30%, or more in just a short few months. Buying into weakness like this can feel scary. What if you don’t perfectly time the bottom? That isn’t the right question to ask. When everyone panics and their time horizons shrink to the next week, that is the time to extend your time horizon and think about buying stocks to hold for the next 10 years. Many growth stocks that are down big look cheap at the moment and could provide fantastic returns over the next five to 10 years. Here are two growth stocks I think can go parabolic and deliver fantastic gains for your portfolio. Worried about tariffs impacting consumer spending in the United States? Then you might like Coupang (NYSE: CPNG), a South Korean online marketplace with similarities to Amazon. It does not sell into the United States and — unless South Korea imposes tariffs on China and other Asian nations — should see minimal disruptions from these tariff policies that are upending U.S. markets. Taking away the tariff noise, Coupang is a phenomenal business with a fantastic track record of growth. Despite foreign currency headwinds when calculating financials in U.S. dollars, Coupang’s revenue boomed 24% year over year to $30.3 billion in 2024. With the U.S. dollar starting to depreciate versus foreign currencies, this headwind may turn into a tailwind in 2025. Shoppers love the Coupang marketplace because of its wide selection and ultra-fast delivery times. It also offers video streaming, grocery delivery, and even installation of appliances and items such as tires for your car. Not even Amazon offers this level of service. With only a small sliver of the overall South Korean retail market, Coupang has plenty of room to grow in the years to come. And it is beginning to generate free cash flow, at $1 billion in 2024. Within a couple of years, I expect Coupang’s revenue to reach $50 billion; $5 billion in earnings, or just a 10% profit margin, is achievable on this revenue base, which is what management is guiding for. Today, Coupang has a market cap of under $40 billion. This means it trades at a forward price-to-earnings ratio (P/E) below 8, a dirt cheap figure for a fast-growing company like Coupang. At these cheap prices, I think Coupang stock is ready to go parabolic over the next decade.
The second stock that could potentially go parabolic is right in the whipsaw of the Trump tariff tantrum. It is technology giant Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), parent company of Google. The stock has been hit in recent months over concerns about artificial intelligence (AI) competition, and this broad market sell-off is now adding to the pain. As of this writing, the stock’s trailing P/E ratio is 18, which is well below the S&P 500 index’s average of 27. Alphabet is criticized for not dominating the AI market, but I don’t think this is the right way to frame the situation. It is the leading researcher and developer of new technology tools and has an advantaged position with its homegrown AI-focused computer chips optimizing its data centers. Investors should see AI as an opportunity for Google Search, YouTube, and Google Cloud to grow, not a competitive threat leading to disruption. Sure, Google will not be a monopoly in search anymore, but that doesn’t mean the company’s revenue is going to zero when it plays in a market that may be worth trillions of dollars in a decade. Investors are seeing this in Alphabet’s financials. Google Cloud revenue grew 30% year over year in the fourth quarter of 2024. YouTube advertising grew 14%. Google Search — which is apparently getting disrupted by AI — grew 12.5% to $54 billion. Yes, $54 billion in revenue in just one quarter. Alphabet also consistently repurchases its stock and just started to pay a dividend to shareholders. Add it all together, and Alphabet looks like a fantastic growth stock to buy and hold for the long haul. Zoom out and focus on the next decade to see that this is a high-quality business you can buy an ownership stake in at a relatively cheap price. Before you buy stock in Alphabet, consider this:
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Brett Schafer has positions in Alphabet and Coupang. The Motley Fool has positions in and recommends Alphabet. The Motley Fool recommends Coupang. The Motley Fool has a disclosure policy.
2 Growth Stocks That Could Go Parabolic
In the ever-evolving world of stock markets, investors often seek opportunities that present the potential for significant returns. Growth stocks—companies that exhibit higher-than-average growth in earnings, revenue, or market share—are often prime candidates for exponential growth. In this article, we’ll explore two growth stocks that analysts are watching closely, and which could potentially experience parabolic growth in the near future.
1. NVIDIA Corporation (NVDA)
NVIDIA has long been recognized as a leader in graphics processing unit (GPU) technology, but what sets it apart today is its expansive strategy in artificial intelligence (AI) and the metaverse. As companies increasingly integrate AI into their operations, the demand for powerful GPUs is skyrocketing, placing NVIDIA at the forefront of a tech revolution.
AI and Data Centers
The burgeoning AI sector is a massive growth opportunity for NVIDIA. Their GPUs are not only crucial for gamers but are becoming essential for enterprises looking to harness the power of artificial intelligence. With the world moving towards AI-driven solutions, NVIDIA’s participation in this sector could lead to tremendous revenue growth.
Moreover, NVIDIA’s Data Center Business has shown impressive growth trajectories, with year-on-year growth in data center revenue in the double digits. As businesses have become data-centric, the need for advanced data processing capabilities has intensified. NVIDIA’s innovations, including its AI platform, could further cement its position as a key player in this burgeoning market.
Gaming and Metaverse Development
The gaming industry continues to expand rapidly, thanks to the emergence of new technologies and platforms. NVIDIA’s GPUs are indispensable for high-performance gaming experiences. Their RTX series has made waves in the gaming community, with features such as real-time ray tracing creating an immersive experience like never before.
With the metaverse gaining traction, NVIDIA is well-positioned. The convergence of gaming and virtual environments presents an unprecedented opportunity for companies actively involved in both areas. As the metaverse concept moves closer to reality, NVIDIA’s technology could serve as the backbone for various applications, further propelling its growth.
Financial Outlook
Analysts are optimistic about NVIDIA’s financial performance in the coming years. With revenue expected to continue climbing at an impressive rate, NVIDIA presents a compelling investment case. If demand for AI and gaming technologies continues to surge, NVIDIA could see its stock price go parabolic.
2. Shopify Inc. (SHOP)
Shopify, a leading e-commerce platform, has redefined how businesses operate online. With the rise of digital commerce, Shopify’s market position and innovative solutions could see its stock soar as more businesses adapt to the online landscape.
E-commerce Expansion
As consumer behavior increasingly shifts towards online shopping, Shopify has steadily gained market share. The pandemic accelerated this trend, with many brick-and-mortar businesses transitioning to e-commerce. With an increasing number of small and medium-sized enterprises (SMEs) choosing Shopify for their digital storefronts, the company’s growth trajectory appears robust.
Shopify’s focus on enhancing its platform, including payment solutions, inventory management, and shipping logistics, serves to improve the user experience significantly. Their recent initiatives, such as integrating advanced AI into their platform to help merchants optimize their offerings, could create additional avenues for growth.
International Market Penetration
Shopify has been actively expanding its presence in international markets. Targeting regions like Europe, Asia, and Latin America presents significant growth opportunities. As global e-commerce continues to gain popularity, Shopify stands ready to capitalize on this trend by offering localized solutions for diverse markets. Companies looking to expand globally often require scalable platforms, and Shopify’s versatile infrastructure can cater to these demands.
Subscriptions and Services Revenue
Shopify’s subscription-based revenue model is another critical growth driver. The monthly fees associated with their plans provide a steady cash flow, while additional services like payment processing and shipping solutions help to boost overall revenue. As Shopify continues to refine these services and expand its customer base, the potential for subscription growth remains significant.
The Bottom Line
In a rapidly changing digital environment, Shopify is well-positioned to continue experiencing substantial growth. With increasing e-commerce activity and the trend towards online retailing showing no signs of slowing, Shopify’s potential to deliver an impressive return on investment remains enticing. If a favorable market environment persists, the company’s stock has the potential to approach parabolic levels.
Conclusion
Both NVIDIA and Shopify represent compelling growth stories with transformative potential. NVIDIA is well-positioned to harness the power of AI and the ongoing gaming and metaverse boom, while Shopify stands as a torchbearer for the e-commerce revolution. As these industries evolve, savvy investors may want to keep an eye on these two stocks. Their innovative solutions and strategies could lead to significant appreciation in value, offering potentially parabolic growth. As always, it’s essential to conduct thorough research and consider your investment strategies carefully before making any financial commitments.
When considering growth stocks that have the potential to go parabolic, it’s crucial to identify companies with strong fundamentals, innovative products or services, and a favorable market environment. Here are two stocks that fit that description:
1. Shopify (SHOP)
Shopify has established itself as a leading e-commerce platform that enables businesses to create online stores. With the continued shift towards online shopping, Shopify is well-positioned to benefit from this trend. The company’s focus on expanding its product offering, enhancing its tools for merchants, and penetrating international markets is expected to drive significant revenue growth. Additionally, Shopify’s emphasis on solutions like Shopify Plus, which targets larger enterprises, could boost its profit margins as businesses seek more robust e-commerce solutions.
2. Cloudflare (NET)
Cloudflare provides a range of security and performance services for websites and applications. As cyber threats become increasingly sophisticated and the demand for fast, reliable digital experiences grows, Cloudflare’s solutions are becoming essential for businesses of all sizes. The company’s commitment to innovation, expanding its product suite, and increasing customer base positions it for robust revenue growth. If Cloudflare continues to enhance its market presence and capitalize on the growing importance of cybersecurity and performance optimization, it could see substantial gains in the future.
Both of these companies operate in sectors that are likely to experience rapid growth, making them strong candidates for consideration among growth stocks with significant upside potential. Always conduct thorough research and consider your own investment strategy before making decisions.