Growth stocks have the potential to generate life-changing returns for investors. And if you’re willing to take on a bit of risk, the payoff can be substantial, especially for turnaround stories. Not every struggling growth stock will rebound and become a big winner, but when it does happen, the returns can be gargantuan.
Three stocks that weren’t even profitable a few years ago but have turned things around to become some of the most captivating growth stocks on the market are Palantir Technologies (NASDAQ: PLTR), AppLovin (NASDAQ: APP), and Carvana (NYSE: CVNA). Here’s how much a $7,000 investment in each of these companies at the beginning of 2023 would be worth now (as of Sept. 18).
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Data analytics company Palantir Technologies has exploded in popularity with retail investors in recent years. It has enhanced its platform via artificial intelligence (AI), which has opened up tremendous growth opportunities, and CEO Alex Karp has done a great job of hyping up Palantir’s long-term potential.
In its most recent quarter, the company reported more than $1 billion in quarterly revenue for the first time thanks to 48% year-over-year growth. It also posted strong net income of $326.7 million. The business has come a long way from the days when it was generating huge losses. As recently as 2022, it incurred a net loss of $373.7 million on annual revenue of $1.9 billion.
Palantir has been able to generate returns of more than 2,600% since the start of 2023. A $7,000 investment in the company back then would be worth nearly $193,000 today.
Its valuation, however, has become inflated in the process. With a price-to-earnings (P/E) ratio of more than 570 and the highest price-to-sales valuation in the entire S&P 500, it may be running out of room to run much higher. This is one of the most expensive stocks any investor can own right now.
A tech stock that’s been even hotter than Palantir over the past couple of years is AppLovin. The advertising technology company has also utilized AI to enhance…
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