Investing in quality growth stocks is a proven strategy for generating market-beating returns over time. Investors should identify a portfolio of companies in rapidly expanding addressable markets and allocate a small portion of their investments to these stocks.
While several Canadian companies are growing at an enviable pace, investing in stocks south of the border provides access to a much larger market while offering diversification.
Here are two growth stocks that could turn $500 into $2,500 by 2030.
The Trade Desk stock
Valued at US$48 billion by market cap, The Trade Desk (NASDAQ:TTD) operates a cloud-based tech platform that allows ad buyers to optimize their spending. It provides a marketplace that promotes data-backed ad campaigns, helping advertisers keep up with dynamic market conditions.
The company went public in September 2016 and has since returned 3,419% to shareholders, easily crushing broader market returns.
The Trade Desk grew sales by 28% year over year to US$491 million in the first quarter (Q1) of 2024, while net income stood at US$131 million or US$0.31 per share. Its customer retention rate remained over 95%, as it has for the past decade.
Further, The Trade Desk offers the largest CTV (connected TV) inventory marketplace, providing advertisers with access to premium content across major networks and ad-supported streaming services globally.
Disney announced an expanded partnership with the Trade Desk where the former’s real-time ad exchange will be deployed to meet advertiser demand at scale. Recently, NBCUniversal announced that the upcoming Paris Olympic Games inventory on Peacock would be available to buy programmatically via the Trade Desk.
The Trade Desk is forecast to increase revenue from US$1.95 billion in 2023 to US$2.4 billion in 2024. Comparatively, adjusted earnings per share might expand 24% annually in the next five years.
TTD is forecast to end 2028 with earnings of US$4.1 per share. Today, TTD stock is priced at 64 times forward earnings. So, if it trades at 50 times earnings in 2028, TTD stock will surge to US$210 per share, indicating an upside of almost 115% from current levels.
UiPath stock
Valued at US$12 billion by market cap, UiPath (NYSE:PATH) develops software platforms to automate business processes. It serves companies in verticals such as healthcare, telecom, finance, and banking. The company offers automation services for processes such as accounts payable, claims processing, contact center, and finance and accounting.
Basically, UiPath is a leader in robotic process automation, which automates repetitive tasks and improves operational efficiencies. These processes can be automated with a limited number of available inputs, making UiPath one of the leading artificial intelligence companies globally.
UiPath reported annual recurring revenue of US$1.46 billion in fiscal Q4 of 2024 (ended in January), an increase of 22% year over year. Unlike several other artificial intelligence stocks, UiPath reports a consistent profit and is forecast to report adjusted earnings per share of US$3.6 per share in fiscal 2029.
So, if the tech stock is priced at 30 times forward earnings, UiPath stock might surge to US$108 by May 2028, indicating an upside potential of almost 450% from current levels.
