For investors looking at the stock market, perhaps the most important objective is the prospect of growth. While many retail traders prefer to beat the market and capture short-term gains, it is long-term growth that dominates all investment strategies. This has proven quite profitable to many, who aim to up their living standards beyond their present income. When an investor has identified the ideal growth stock for one’s portfolio, it becomes the go-to option to park one’s savings into, which is gradually increased over time. The key goal is to identify a business that is growing or possesses the potential to grow much faster than the market on average. This could be due to a core competency, a strategic advantage, or an innovative market offering.
To help you start off with a similar capital growth strategy, we present to you a list of 5 best growth stock for 2022, each of which could ensure significant growth over the long-term future. Each of the stocks we discuss within the article is well suited to ensure stellar growth for your portfolio due to the unique advantages associated with them.
We begin our list of best growth stock for 2022, with perhaps the most-renowned EV company, Tesla Inc (TSLA). Over the years, Tesla has transformed into far more than just a car company and has expanded into some of the most critical industries that will play a pivotal role in the future.
Under the leadership of Elon Musk, the company has increasingly been taking the shape of a conglomerate, making core investments into areas it deems as being of high growth potential. As a result of these strategic moves, the company has achieved great and innovative strides in battery technology, which could drive costs to plummet in the coming years. Tesla’s commitment to solar energy further positions it as a highly sustainable company with its sights set on the future.
Moreover, the company has been taking a proactive stance with respect to artificial intelligence, facility automation, as well as humanoid robots. Given the data collected by the company for its self-driving car segment, Tesla has been called the most significant AI company in the world. This gives it a tremendous edge over competitors who do not possess the infrastructure to carry out such data-driven optimizations.
Given all these innovative areas of high upside potential, coupled with the company’s robust financials, Tesla could very well be on its way to becoming the first company worth $100 trillion in the long-term future.
The second stock on our list is Warren Buffet’s most prized holding, The Coca-Cola Company (KO).
Everything about the company points to long-term growth. Its various brands hold an incredible grip on the various consumer markets in every region of the world. Many incorrectly assume that the company is close to its maturity with limited upside potential. This, however, is far from the truth. The company has been increasing its investments in areas it feels are closely aligned with its brand. For instance, in late 2021, Coca-Cola fully acquired the sports drink company, Body-armour for a whopping price of $5.6 billion. Given a stellar balance sheet, and its market capitalization of over $260 billion, the company has sufficient access to financing to allow it to fund further growth into promising areas. Coupling this high-growth potential with the fact that KO’s monthly dividend payments can be reinvested into the stock, makes it ideal as a long-term growth stock.
KO has planned over 1500 strategic initiatives for 2022, which largely includes data collection for the identification of new opportunities. The company has identified that its digital program, which offers a direct consumer platform has only covered 6% of the developing markets. Given that these markets consist of 80% of the global population, it’s fair to say that KO is still far from its growth peak. Its journey towards its growth peak make it one of the best growth stock for 2022.
Advanced Micro Devices
Up next, we present one of the leading semiconductor companies in the world, Advanced Micro Devices Incorporated (AMD). In recent years, the company had made major strides in the market, proving worthy competition to its old-time rival, Intel Corporation.
More recently, AMD’s processors have been gaining traction in the semiconductor markets, with a specific focus on cloud servers and notebook devices. Analysts appear largely optimistic about the stock, especially given the growth it is ready to undertake in the wake of metaverse tech updates. Last year, the company made the announcement that Facebook’s parent company, Meta would collaborate with AMD, and its Epyc chips to “power the metaverse”.
The deal confirms AMD’s status as being the lead candidate to deliver the infrastructure that would ensure smooth computing across the wider metaverse ecosystem.
AMD, which is already winning on the competitive front against Intel, is set to place its mark as the computing and processing solution provider of the future. Its innovation-led strategy has enabled it to deliver processors to meet the high data demands of the future. These qualities make the stock a must-have for those seeking long-term growth in the future.
Daqo New Energy
The fourth stock we bring to you is the Chinese polysilicon manufacturer, Daqo New Energy Corp (DQ).
One seldom hears of high-growth stock suggestions without mention of the solar industry. This is because the world continues to transition towards clean energy, with solar being the most abundant. In light of these realities, DQ is perhaps the most promising stock in the solar industry.
The company boasts some of the highest polysilicon purity levels whilst committing to a cost-leadership strategy. As the world continues to see surging solar demand, the low-cost polysilicon supplier, Daqo would continuously see growth. Given that solar energy is still at an early stage, and far from dominating global energy industries, calling the upside potential for the company enormous would be a serious understatement.
Speaking more on the company’s cost leadership, the Daqo is based in the Xinxiang region of Eastern China where there is an abundance of coal resources. The result is extremely low costs of production which make it extremely difficult for any competitor to keep up. These features coupled with the increasing prices of polysilicon ensure wide profit margins for the company through which it could significantly upscale, and enhance its capacity. Given the transitory phase global energy industries are in, this spells a major green flag for growth-seeking investors, as solar demand is not going anywhere.
The final stock on our list, but certainly not the least, is the US retail stock, Costco Wholesale (COST). Costco is a household name in the US, which needs no introduction. The company has fared well against its top rivals Walmart and Target.
Looking at its stock price trajectory, stable yet steady growth is evident, with Costco ensuring capital expansion to its shareholders in a consistent manner. Even in the prior year, when the S&P 500 fell by 10%, Costco, actually climbed by an impressive 20%, which indicates it is performing much better than the wider market during periods of stress.
As a customer-oriented retailer, Costco has always thrived in periods of economic uncertainty. When hit with the prospects of inflation, the company has been one of the very few in the market that limits price increases, in order to offer greater value to its customers. The result of this strategy is surging membership renewal rates, which positions it for significant growth. This has consistently managed to deliver Costco a competitive edge, with the company threatening to capture further market share and placing itself among best growth stock for 2022. With the present economic climate and the potential for a looming recession, Costco could see its long-term growth potential further enhance.
With the looming fears of an upcoming recession, investors are rightfully on edge about their longer-term savings taking a hit during the present difficulties. The best investment strategy in these conditions is to opt for high-quality companies, with robust financials, and stable earnings. These would allow investors to embark upon a long-term growth trajectory, which would allow their capital to be substantial in the long-term future. Each of the stocks mentioned herein the list of best growth stock for 2022, taps into different domains of high promise, each of which holds the potential to see your capital amount take on a steady climb throughout the coming decades