One sector that’s seemingly been for dead in 2022 has been hyper-growth stocks. As the Federal Reserve began an interest rate hiking cycle, valuations came down, across the board. However, for companies with earnings expected in further out years, this has dented valuations more considerably.
For those who haven’t noticed, the bond market has priced in interest rate cuts, starting later this year. If that happens, presumably, hyper-growth stocks could receive a nice boost. That’s partially why this sector has come roaring back in 2023, with many top stocks seeing big gains.
Each of the hyper-growth stocks on this list certainly has seen some nice appreciation this year, for this reason. However, there are other structural growth catalysts in place for each of these names.
Let’s dive into three top growth options for investors to consider right now.
Shopify (SHOP)
Shopify (NYSE:SHOP) has built a reputation as a contemporary option for investors looking to ride the e-commerce wave to long-term growth.
By providing small businesses with the tools and resources required to compete with technology giants, Shopify has seen an impressive growth in the post-pandemic environment. Indeed, only a few other firms have been able to match Shopify’s level of performance.
That said, e-commerce volumes have slowed. The pandemic is over, and shoppers are back to hitting the malls (at least to a much greater extent), denting online sales.
Shopify is making a strategic move by expanding its operations beyond just e-commerce. With its recent foray into fintech pursuits and fulfillment services, Shopify is diversifying and vertically integrating its business model.
This tactic shows Shopify’s commitment to sustained growth and success in the future.
Shopify is a substantial long-term investment for three reasons: its leadership in e-commerce, the massive opportunity in the industry, and its comprehensive platform that offers everything merchants need to build and grow their online stores.
Those who like the structural and secular growth catalysts underpinning e-commerce ought to consider this stock. While SHOP stock isn’t cheap, it’s one of the best hyper-growth stocks in this space.
BYD Co. (BYDDF)
BYD Co. (OTCMKTS:BYDDF) is a prominent player in the electric vehicle industry and is now the world’s largest EV manufacturer. Despite not having a widely recognized name, BYD has a remarkable track record and established itself as a highly successful electric automotive company.
BYD, which started as a battery manufacturer, has a market capitalization of around $100 billion and is expanding faster than rival Tesla (NASDAQ:TSLA).
Berkshire Hathaway’s (NYSE:BRK-B) investment in the company, according to Berkshire Vice Chairman Charlie Munger, is the company’s best-ever investment. According to Munger, BYD is so far ahead of Tesla that it’s almost laughable in China.
BYD has positioned itself as a significant contender in the electric vehicle market, with an impressive revenue and profit growth record. One of the most encouraging aspects of BYD is its ability to generate profits, which is not an everyday achievement in the EV industry.
BYD, a major Chinese automaker, made a significant shift in 2022 by producing solely electric vehicles, including both battery electric vehicles and plug-in hybrid electric vehicles.
The company had impressive sales of over 1.85 million electric cars in 2022, which included hybrids. Furthermore, EV sales tripled for BYD in both 2021 and 2022.
Nvidia (NVDA)
The unstoppable AI revolution in 2023 could mean good things for Nvidia (NASDAQ:NVDA) stock, which is currently trading near its 52-week high.
CEO Jensen Huang is devoted to machine learning, and the company is ready to utilize AI in a great deal of applications. Accordingly, given the interest around these hyper-growth areas, many invests are betting that higher share prices could be in store moving forward.
The recent downturn in the PC industry has significantly affected Nvidia, which is heavily reliant on this segment for growth. The GPUs the company produces for gaming are also used for cryptocurrency mining, a market currently facing many challenges.
This has significantly affected the company’s financials, with its gaming segment revenue falling by 46% to approximately $1.8 billion during the fourth quarter of the fiscal year 2023.
That said, the interest in AI among tech enthusiasts and investors has given NVDA stock strong momentum in 2023. Confident analysts believe that there may be further room for growth.
Nvidia appears to be leading the pack in the AI hardware space in 2023. The company is making significant strides in the software market, which could further boost its revenue. As we move into the second quarter of the year, Nvidia will likely continue impressing analysts and investors. Therefore, it’s wise to consider buying NVDA stock now, as it’s expected to maintain its strong momentum.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.