Multibagger alert: 3 growth stocks to boost your portfolio

Growth stocks have the potential to outperform the stock market. These companies often have strong revenue and earnings growth over several years.

While growth stocks tend to be more volatile than the average investment, investors with a long-term investment horizon can ride out the sharp price swings. Buying and holding promising growth stocks with a 5- to 10-year investment horizon can lead to significant long-term returns. These top growth stocks can take your portfolio to new highs.

Visa (V)

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Visa (NYSE:V) is a leading fintech company specializing in credit and debit cards. The company generates revenue on every transaction and has generated solid returns for its investors. Shares are up 5% year-to-date and have gained 60% over the past five years.

The company trades at a P/E ratio of 33.5 and offers a yield of 0.76%. High net profit margins are a constant for this company, reaching 53% in the second quarter of fiscal 2024. Revenue and net profit both grew 10% year-over-year.

Visa has initiated many share buybacks to reward long-term investors. Share buybacks and dividends totaled $3.8 billion in the quarter. Growth in payment volume, particularly cross-border volume, drove recent gains.

Wall Street is enthusiastic about the stock and has rated it a “Strong Buy.” The average price target suggests that the stock can gain another 16% from current levels.

Microsoft (MSFT)

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Microsoft (NASDAQ:MSFT) is a diversified portfolio. This stock gives investors exposure to gaming, social media, artificial intelligence, enterprise software, cloud computing, and other industries.

Many of the company’s segments are showing year-over-year revenue growth, but Microsoft Cloud is the main growth driver. This segment’s revenue increased 23% year-over-year in the third quarter of fiscal 2024. Microsoft Cloud generated $35.1 billion of the company’s total revenue of $61.9 billion. Total revenue increased 17% year-over-year, while net income increased 20% year-over-year to $21.9 billion.

Sustained demand for artificial intelligence solutions is expected to drive increased revenue growth for several quarters. Microsoft is one of the leading stocks, up 12% year-to-date and more than tripling over the past five years.

Microsoft trades at a P/E ratio of 36 and offers a yield of 0.72%. The technology giant has maintained an annual dividend growth rate of 10.60% over the past decade.

Amazon (AMZN)

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Like Microsoft, Amazon (NASDAQ:Amazon) is well diversified. Amazon Web Services is the leading cloud computing platform and helped the company generate revenue of $143.3 billion in the first quarter of 2024, a 13% improvement year-over-year. Amazon Web Services was a highlight, delivering 17% year-over-year revenue growth.

Amazon’s online marketplace remains the company’s key revenue driver, with the segment seeing double-digit growth rates in the domestic and international markets. Amazon also has exposure to gaming, advertising, streaming, food, artificial intelligence, and other verticals.

The share was an essential part of the S&P500 for several years. Investors have been quite pleased so far, with an 18% gain year-to-date and a 96% gain over the past five years. Amazon currently trades at a P/E ratio of 49.5 and is expanding its profit margins.

Wall Street is bullish on the stock and has rated it a Strong Buy. All 43 analysts have rated the stock a Buy and are forecasting 25% upside from current levels.

As of the date of publication, Marc Guberti held long positions in MSFT and AMZN. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s publishing policies.