2 Growth Stocks to Buy Before It’s Too Late

Stocks can be difficult to understand for some investors because their prices tend to bounce back in the short term, but successful growth investments tend to be fairly straightforward when looking at the long-term big picture. Companies that consistently grow their annual revenues at high double-digit percentage rates will ultimately bring high returns to shareholders. You just need to get on board and maintain a long-term perspective.

Here are two relatively small and fast-growing companies with some near-term price volatility that also have excellent prospects for doing well over the long term.

1. Palantir Technologies

Palantir Technologies (NYSE: PLTR) is one of the most talked about artificial intelligence (AI) companies. It develops software applications based on artificial intelligence that can be used for a wide range of use cases. Palantir helps companies identify problem areas in their supply chains and improve efficiency, and contracts with corporate clients have grown at this time. But the company is perhaps best known for its work with the US government, where Palantir’s software can help military and intelligence agencies make more informed decisions in field operations and resource management.

Macroeconomic headwinds are leading to mixed results across multiple industries right now, but demand for Palantir’s AI platform is gaining momentum. Its revenue rose 27% year over year in the second quarter, driven by increased demand from US companies. Government still drives most of Palantir’s revenue, but its U.S. commercial segment sales are growing faster, up 55 percent from the year-ago quarter.

Palantir is well-positioned to drive more growth as more enterprises look to integrate AI into their operations while keeping data secure. That’s why Palantir’s work with the government is crucial to its growth strategy. Its relationship with the military illustrates that protecting customer data is a top priority.

Palantir’s “boot camps,” which allow companies to test their products before committing to a contract, have proven instrumental in its growth. The bootcamps have resulted in shorter transaction cycles and enable major customers to onboard within days of trying the product, giving Palantir a competitive advantage.

In the past four years, the number of commercial customers in the US has grown from 14 to 295. Palantir shares have risen 124% in the past year, and the artificial intelligence market is expected to grow exponentially in the coming years, the stock could offer monstrous gains .

2. Monday.com

monday.com (NASDAQ: MNDY) provides a cloud-based software platform that helps companies streamline their workflows across teams and projects. Revenue grew 280% to $844 million over the past three years.

The story continues

The labor management software market is competitive, but Monday.com is still seeing strong demand for its services, even after the price hike. Revenue rose 34% year over year in the second quarter, and management is forecasting further gains going forward as only 40% of its customers have migrated to the new price.

The future of Monday.com looks bright as it continues to see strong customer adoption after adding more services to the platform. In addition to labor management, it has expanded its software offerings into product development, customer relationship management and services. On the second-quarter earnings call, management noted that its largest customer has grown its seat count 10-fold in recent years, indicating the value companies are getting from the Work OS Monday.com platform.

The new AI implementation on the platform should make it even more appealing to customers. Monday.com announced new generative AI features in Q2 that help automate certain actions. That could capture more interest from organizations looking to improve worker productivity — a big opportunity for Monday.com, given that about two-thirds of organizations regularly use generative AI, according to McKinsey.

The stock is up 60% in the past 12 months. Monday.com is seeing robust revenue growth in a market that was worth $101 billion last year, according to IDC. The stock could be at the start of a great run over the next few years.

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John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Monday.com and Palantir Technologies. The Motley Fool has a disclosure policy.

2 Growth Stocks to Buy Before It’s Too Late was originally published by The Motley Fool