Prediction: These 5 phenomenal stocks are set to rise

We all want to invest in stocks that will go up, right? Of course. Still, it’s hard to know which stocks will be tomorrow’s big winners. Given this challenge, it makes perfect sense to only invest in a low-fee, broad-market index fund, such as one that tracks S&P 500 index of 500 of America’s largest companies.

Still, if you’re looking to put some of your long-term dollars into some super promising individual stocks, here are five growth stocks to consider — two of which are among the “Magnificent Seven.”

1. Amazon

It’s not hard to imagine how Amazon (AMZN -0.20%) could grow in the years and decades to come, in part because it’s involved in so many different businesses from A to Z — like Amazon Web Services and Zappos, the shoe retailer. Amazon Web Services (AWS), a leading cloud computing platform, is often underappreciated. As of last year, it held a major market share and was growing customers by 31% year-on-year.

As big as Amazon is, it’s still growing at a good rate, with revenue recently up 10% year over year in the last quarter and operating cash flow up 75%. Amazon has also invested heavily in artificial intelligence (AI), which is likely to provide major tailwinds for further growth. Given its recent price-to-earnings (P/E) ratio of 32 well below its five-year average of 54, the stock appears to be attractively valued.

2. Microsoft

Microsoft (MSFT -0.85%) it probably has an even more impressive array of businesses under its roof, including the mainstream Office productivity software, the Azure cloud computing platform, the Xbox gaming platform, and the Windows operating system, among others. The company is also poised to ride the wave of AI growth, having invested billions in ChatGPT creator OpenAI and incorporating AI into many of its offerings.

Given its recent price-to-earnings (P/E) ratio of 33, not far from its five-year average of 30, Microsoft stock looks reasonably valued.

3. PayPal

PayPal (PYPL -0.04%) is a major player in the fintech arena — another realm, along with AI and cloud computing, with high growth expectations. It recently boasted 426 million active customer and merchant accounts and 25 billion annual transactions. In the second quarter, revenue increased 8% year-over-year, payment volume increased 11%.

The company has slowed in recent years, but its outlook has been brighter lately with a new management team, a strong balance sheet and leaner operations. It also rolled out new features like its FastLane rewards program and Cash Pass. With its recent price-to-earnings (P/E) ratio of 16, well below its five-year average of 21, the stock looks undervalued.

4. Veeva Systems

Veeva Systems (VEEV -0.05%) it’s not a household name like the companies mentioned, but it has grown to a recent market value of $35 billion, providing essential cloud-based services primarily to the life sciences industry. For example, it helps pharmaceutical companies manage clinical trials — and its clients include lots of big names like Modern and Eli Lily.

Veeva’s second quarter saw revenue up 15% year-over-year and subscription services revenue up 19%. This last piece of information is very promising, as subscriptions provide relatively reliable recurring income. If a customer has a subscription, you don’t have to upsell them — you just have to thank them.

Given its recent price-to-earnings (P/E) ratio of 34 well below its five-year average of 50, the stock appears to be attractively valued. Better yet, it has billions in cash and no debt, giving it plenty of flexibility to pounce on opportunities.

5. iShares Semiconductor ETF

The iShares Semiconductor ETF (SOXX 1.35%) technically not a stock. It’s an exchange-traded fund (ETF) — very similar to a mutual fund, but trading like a stock. I have high hopes for this one because it gives you partial ownership of 30 semiconductor specialist stocks, and our modern world is now heavily dependent on semiconductors — for everything from cloud computing, AI, data centers, smartphones, and many others.

The main stocks of the ETF were recently included Nvidia, Broadcom, Advanced microdevices, Applied materialsand Qualcomm.

Five stocks to watch

These are five investments that appear to have tremendous growth potential over the coming years and decades. They may or may not go up this year, but I suspect that anyone who buys them now will be happy they did five or 10 years from now.

After you’ve learned more about anything you’re interested in, if you’re not sure, you shouldn’t invest in them. There are other great stocks — and great index funds that can also help you build wealth — with less risk.