3 growth stocks I would buy right now

Stocks are one of the best wealth building tools available, and with the new year approaching, there is no better time to invest some money for work.

Whether you are new to stocks or a veteran looking for new investment ideas, here are three tech stocks that I would feel comfortable buying today.

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Microsoft

Microsoft (NASDAQ: MSFT) they have delivered a steady yield of 280% over the past five years, but the company’s growth opportunities in cloud services should be a way to further reap the benefits.

Microsoft continues to experience double-digit revenue growth with impressive results from its smart cloud division, which has become the biggest business for the software giant. The main driver here is Microsoft Azure, where revenue jumped 48% year-over-year in the most recent quarter.

Azure continues to win new business from large corporations that rely heavily on cloud computing to securely manage Internet of Things devices, build cloud-based applications, and process data using artificial intelligence. , among other services.

Elsewhere, Microsoft consumer products continue to perform well. The number of monthly active devices using Windows 10 grew by double numbers year over year in the first fiscal quarter. In gaming, Xbox content and services revenue jumped 30% year-over-year ahead of the Xbox Series X / S game console release in November. The gaming sector accounted for just 8% of total revenue in fiscal 2020, but the Xbox business could begin to grow significantly over the next decade based on the plans for the Xbox membership service Game Pass, which already has 15 million members.

Microsoft is a very profitable business and has an enviable position as a software provider as a service. At a priceless cash flow (P / FCF) ratio of 33, the stock is not too expensive compared to Microsoft’s underlying growth and should deliver decent results for several years.

Small and round shipping boxes sitting on a computer keyboard

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Amazon

Amazon (NASDAQ: AMZN) it has the upper hand in e-commerce, but even though it is a household name at this stage, it still has plenty of growth potential. Despite years of growth, e-commerce still represents less than 15% of total sales costs.

This holiday should be the first quarter that Amazon has surpassed $ 100 billion in revenue in three months. Amazon reported $ 96 billion in revenue in the third quarter, up 37% year-over-year.

More and more people are shopping online, which plays to the strengths of Amazon’s huge selection, fast shipping, and excellent customer service. The consensus analyst estimates that Amazon is hitting $ 119 billion in revenue for the fourth quarter, representing a year-on-year increase of 36%.

Amazon has seen increased communication with Prime members recently, as people take advantage of online grocery delivery from the Whole Foods Market. The executives also said in the last earnings report that international communications with Prime Video grew 80% year-over-year in the third quarter, a testament to the reckless pull of Prime’s membership.

If we like Microsoft for its growth prospects in cloud services, we should love Amazon more, as Amazon Web Services controls No. 1 place in the cloud infrastructure services market and making up the majority of Amazon’s operating profit.

Amazon is more expensive than Microsoft, trading at a P / FCF ratio of 64, but Amazon is growing much faster and still has a long runway. Amazon is one of my biggest holders, and I would be comfortable adding more shares to it at today’s price levels.

Unity Software

Unity Software (NYSE: U) is the backbone of many of the best video games made for mobile, token, and PC. It is the leading platform for creating and working with interactive real-time 3D content, and is growing rapidly, with revenue rising above 53% year-over-year in the third season.

The stock has just completed its first public offering in September and has risen 127%. It’s a high fly that can be volatile in the short term, which is sometimes the same for the course with growth stock, but there are good reasons why investors are so bullish.

Group considering an office project.

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Investing in Unity stock is partly a testament to the continued growth of the $ 175 billion video game industry, but it is also a play on the common use of software to design and create products across the economy. In addition to supporting game creators, the Unity platform is also used by filmmakers, business designers, artists, architects, and other professionals.

The company estimates that the shipping market for its platform is currently around $ 29 billion. But the interesting thing about Unity is that governance sees potential for more use cases beyond what the platform currently serves. Some of these new use cases include autonomous driving simulations and augmented reality claims.

The main benefit that Unity offers clients is similar to what is driving growth for Microsoft’s cloud business – a cost-effective and time-saving solution compared to other options. For example, with Unity, game creators only need to create a game once before launching it across multiple platforms, such as PC, Nintendo Switch, Xbox, PlayStation, mobile, and virtual reality.

Unity also offers solutions to help game creators monetize their content with in-game purchases and advertising, which is how more video game companies are plopping up their revenue than these days.

While the growth potential is huge, investors may only want to start a small position in the stock right now. Unity is highly valued with a market value of $ 42 billion. That’s a steep valuation of 48 times 12-month income of $ 674 million. However, the growth of the company should confirm that valuation over time, but remember that the shares may soon be lumpy.

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