Bull runs can lead to outsized gains for patient investors. Some stocks perform better than others, leaving the rest of the market in dust. Growth-oriented investors usually aren’t shy about taking more risk in exchange for a higher potential upside. However, that doesn’t mean investors should become reckless. Investors should focus on corporations that offer a good mix of competitive moat, financial growth and rising profit margins. These three growth stocks for the next Nasdaq bull run that check each box and can deliver solid returns for long-term investors.
Duolingo (DUOL)
Duolingo (NASDAQ:DUOL) is a profitable educational tech company that is only starting to expand its profit margins. Net profit margins for Q4 2023 came in at 8% due to resounding financial and user growth. The company reported $151.0 million in total revenue for the quarter. That’s a 45% year-over-year increase.
Net income was up even more. The company reported a net loss of $13.9 million in Q4 2022. Meanwhile, it turned a $12.1 million profit in Q4 2023. The big turnaround reflects Duolingo’s ability to accelerate profit margin expansion.
Its users should continue to show strong interest in the trend. Daily active users came to 26.9 million, up by 65% year-over-year. The company also reported a 46% year-over-year increase in monthly active users to reach 88.4 million MAUs.
Shares are up by 90% over the past year. The app gamifies learning new languages and has expanded into additional subjects like math and music. As more people learn online, Duolingo should continue to benefit.
Crowdstrike (CRWD)
Crowdstrike (NASDAQ:CRWD) is a top-tier cybersecurity firm that looks poised to take market share from its competitors in the upcoming quarters. The cybersecurity giant reported 33% year-over-year revenue growth and surging profits in Q4 FY24.
Most of the company’s revenue is recurring, and the tally stood at $3.44 billion in annual recurring revenue to wrap up fiscal 2024. Crowdstrike also reported $53.7 million in GAAP net income compared to a $47.5 million net loss in the same period last year. The stock is up by 373% over the past five years and is already off to a strong start with a 23% year-to-date gain.
Wall Street analysts believe the cybersecurity stock has more room to climb. The average price target suggests a 31% upside. The highest price target of $435 per share indicates shares can rally by an additional 43% from current levels. Wall Street is bullish on this stock and has given it a “Strong Buy” rating.
Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) has been a top beneficiary of the AI boom. The company’s GPU chips lead the industry and are up by 78% year-to-date. However, the stock has been quiet since the start of March and has traded flat since then.
The company’s May 22 earnings will change that. Nvidia stock will either soar or enter a correction. An in-between scenario seems unlikely, but Wall Street analysts are optimistic about an upswing. The average price target suggests a 17% upside. It’s rated as a “Strong Buy” among 41 analysts.
Nvidia reported a blowout earnings report in Q4 FY24. Revenue increased by 265% year-over-year while net income surged by 769% year-over-year. Quarter-over-quarter growth has been decelerating. Q4 FY24 revenue only marked a 22% sequential improvement. The stock trades at 34 forward P/E and 1.11 PEG ratios. The stock looks like it has a good valuation, assuming the firm maintains high financial growth for another year.
On this date of publication, Marc Guberti held a long position in NVDA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.