Growth Stocks to Watch: Roblox and Toast Hit New Highs
Stocks reaching new highs, particularly amid rising demand for their products, indicate potential long-term success. The following growth stocks experienced a pullback during this year’s market sell-off. However, strong first-quarter earnings results pushed them to new heights.
Investors may find that adding these two stocks to their portfolios is advantageous.
The Appeal of Roblox
Roblox (NYSE: RBLX) continues to attract attention from investors due to its substantial growth potential. This free online platform engages 98 million users through an array of user-generated games and experiences. Recently, the stock doubled in value over the past year and achieved a new 52-week high following robust quarterly results.
Accessible on all major gaming platforms, Roblox is especially popular with children, though its fastest-growing demographic includes users aged 13 and older. This increasing interest from older teens and adults is vital for Roblox’s future expansion.
While many experiences on the platform are free, users can purchase Robux, a virtual currency, to unlock additional content. Analysts now recognize Roblox as having a sustainable growth trajectory. Over the past three years, its revenue nearly doubled, achieving a year-over-year growth of 29% in the first quarter.
Roblox’s developer community is projected to earn over $1 billion in compensation this year through developer exchange fees. This incentive is a key factor in attracting more content creators. Similar to Netflix‘s strategy in the past decade, Roblox stands to benefit from increasing content on its platform, appealing to a broader audience.
Roblox aims to capture 10% of the annual spending on video game content, referencing Newzoo’s estimate of a $180 billion video game industry by 2024. Currently, Roblox’s trailing-12-month revenue sits at $3.8 billion, with an annual growth rate exceeding 20%. This trend positions the company well to potentially achieve its long-term goal of $18 billion in annual revenue within the next decade, a target that bodes well for investors.
Image source: Getty Images.
Toast: Revolutionizing Restaurant Management
As restaurants increasingly embrace cloud-based solutions, Toast (NYSE: TOST) has seen its stock surge amid strong demand. Recently, it reached another new high following impressive quarterly growth.
In the first quarter, Toast added 6,000 net new locations, contributing to a 31% year-over-year revenue increase to $1.7 billion. With profits rising alongside its expanding business, investor confidence remains high, resulting in an uptick in share price.
Toast shows significant growth potential as it adapts services for various restaurant types. Whether dealing with large chains like Applebee’s or partnering with Topgolf, Toast’s industry presence is expanding.
Its intuitive platform simplifies restaurant management by incorporating tools like kitchen displays and handheld devices for staff. Moreover, Toast offers real-time analytics, helping restaurants improve operations and reduce costs. The company currently captures only 10% of its potential market across the 1.4 million restaurant locations, presenting further growth opportunities that could yield substantial returns for investors.
Investment Considerations for Roblox
Before contemplating an investment in Roblox, potential investors should take note:
Although the Motley Fool Stock Advisor recently identified its list of the 10 best stocks to buy now, Roblox was not included. The selected stocks may yield significant returns in the coming years.
For perspective, consider when Netflix featured on this list in December 2004. A $1,000 investment at that time would now be valued at $642,582!* Similarly, Nvidia made the list in April 2005; a $1,000 investment then would be worth $829,879!*
The Stock Advisor reported an average total return of 975% compared to 172 % for the S&P 500. Joining the service will provide access to the latest top 10 list.
*Stock Advisor returns as of May 12, 2025
John Ballard has positions in Toast. The Motley Fool has positions in and recommends Netflix, Roblox, and Toast. The Motley Fool also recommends Topgolf Callaway Brands.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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