Top Growth Stocks to Watch as 2023 Nears its End

The year is drawing to a close, and what a year it has been for the stock market. As of this writing, the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average are up 26%, 28%, and 19%, respectively.

That said, there are many growth stocks that have far outpaced the benchmark indexes and could be worth considering for the long term. Here are three stocks that investors should know about.

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1. Spotify Technology

First up is streaming giant Spotify (NYSE: SPOT).

Spotify operates the world’s most popular music-streaming app. In its latest quarter (three months ending Sept. 30), Spotify reported 640 million monthly active users (MAUs), which is an 11% increase from 574 million MAUs a year ago.

The company also saw its paid subscribers grow by 12% to 252 million. Paid subscribers are particularly crucial since their fees make up 88% of Spotify’s total revenue.

While Spotify has been converting more MAUs into paid subscribers, the company has also reduced costs, boosting its profitability. It reported an operating income of 454 million euros compared to only 32 million euros last year.

In summary, Spotify is delivering significant growth. The expansion of its user base, revenue, and profits highlights its continued success, making it a strong long-term buy for investors.

2. Reddit

Next is Reddit (NYSE: RDDT).

Reddit went public less than a year ago, and its stock has risen an impressive 180% since then.

This growth can be attributed to three key financial metrics:

• Strong revenue growth
• Growing user base
• High gross margins

In the most recent quarter (ending Sept. 30), Reddit’s revenue reached $348 million, marking a 68% increase year over year. Its daily active users (DAUs) also rose 47% to 97 million.

Additionally, Reddit improved its profitability, achieving a gross profit margin of 90%, the highest in its history and over 200 basis points above last year’s figure.

As a new entrant in the stock market, Reddit’s first year has been remarkable. With solid growth and potential for more profitability, investors might see it as a worthwhile long-term investment.

3. Nvidia

Finally, there’s Nvidia (NASDAQ: NVDA).

Nvidia has had a great year, currently holding the title of the world’s second-largest company with a market cap of $3.3 trillion.

Recent earnings results suggest there is still potential for growth. For the three months ending Oct. 27, Nvidia’s revenue surged 94% year over year to an astounding $35 billion.

To put that into perspective, this quarterly revenue approaches the annual revenue of major companies like Visa, Netflix, and Starbucks.

Remarkably, Nvidia’s revenue was less than $6 billion just two years ago. The exponential demand for artificial intelligence (AI) chips has powered this growth.