Three Growth Stocks Offering Potential for Long-Term Gains

Over the past year, many growth stocks have fallen from their all-time highs due to concerns over unpredictable tariffs and rising interest rates. As a result, investors have turned toward conservative blue-chip stocks and other safe-haven investments. However, looking past these short-term headwinds could reveal a prime opportunity to invest in resilient growth stocks poised to generate significant returns over the coming decades. Among them are: The Trade Desk (NASDAQ: TTD), Super Micro Computer (NASDAQ: SMCI), and Palo Alto Networks (NASDAQ: PANW).

Where to invest $1,000 right now? Our analyst team has identified the 10 best stocks to consider. Learn More »

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1. The Trade Desk

The Trade Desk is the leading independent demand-side platform (DSP) for digital advertising. It assists advertisers in purchasing ad space on various platforms and collaborates with sell-side platforms (SSPs) that facilitate publishers’ ad inventory sales. Major companies like Alphabet‘s Google and Meta run their own DSPs and SSPs, but often confine advertisers within their ecosystems.

Advertisers seeking to reach a wider audience may find The Trade Desk’s DSP particularly appealing for ad purchases on desktop, mobile, and connected TV (CTV) platforms. The company’s growth has been significantly fueled by its CTV ads on ad-supported streaming video services. Additionally, its AI-powered Solimar platform helps advertisers create effective campaigns using first-party data, while tools like Unified ID 2.0 offer modern alternatives to outdated third-party cookies.

Looking ahead, from 2024 to 2027, analysts predict that The Trade Desk’s revenue will grow at a compound annual growth rate (CAGR) of 19%, with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increasing at a CAGR of 20%. With an enterprise value of $29.9 billion, its current valuation of 10 times this year’s sales suggests ample room for growth as the CTV market accelerates and advertisers explore options beyond Google and Meta.

2. Super Micro Computer

Super Micro Computer—often referred to as Supermicro—manufactures servers tailored for enterprises and data centers. While it commands a smaller market share compared to giants like Dell and Hewlett Packard Enterprise, it has found a lucrative niche in dedicated AI servers. This early entry was bolstered by a partnership with Nvidia to develop advanced liquid-cooled systems.

Supermicro experienced explosive revenue growth with a CAGR of 61% from fiscal 2021 to fiscal 2024, driven by its successful AI server shipments. However, the stock faced various challenges over the past year, including delays in filing its 10-K report for 2024, loss of its long-term auditor, threats of delisting, and subpoenas from both the Department of Justice (DOJ) and Securities and Exchange Commission (SEC).

Excitingly, Supermicro has since partnered with a new auditor, filed the overdue 10-K in late February, and avoided delisting. If the company can navigate past its recent setbacks, analysts anticipate revenue and earnings per share (EPS) growth at CAGR rates of 36% and 18%, respectively, from fiscal 2024 to fiscal 2027. With the stock currently trading at a reasonable 11 times next year’s earnings, there is potential for a rebound as the AI server market continues to expand.

3. Palo Alto Networks

Palo Alto Networks ranks as one of the leading firms in the cybersecurity sector. The company operates three primary services: Strata for on-premise network security, Prisma for cloud-based security, and Cortex for AI-driven threat detection. Recent growth trends have been largely attributed to the success of its NGS offerings encompassing Prisma and Cortex.

The firm’s extensive scale, customer loyalty, and diversified offerings create a substantial competitive edge against smaller rivals. Its business model is also buffered against economic downturns, as companies are unlikely to compromise on digital security to cut costs.

From fiscal 2024 to fiscal 2027 (ending July 2027), analysts hold a bullish outlook, estimating a 15% CAGR in revenue. Although EPS may experience a temporary decline of 52% in fiscal 2025 due to a one-time tax benefit from fiscal 2024, projections point towards a robust recovery with 15% CAGR growth in the subsequent years. While the stock might appear expensive at 91 times next year’s GAAP EPS and 56 times its non-GAAP EPS, its premium valuation reflects the company’s strong position in the ever-evolving cybersecurity landscape, potentially yielding significant returns for patient investors.

Seize the Opportunity for Future Gains

If you ever felt like you missed an opportunity to invest in high-performing stocks, now might be the moment you’ve been waiting for.

Occasionally, our expert analysts issue a “Double Down” Stock recommendation for companies they believe are on the verge of substantial growth. If you feel you’ve already missed your investment opportunity, this could be the right time to act before the window closes. The performance history supports this approach:

• Nvidia: Investing $1,000 when we first recommended it in 2009 would now be worth $277,401!*
• Apple: A $1,000 investment from our 2008 recommendation would have grown to $43,128!*
• Netflix: If you had invested $1,000 when we recommended it in 2004, it could be worth $467,393!*

Currently, we are issuing “Double Down” alerts for three outstanding companies, and opportunities like this may not come around again soon.

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*Stock Advisor returns as of March 10, 2025

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, serves on The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is also a member of The Motley Fool’s board. Leo Sun holds positions in Meta Platforms. The Motley Fool has positions in and recommends Alphabet, Meta Platforms, Nvidia, and The Trade Desk. The Motley Fool recommends Palo Alto Networks. The Motley Fool adheres to a strict disclosure policy.

The views expressed herein represent those of the author and do not necessarily reflect the views of Nasdaq, Inc.