3 Growth Stocks With More Potential Than Any Cryptocurrency Cryptocurrency

Many growth-oriented investors have flocked to cryptocurrencies over the past few years as the prices of Bitcoin, Ethereum, and other digital tokens exploded. But last year, the crypto market crashed as rising interest rates and other macro headwinds nudged investors toward more conservative investments.

As this crypto winter drags on, it might make sense to switch back to traditional growth stocks. So today I’ll be looking at three high-growth stocks that could still outperform the world’s top cryptocurrencies: cloud darling Snowflake (SNOW -1.07%)electric vehicle manufacturer Lucid (LCID -6.48%)and Latin American e-commerce giant MercadoLibre (MELI -2.04%).

1. Snowflake

Large companies often store their data on a wide range of computer platforms and software. Over time, these fragmented silos can make it difficult to make effective data-driven decisions. Snowflake eliminates these frictions by breaking down silos, collecting all data, and storing it in a cloud-based data warehousing platform easily accessible by third-party applications and data visualization services.

Snowflake customers only pay for the compute power and storage they need instead of paying recurring subscription fees. Nor do its customers need to tie themselves to a data warehousing service integrated with a dominant cloud service like Amazon Web Services (AWS) and Microsoft Azure.

Snowflake’s disruptive approach and flexibility have made it one of the fastest growing cloud stocks in the market. Its product revenue grew 120% in fiscal 2021 (which ended in January 2021) and 106% in fiscal 2022, and it expects growth of 68% to 69% in in fiscal 2023. Snowflake expects product revenue to reach $10 billion by fiscal 2029, implying that revenue will grow at a compound annual growth rate (CAGR) of 36%. compared to fiscal 2022. By the end of fiscal 2029, the company expects approximately 1,400 of its customers to contribute more than $1 million in annual product revenue, per compared to just 287 in its last quarter.

Snowflake isn’t profitable yet, but economies of scale could quickly kick in if it hits its hypergrowth goals. The stock isn’t cheap at 18x ​​next year’s sales, but it could generate better returns than any cryptocurrency.

2. Lucid

Lucid, the luxury electric vehicle maker that went public by merging with a special purpose acquisition company (SPAC) in 2021, is another hypergrowth speculative stock that could outperform any digital token. vehicles in 2022, it only produced 7,180 vehicles for the year as it struggled with supply chain constraints. Safety-related recalls and cancellations of existing reservations caused additional headaches.

It’s tempting to dismiss Lucid as just another failing electric vehicle maker backed by SPAC, but it has one major advantage over its peers: backing from the Saudi government. Saudi Arabia’s Public Investment Fund (PIF) owns nearly two-thirds of Lucid’s shares, and the Saudi government is subsidizing the construction of Lucid’s first overseas factories in the country, which could allow it to produce around 500,000 vehicles per year by 2025.

This would represent a breathtaking CAGR of 311% from 2022. The Saudi government also plans to buy up to 100,000 vehicles from Lucid over the next 10 years, and recent rumors suggest that the PIF could even take control of Lucid by buying the rest of the shares he doesn’t already own.

Lucid is still not profitable, but it’s not terribly expensive at 8 times next year’s sales. If the Saudi government remains committed to helping Lucid meet its lofty 2025 production targets, we could see its stock generate massive multibagger gains over the next two to three years.

3. MercadoLibre

Finally, MercadoLibre, Latin America’s leading e-commerce company, may still have a lot more leeway over the next few years. Its annual revenue grew at a CAGR of 53% from 2016 to 2021, and analysts expect its revenue to continue growing at a CAGR of 32% from 2021 to 2024 as it continues to expand its e-commerce and fintech ecosystems. It served 127 million unique active users in the first nine months of 2022, but that’s only less than a fifth of the total population of Latin America and the Caribbean islands.

According to Americas Market Intelligence, the e-commerce sectors of MercadoLibre’s three largest markets – Brazil, Argentina and Mexico – could grow at CAGRs of 22%, 32% and 24%, respectively, from 2021 to 2025. If MercadoLibre simply maintains its leading position in these markets, it could generate multibagger gains in the near future.

MercadoLibre still faces fierce competition from regional challengers, unpredictable currency headwinds caused by inflation, and other macroeconomic challenges. But it’s also solidly profitable and has a massive head start over domestic and overseas rivals, and its stock still looks reasonably priced at less than 5x next year’s sales. Once the market again recognizes MercadoLibre’s long-term growth potential, I expect it to easily outperform any of the major cryptocurrencies.