Get READY: These 3 Stocks Could be the Next NVIDIA Growth Story

Many investors are talking about the slowdown in some of those triedand-rue huge names out there like Nvidia that seen growth slow, but there's plenty of other areas of the market to turn for that kind of growth. Joining us today is market feed analyst Chris Marotch with a list of three stocks that could be the next Nvidia style growth story. So Chris, I'm excited to get into this list today, but I want to start out with whether that Nvidia explosive growth story is gone. And I we've compared many stocks to Nvidia. Many YouTube channels do this in the finance sector because the growth story was so huge. And it's not to say that the growth at Nvidia is over. But would you agree with the sentiment that the huge returns that so many investors are used to seeing could be over? >> I think so. I I would put Nvidia in a similar bucket to where I would put Palunteer. If an investor is going into Palunteer right now at its current level and expecting to see a gain of over 10x like it saw between 2023 and 2026, that's probably not going to happen. The law of large numbers is working against you. And I think the same is true of Nvidia. It's not that you're not going to see growth. I'm not saying that at all. But I think if you're expecting to see that same kind of explosive growth, probably not so much. Nvidia is becoming a more mature company. There's nothing wrong with that. I'm not s sitting here saying Nvidia's best days are behind it, but you're probably not going to see that same kind of explosive stock price movement that you've seen over the past several years, >> right? And Nvidia, even in the last 5 years, the stock is up over a,000%. But we've seen in the last, you know, three months, we've seen some stocks do that kind of growth story in three months or so. the market is moving at a crazy fast pace right now, especially for some of these smaller companies that become key players in that AI story. Uh, and so there are areas to find that kind of explosive growth. And you have three names for us today that really fit that narrative. All three of these names are kind of at different stages of growth story. The first couple have already seen some growth, but there's still a case to be made for a long runway ahead. The last name that you're going to share with us today is really at that early age cusp of potential explosive growth. It makes it riskier, but it's really on that early stages. So, a great list with a a wide variety of where these stocks are in their growth story. I want to get your take again before we dive into the first stock just on what investors need to know uh when they are looking at these kind of potential explosive growth story stocks. Can some of these names go up and crash down just as quickly? Does Nvidia stand out because it went up and held that growth? Is that a unique story? >> I think what investors want to look for is the story behind the stock or in this case, what's the business model? What's the business case behind the stock? because that really is going to tell the story of whether or not the revenue gains and more importantly the earnings gains are going to be sticky over time or is this something where maybe the stock was going up on on vibes only and at that point you know it's due for a pullback and that pullback might be sustained. Having said that volatility is is the ticket in this market. It's it's the it's what you are going to have to go through if you want to be in these stocks. We've seen a stock like Palunteer. It's down 31% this year. A lot of people are saying, "Oh gosh, that means the, you know, that is that the end of the story for Palunteer?" I don't believe so. I believe it's taking a natural pullback, but again, we're dealing with larger numbers now. So, the drop is going to be sharper and you're going to see though and you're going to see these moves in these stocks. They're volatile. It's just the price you're going to pay for being in those stocks and for trying to capture some of the gains. >> Are the three names that you're sharing with us today more of those long-term growth stories where you might expect some volatility in the short term? But for you, are these all three long-term growth stories? >> I think they're long-term if you're looking in the standpoint of maybe the next 5 to 10 years. Um, there's two stocks that we're talking about that are squarely in the middle of the AI infrastructure story and that has still many years to play out. I don't know if they're forever stocks, but I think the current growth story still has many years to run. >> All right. Well, that is what we are looking at today. And if you like this concept of looking at other names, some of these smaller names that have the potential to see the kind of tremendous growth story that Nvidia has seen over the last 5 to 10 years. Make sure to check out this special report from our market beat analyst Thomas Hughes. He wrote a report specifically on the next seven stocks that could be bigger than Nvidia, Google, or Tesla's growth stories. A lot of investors are always looking for that next big thing. Well, this report has seven names that could be that. You can scan the QR code or click the link right down in the description of this video to get that free report right now on marketbeat.com. All right, Chris, let's get into your list. What is the first name that you are looking at as a potential for that Nvidiaike growth story in the future? >> So, the first name I've come up with is Kredo Technology. That ticker symbol is CR DO. This is a fabulous semiconductor company. They're developing high-speed uh connectivity solutions in the cloud. High-speed connectivity is going to be one of the keys behind AI inference. That means that when you ask one of the LLMs a question and the answer gets back to you in 2 seconds. The speed at which they do that, that's inference. That's the wave of AI that we're currently under. It requires very specialized connectivity hardware. This company makes that hardware. >> Yeah, this is a name that's popped up on the show before. I think it made Thomas Hughes monthly watch list a few times. One of his top five stocks to buy. And if you look at the chart for this one, it's had some volatility. that volatility that you mentioned, it's it's seen tremendous growth, but it's also had some major pullbacks. And I believe that's the time that we were talking about it on the show before. So, what's been behind some of those ups and downs in the last few months for Credo? >> When you think about where the story is, it's been all about the data center play and was data center growth, was that sustainable? Was it something that was a real story? And what we've seen in this past earning season was you saw the hyperscalers confirm that they are going to continue to spend the money to build the data centers. Then you had companies like Credo say yes we are actually receiving money from these hyperscalers and the demand is real. So in the meantime, you're seeing that up and down volatility as investors are maybe get spooked out a little bit, decide to take some profits. And again, you're also dealing with significant gains in this stock over the past few years. And it's prudent that some investors may decide at different points, I'm just going to trim my position a little bit. >> Yeah, this one up over 250% for the year. So already a very solid growth story, but it's continuing to grow right now. We just saw this stock climb again at the end of this week. It was up uh around 10% on Thursday. It's been up nearly 25% in the last 5 days. So what's that significant catalyst that's really leading to this short-term climb that we've seen just in the last week? >> So it's the earnings report. The company reported earnings on June 1st. The significant thing there was the earnings report in Q4 confirmed what they did in Q3, which was tremendous year-over-year increase in revenue. It was also a tremendous year-over-year increase in earnings per share, better guidance. You're seeing analysts raise their price targets since the report. Having said that, the stock dropped probably over 10% in probably the few days heading into the report. So again, there's a lot of volatility here to this name, but this is a this is a stock that's up over 261% in the last 12 months. It's up 80% year to date, but the reason why we're putting this in this video is because the stock still has room to run higher. >> Yeah, let's talk about that a little bit more because again, the the thesis of this video is talking about that next Nvidiaike growth story. And I think investors can look at a name like this and see that it's already grown this much and wonder, can this possibly have the kind of explosive growth year after year like Nvidia did for a number of years? One thing you're going to want to look at with a company like Credo is are they expanding into different areas? How big is that total addressable market? And that's where the story really gets interesting for them. They're expanding into areas like telemetry software uh into optical DSPs and the question there becomes if they can expand their total addressable market that's a revenue booster that perhaps analysts are only now starting to price in and again that's where that story goes of saying this isn't just a one or two quarter revenue story this is something that still has legs to go for several more quarters. >> Yeah let's talk about that demand a little bit more. Why does this still have legs for a few more quarters? What exactly are they offering that has seen so much demand right now and raising that future guidance too? >> Well, again, I think even if they don't expand into new markets, there's going to be demand for this type of connectivity solutions. These data centers are going up rapidly. The company has a backlog. They're generating revenue. And keep in mind, the revenue that we're talking about right now here is still in the millions. So, there's still a chance that this stock could go up significantly. In the last quarter, the revenue was up 206% year-over-year. In some of those areas that I was talking about where you're talking about some new avenues of revenue, they're they're projecting that that area of revenue alone could top like 600 million in the next year. So, there's plenty of revenue growth that it looks like is now being factored into the stock and leaves investors with some room for this stock to go higher. >> I think that's a really great Nvidia comparison there with the Nvidia growth story is that when you see revenue growing at that much of an accelerated pace, that's when you see the stock price generally follow. So I think that that growth story has a really good case when you see so much revenue and like you said when they are starting to expand their markets and expand where that revenue can come from and the capacity for revenue in the future. So a really good first stock to look at. I did want to mention too we've talked about this name before the big recent runup. I think I I mentioned it made Thomas's buy list back in December and that's when it made it on my Bridget Spies watch list. I added this name to my uh paper trading watch list. If you've not seen that yet, you can go to marketbeat.com/bid. And I like to add about one stock per video that we talk about to track and follow how the stocks we talk about on this channel grow over time. And this is one that's doing incredibly well. It's up uh over 65% since when I added it back in December. And and like you said, I think there's still a a big growth story to be had here. And up 65% in in half a year is a pretty good uh return for a stock like this in the AI story. So, it's been a good name for our viewers. Let me know in the comments if you got into Credo when we talked about it on the channel a few months ago. Let's get on to that second stock that you were talking about, Chris. What is this name? >> The next name on my list is Celestica. Um, ticker symbol here is CLS. It's a company that's been around for a long time, but it's only really started becoming interesting um in the last uh few years actually. And again, that's that's largely due to AI and the demand for AI data data centers. So, one thing you're going to see with this chart right away, and it may scare some investors away is the fact that the stock's gone up by 4,375% in the last five years. So, before the data center story started, the stock was doing not much of anything. Again, it was kind of a it was kind of a boring story. They design, engineer, and manufacture physical hardware like servers and that go inside data centers. And that demand was sort of okay before the data center craze. Now these companies, these hyperscalers need the products that this company offers and they need them fast and that's why you've seen the fast growth of this company. It's also why you can believe that this story still has further to run. Can I say it's going to go 4,000% in the next 5 years? Probably not. But there's still plenty of upside for investors who want to get in right now. I'm glad you pointed that out because that was the thing that stood out to me too is that this this stock has already seen such tremendous growth uh even more than Nvidia's 5-year growth story for sure. And I think many investors when we talk about these names, they go, "Well, why didn't you tell us about it back in 2023 when it was doing much of nothing for 15 years?" Uh, and we weren't even a stock channel then. Uh, we >> Thank you. I was going to say the same thing, Bridget. WE WEREN'T EVEN DOING THIS IN 2023. >> We were not even there then. Uh, but this is a name I I can't specifically remember a time that we've talked about it, but I know I've heard about it maybe in a market beat Monday or something like that. This one has seen some of that volatility that we just talked about where it's had some pullbacks in different areas too. And I I'm curious about that, especially these first two names on the list. The last name goes a little bit out of the AI story, at least a little, but we're talking about uh tremendous growth, tremendous demand in the AI data center buildout. We know these companies are part of that infrastructure and they have a backlog like crazy. They have demand like crazy. So why do we see that volatility even with names that have solid stats to to back up the the growth story here? >> In the case of Celestica, one of the headwinds that the company's been facing is the fact that they've had some supply chain pressure. Uh so again, they've got demand, but the question is how soon can they get what they need to be able to deliver on that demand? And some analysts have been a little bit skeptical about how quickly they're going to be able to fulfill that demand. Is that going to affect their revenue and earnings in in in future quarters? However, I think you have to look at that and say that looks like a short-term blip that could give investors the opportunity to get in on a stock like this. Right now, the stock's trading around $373 a share. Analysts have a price target of 427. That's a consensus target. So that's already about 14% higher. And as I look at some of the more recent price targets, I'm seeing 460 480. I see a $510 price target from Susuana. So you're seeing some price targets that are significantly higher. That's one reason that investors can look at and say this could go higher. >> Yeah. But when you mention those numbers, I think it's important to point out that the stock was at that high uh just a week and a half ago. Uh the the first week of June, it was running around $470 a share and then we saw that tremendous pullback. Now, that's not a unique story to Celestica. Everybody in the market knows we saw that roughly 20% pullback on a lot of these names that had run up so high. But is that just a part of the hype? Did Celestia get grouped in with everything happening around the AI buildout and pull back in the same way or is there anything specific to what happened in their story in their earnings in the demand in those timelines that you were just talking about? I thought that was a really great point that they uh the success also depends on their ability to fulfill all the demand that they're seeing. >> Celelesia reported earnings back in I think the end of April. So, I don't think the pullback you're seeing in the last week or so has anything to do with something that came up in earnings. If you ask me, I'm just going to throw it out and say I think a lot of this has to do with SpaceX. It's one of those stocks where investors saw a reason to take profit. They saw an opportunity to take profit. They saw a stock that's up 191% in the last 12 years, 25% year to date, and that's with this pullback. And I think another thing to remember is we're talking about stocks that may be under the radar for retail investors. This has about 65 to 70% institutional ownership. Well, guess what? Institutions are trying to take some money off the table to raise cash so that they can get in on a SpaceX IPO. That's what I really believe is going on here. I could be wrong. But I look at that and say when I see where the analyst price targets are and some of those are very recent, I think this is just a profit taking opportunity and a way for some of these institutions to raise cash for the SpaceX IPO, but that gives retail investors a chance to maybe get in on this stock at a better price. >> Yeah, I think that's a great point that that that's could be a part of the story and it could be a part of the pullback in a lot of these uh big tech names. Some other things I want to talk about before we move on to the last name, which is in a completely different category. Again, these two these two are very big names already. The price of entry is a little bit higher. The last name we're going to talk about has a very low cost of entry, which is something we hear from people that they care about quite a bit. So, that last one will absolutely fit that category. But let's talk a little bit more about that institutional ownership. You mentioned this one's about 65%. I forgot to say with with Credo is over 80% institutional ownership. What does that tell you about these high growth stories that the institutions are very locked into these names? >> I think it's always a good reminder that um retail investors when they see a stock like Credo have 80% institutional ownership. When you see a stock like Celestica that has 67% ownership, you really want to pay less attention to what institutions say and more about what they're doing. And what they're doing in this case, they're clearly buying the stock. Now, in the last quarter, um, sellers outnumbered buyers by about 2 to one. I think some of that again may have had to do with the conflict in Iran and how that affects the supply chain issues. I think that's been probably addressed in the earnings reports. It'll be something that investors will want to watch to be sure going forward. But, as you've looked over the last 12 months, buyers have outnumbered sellers by about almost 2 to one. institutional ownership's at 67%. Institutions are clearly buying the stock. And I would say once this IPO uh is in the books and they've still got some time before some of the other bigname IPOs start at the end of the year, I would think that you're going to start seeing investors start taking a look at Celestica again and maybe add to their portfolios at the lower price. Yeah, let's talk about that a little bit more because even though we're talking about the Nvidia growth story, the complaint we hear from so many people is not necessarily looking at the percent gains that we're seeing, but also just looking at is this feasible for a retail investor to get involved in. And uh one thing I hear is that institutions are involved in it because the cost of entry is so high. So, I want you to talk about that average retail investor who maybe has $1,000 this month to invest in some stocks. And if they're looking at names like this one or even Credo, that's maybe two or three shares of these stocks versus looking at some lower cost uh stocks like the next one we're going to talk about where you could buy a 100 shares of the same stock if you think that it's a good thesis. How do you look at that as an investor? >> I think the one thing that I would always look at as an investor when I'm thinking about investing in one of these stocks is what is your goal in terms of that particular stock? Are you looking at the stock as a quick trade, something that you're looking to get in and out of in a few months? Are you looking to take more of a long position where this is a stock you're planning on holding for over a year and maybe three years and maybe five years? And I think if you're in that latter camp, fractional shares are your friend. You know, you don't have to necessarily take that $1,000 and dump it all into Celestica. you can you can buy fractional shares and you can still get the benefit of those price target increases and also that takes some of your risk off the table if the stock doesn't go the way you think it was going to go. If you have to get out of that position, there's going to be a significant less tax hit on you for getting in and out of that position. That's all I'm going to say. You know, Robin Hood, Weeble, and a lot of the other major brokerages are now going to fractional share buying. And there's a reason they're doing it. They're doing it because they know that that's going to meet bring more money into their platform, but it also does democratize it for retail investors. That's, you know, every investor has to make that decision for themselves. 4,000% gain is a 4,000% gain no matter how much of the stock you own. Um, the question I think that some investors just have to ask is what job are they asking this stock to perform in their portfolio? um is it something that they're buying and holding for the long term or is it something that they're looking as a short get in-n-out trade? If you're looking at it as a short get in-n-out trade, then absolutely I understand a price, you know, when you see a uh a stock price of over $300, that may not be appealing to you. If you're somebody that's looking at it and saying, "This is a stock that I believe in for the next three years, 5 years, or longer, yeah, you may just want to nibble at it and and add to your position incrementally." And again, it doesn't stop you from getting a gain. It might just say as a percentage you still get the same gain. It just is you might not get that same percent in actual dollars. >> Great information for investors out there. Chris, thanks for sharing your experience with that. Let's get on to this last name. I've talked about it enough and this is one that is a very different story than the other two, but it still falls on your list of that potential Nvidiaike growth story ahead of it. So, let's get to that last name. If investors are looking for a stock with a more appealing price point, this one's for them. We're talking about a fintech name. This is a company that is that operates in primarily Central and South America. It's not a name that may be well known for a lot of investors, but here's the story. This is the largest digital bank in the world by customer count. They have over 100 million customers. And that's because one of the markets that they operate in is Brazil, which as many people might know, Brazil alone has over 200 million people. But financial inclusion in the traditional banking sense is not very, you know, it it's far from common in that region. And so the company I'm talking about is New Holdings. Ticker symbol is NU. And they don't necessarily have to fight for market share in the company. It's just it's basically creating a market that doesn't currently exist. >> That is a very unique place to be as a business is creating a market that doesn't currently exist. That has some parallels to what Nvidia did, which is really creating that AI story. And boy, did they create a record- setting market out there. So, I think that's the thing I want to talk about. Nvidia helped to create the whole AI market, which is, as we know, has an incredible amount of capital invested in it. How much of a growth trajectory does this new market that new holdings is creating have uh in the long term? >> The potential for the market is obviously it's huge just in Brazil alone. That's interesting. But the one thing that I've noticed about new and I've written about the stock off and on, you know, in the past few years is that the company is trying to expand into other markets including the United States at least a little bit. They're trying to capture some of the idea that we've had immigration flow from some of these countries into the United States and they're trying to capture some of that that customer base. So, they are trying to expand geographically, but primarily this is still a Central and South America story and that may be good enough to drive the kind of growth that investors can, you know, can participate in. >> Yeah, but we're looking at the stock chart right now. We're not seeing that growth right now. This is the one compared to the other two charts. This is mostly all in the red. Why are we seeing the downturn right now for this name? >> Fintex just don't get a lot of love, but new has some of those characteristics. We're talking about a company that they don't have a branch network. So, they're not we're not talking about a physical inventory, bricks and mortar inventory that they have to maintain. There's no uh there's no legacy tech stack that they have to overcome. So, it has some structural cost advantages over traditional banks, but it's operating in a market that is still kind of is in that emerging market category. Institutional ownership on this one is actually surprisingly high. It's over 80%. But for whatever reason, it's just not getting a lot of interest actually more from the retail investor. Yeah, I think that's an important thing to to talk about is why fintexs don't get the love because you look at it and you see that they're even at consensus there's some good upside in this one especially compared to the ones we were just talking about. Um however the the trend for new in the last two months has not been great. It looks like we've got a couple of downgrades got some some uh lowering price targets happening. Is that a concern for you at all? And what could be leading to that? I know their earnings report wasn't quite a hit uh the the way that the market or the way that analysts had expected. So what other factors could be contributing to the readjusting of those price targets? >> The earnings report itself was was actually really good. I mean the first quarter revenue they came in at a record first quarter revenue of over 5 billion or right around 5 billion record net income of 877 million. Customer growth was was growing. So there really wasn't much in the headline numbers that concerned people. I think it's interesting because I think what you see in the fintex and I think maybe is also kind of akin to what you're seeing in the broader bank sector where you're seeing financials aren't necessarily participating in this rally or the rally that we were having prior to the last couple of days. I think there's just some uneasiness in the market about uncertainty. Let's just say that. I think there's just some uncertainty in a lot of different areas of the market and I think until that uncertainty clears up I think you're going to still see some pressure on financial stocks in general. >> I have one more question about new and that is just talking about what sets it apart because it's you said creating a market that's never been serviced before. Do their actual services stand up to the competition if they do want to move into the US. uh does what they have to offer as a platform compete well with what already exists here in the US or in other markets that might already have uh a similar service that's standing. >> The expansion story is one that I would be looking at pretty carefully because I agree with you Bridget. I think they're they might run into some problems in terms of differentiating themselves outside of their home region. But I think it's the home region I think is where the story still has a lot of growth. You're talking about just the home country alone, over 200 million people. Again, analysts aren't hating the stock. They they have a consensus price target of like $17 on it, which is a significant gain from where it's trading at right now. You start getting into stocks like this, you start getting into currency situations that I'm not we don't have enough time to start getting into that right now, but um you know, but again, I think it's going to depend on what the macro story is in Latin America and South America. and we'll just have to that's just one of that's I think the bigger issue for the company right now and going forward. >> All right, a great list today and Chris, thank you for these names. But if you want to hear more about a sector with a lot of future growth ahead of it, uh, because it's connected so closely to the AI story, make sure to watch this interview that just posted recently with Market analyst Thomas Hughes talking about three cyber security names that are so closely tied to that AI buildout story. They're continuing to have a long runway ahead. You can watch that full interview