2 Stocks I Just Bought

When it comes to the stock market, there are more than 4,000 publicly traded companies in the United States. Every single day, investors have thousands of choices. So, when I decide to put fresh money to work, I don't take that decision lightly. And recently, I added two positions to my portfolio. Two stocks I would characterize as growth stocks. Not because I think they'll have a great quarter, not even because I think they'll necessarily be up in the next month, although I hope they are, but because I believe they have the potential to become a significantly larger business over the course of the next 5 to 10 years. One is benefiting from one of the fastest growing trends in digital advertising. The other is trying to disrupt in an industry that's been dominated by just a handful of players for decades. Today, I'm going to explain exactly why I bought these two stocks, the opportunities I see, the risks I'm watching, and why I still believe both have tremendous upside from here. So, before I unveil those two stocks, do me a huge favor. Smash that like button down below to support the channel. And while you're doing that, comment below what your latest buy to your portfolio has been. And if you want to see all the stocks I'm buying and selling with my portfolio trade alerts, stock deep dives, and weekly market reports and more, then make sure you join my private investing community, the Stock Investors Edge. see the pin comment down below. And with that being said, let's jump right into it with stock number one, which is going to be Apploven, stock ticker A. This has been one of the most remarkable growth stories in technology over the past few years. Yet, despite its incredible run, I still believe many investors misunderstand what this company has become. Originally, Apploven was known as a mobile gaming platform. Today, it's becoming an AI powered advertising company. Its Axon AI engine helps advertisers optimize campaigns across mobile apps and increasingly across broader digital advertising channels. The result, higher returns for advertisers, better monetization for publishers, and a platform that has become more valuable as it processes more data. That's exactly the kind of business model I like. And before I continue, let me thank today's video sponsor, which is the Mly Fool. The Mly Fool has a ton of great resources and products available for investors of all different levels. And right now when you go to full.com/mark, you could check out their 10 best stocks to buy right now completely free. Now getting back here to AppLoven, we can see on your screen that the stock is down over 40% on the year. If you recall, many software stocks, in fact, most software stocks got hit rather hard this year during the springtime heading into the summer. Some stocks have been able to bounce back a slight bit. stocks like Service Now, which I continue to like, and Microsoft, which just had a nice bounce after reporting earnings. But there are still deals to be had, and I believe Appven is one of those. I want to warn investors though that AppLoven reports earnings in the coming week on August 5th. So, know that before getting involved, you may want to wait for updated figures, and if it drops, buy then. For me, I wanted a little exposure now and then I'll wait and see when they report before buying more. But regardless of the company or stock I should say, one thing I always look for before buying is operating leverage. Can a company grow their earnings faster than revenue? Apploven continues to do exactly that. Looking at this chart here, you can see the growth over the past few years since the change was made in the business model. Growing revenues to a new record high of 6.2 2 billion operating profits at a record high of 4.75 billion and operating margins at a record high sitting at 77.1% which is just simply incredible. To be able to operate a business at those margins is astonishing, but I wouldn't expect those to keep climbing. Another area that is extremely encouraging is the company's ability to generate cash, free cash flow to be exact, which is sitting at a record high of 4.4 billion, which equates to a free cash flow margin north of 70%. To put this into easy to understand terms for viewers, for every dollar of revenue this company generates at the end of the day, after they pay all of their operating expenses, reinvest back into the business via capital expenditures, after all of that, 70% of every dollar of revenue that's generated by this company is turned into free cash flow. Free cash flow margins north of 20% are solid. Apploving is at 70%. Management consistently exceeds expectations. Another reason I remain bullish is that AI isn't just making advertisements more efficient. It's improving the economics of the entire advertising ecosystem. As companies continue increasing digital advertising budgets, platforms capable of delivering superior results should continue taking market share. Now, of course, no investment is perfect or without risks. And as I mentioned, earnings are coming up this week, which is why I only bought a half position to start. Some of those risks include advertising spending could slow during an economic slowdown. However, the economy right now continues to look on stable footing. Competition is another risk as it too remains intense. And after such a strong run, the valuation still requires continued execution as earnings need to produce. But when I weigh the risk against the long-term opportunity, I continue believing AppLoven deserves a place in my portfolio. Taking a look here at valuation, you could see the stock has a forward PE of 18.7 times with earnings expected to grow 32% in 2027, giving the stock a PEG ratio below 1. Taking a look at my stock investors edge valuation site, which is available to all premium subscribers, by the way, inside my private investing community, and again, you can check out the pinned comment in the link below, we could see the stock has an edge score of 76, which is very solid. Anything above 70 is usually a good score in my book. Analysts remain upbeat on the stock as well, giving the shares an average 12-month price target of $646 per share, implying more than 60% upside from current levels. Again, Apploven is one of those names that is performing well, but it's been mixed in with the wrong crowd as the software trade has faltered in 2026. The key thing here, know the earnings risk this week before getting involved. And with that being said, now let's move on to stock number two, which is going to be Rocket Lab, stock ticker RKB. This is one of the most exciting long-term growth companies that I own and one I have been playing a lot within my options community, Options Edge Plus, where you could see all of my option trades when I enter and when I exit those trades. Again, you can check out the pin comment down below for more info. But when it comes to Rocket Lab, I put a video out roughly a year ago titled three stocks that could double in the next few years. Little did I know within the next few months that that would happen. And it didn't stop there as the stock jumped as a high as 220% from the day that I released that video. But pretty wild to think that after a full 12 months, the stock is up just 45%. Now, just 45% sounds like I'm being a bit high maintenance given that that's very strong return over the course of 12 months. But as you just saw a second ago, this is a stock that was up over 200% at one point in late May. And since that time period in late May, shares have cratered more than 50%. H what happened the first few weeks of June that might have started all of this selling in Rocket Lab? Oh, that's right. A little space company called SpaceX went public then. And what happened was a lot of retail investors were looking to raise cash to partake in that popular IPO. So companies like Rocket Lab among others that operates in the same space, no pun intended, saw their share price tank. But that is where opportunities come up because that didn't change anything about the business. The business continued to win new contracts. The missions continued to go on as planned and the company continued generating more and more revenues. When most investors think about space, they immediately think about launches. But Rocket Lab is becoming much more than just a launch company. Today, the business has three major growth engines. First, small satellite launches through Electron. Second, its larger Neutron rocket, which dramatically will expand the company's addressable market. Now, Neutron is expected to see its first launch by the end of this year if all goes to plan. But, as we've seen in the past, delays are normal. And the third growth engine is rapidly growing space systems business. That includes satellite components, solar panels, flight software, guidance, reaction wheels, and many of the technologies used by government and commercial customers around the world. In fact, today much of Rocket Lab's revenue actually comes from space systems rather than launches. That's an important distinction. Speaking of revenue, Rocket Lab has generated nearly 680 million on the topline sales over the trailing 12 months. That number is expected to reach nearly 920 million by the end of this year and 1.3 billion by the end of next year. So why am I buying Rocket Lab? Well, one thing that excites me most is where the industry sits today. Governments continue increasing investments in national security. Just last week, the Trump administration also unveiled plans to speed up commercial space licensing, which could certainly benefit launch providers like both SpaceX and Rocket Lab. Commercial satellite demand continues growing. constellations require ongoing replenishment and the overall space economy is expected to expand significantly over the coming decade. If Neutron executes successfully, Rocket Lab transitions from competing primarily in small launches to competing for much larger government and commercial missions. That's a completely different opportunity. The space economy as a whole is expected to grow to 1.8 trillion by the year 2035, and that number will likely be larger by then. But again, all stocks come with risk and some of the risk that pertain to Rocket Lab is well, execution. Execution remains critical. Rocket development is very expensive. Launch schedules can slip as we've seen delays with Neutron time and time again, which should have been completed and seen its first launch already in 2025, but now here we are, and we'll be lucky if we see it in 2026. However, one of the biggest issues right now for many investors is the company's lack of profitability. The company's not expected to turn a profit until the end of 2027 and after that it could be off to the races. So getting in here, yeah, it may be early, which is why it will be a wild ride. Expect volatility, but I believe in the long-term vision of the company. And lastly, competition from the likes of SpaceX obviously remains intense. Those are all very real risks, but I also believe the market opportunity is enormous for patient investors willing to accept volatility. Rocket Lab could become one of the more interesting long-term growth stories in the market. So, when I'm looking at these ultrathrowth type stocks, one important area to address is the company's liquidity. Taking a look here, we can see a company with 1.38 billion in cash and cash equivalents and only 138.7 million in total debt, which makes me feel much more comfortable as an investor because they continue to fund things they need until they eventually turn a profit. Analysts continue to believe in the growth story as well as they give the stock an average 12-month price target of $113 per share, implying more than 70% upside from current levels. And that's not really that close to the stock's 52- week high of $151. Not a massive position for me here, but again, a great way to play Rocket Labs is through the use of options, as the premiums are quite juicy. Now, you may be wondering why these two stocks. One company focuses on AI powered advertising. The other builds rockets and satellites. They couldn't be more different. But what they have in common is exactly what I look for. Large addressable markets, founder or execution focused management, strong revenue growth, improving business quality, and multiple catalysts that could drive earnings higher over the next several years. I'm not buying these companies because I think they'll double next month. I'm not buying these stocks to be pillars of my portfolio. I'm buying them because I believe both businesses have the potential to be meaningfully larger the next five years from now. They both pack a powerful growth punch opportunity. At the end of the day, every investment comes with risk. Neither AppLoven or Rocket Lab will move in a straight line. In fact, it will likely be the opposite. Both will likely experience periods of significant volatility. But that's part of investing in high growth businesses. When I find companies with expanding markets, improving fundamentals, and management teams that continue executing, I'm willing to look beyond the short-term noise. That's exactly why I added to both AppLan and Rocket Lab. I'll continue following both companies closely, watching their upcoming earnings reports, and if the investment thesis continues improving, I wouldn't be surprised if I continue adding over that time. So, those are the two stocks I just bought. Now, I'd love to hear from you. If you had fresh cash to invest today, which one would you rather buy? Is it Apploving or Rocket Lab? Or is there another stock that's currently at the top of your watch list? Let me know down in the comments below. And if you enjoyed today's video, don't forget to hit that like button down below, subscribe to the channel, and with that being said, we'll see you in the next one. Take care. >> [music]