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3 Top Growth Stocks to Buy in September

Are you less worried about today’s headlines and more focused on finding great long-term growth investments? That’s fine. In fact, that’s good. Often, the current noise ends up being just that: noise. A year from now (and certainly five years from now), what’s happening right now just won’t matter much.

With this in mind, here’s a rundown of three top growth stocks to buy this month. Two of the three have taken a hiatus from their bigger-picture rallies of late but could rekindle those rallies sooner rather than later. The third stock is still going strong, but with double-digit percentage sales and earnings growth in the cards for the foreseeable future, stepping in near a record high is hardly unthinkable.

Image source: Getty Images.

1. Advanced Micro Devices

When most investors think of companies in computer graphics technology, Nvidia first comes to mind. And even with its R&D struggles right now, Intel remains the leader of the broader computer processing arena. If you haven’t taken a look at the company playing the proverbial second fiddle in both of those markets, however, you would be wise to put Advanced Micro Devices (NASDAQ:AMD) on your watch list, if not in your portfolio.

If you know anything about AMD, then you likely know the launch of its Vega-powered video cards and Ryzen CPUs back in 2017 pretty much reinvigorated the then-faltering company, even serving as stepping-stones into new markets. What you might not realize, however, is just how far AMD has come in the meantime.

According to data from PassMark Software, AMD and Intel are now essentially tied when it comes to market share control of the desktop processing market (and have been since the first quarter), versus AMD’s 2016 rock-bottom share of less than 24%. And though it still only accounts for a relatively small piece of the market, AMD’s 7.8% share of the server processor market as of the current quarter is the tech company’s fastest growth in server CPU sales in over a decade.

Clearly, the company is doing something right in particularly challenging circumstances.

Sure, the analyst community is only lukewarm on AMD stock at its current price near $110 a share, rating it only a little better than a hold with a consensus target of just above $114. This might be why share growth has stalled since July.

AMD is a growth stock, however, with a persistently rising average target price matched with a lengthening history of rising revenue. Even small dips have been great buying opportunities.

2. Li Auto

While the market has largely treated the advent of electric vehicles like a two-horse race between incumbent Tesla and challenger Nio, the fact is, there’s room for more than two dedicated EV makers in this arena. Investors looking for the overlooked and underestimated play in this space should take a look at China’s Li Auto (NASDAQ:LI).

To be clear, it’s still very much a start-up. It only began delivering its first high-end EVs in 2019, and only delivered 9,433 of these Li One automobiles in August. For perspective, Tesla delivered more than 201,000 of its battery-powered vehicles during the second quarter of this year.

But take a step back and look at the trajectory Li Auto is on. Its output went from essentially nothing as of early 2019 to more than 9,000 vehicles per month as of last month. That’s more or less in line with Nio’s deliveries of 21,896 EVs during its second quarter of this year, even though Nio’s production had more than a full year’s head start on its younger competitor. While its production growth rate will mathematically cool off now that Li Auto has some scale, analysts are still calling for top-line increases of nearly 72% next year, which should be enough to push the company out of the red and into the black and get the stock moving upward again.

And if you have any doubt as to the continued growth potential of the EV market, Meticulous Research estimates that the market will grow by an average of 34% per year through 2027. There’s plenty of business to go around.

Rising bar chart drawn on a chalkboard.

Image source: Getty Images.

3. ServiceNow

Finally, add ServiceNow (NYSE:NOW) to your list of top growth stocks to buy in September.

It’s not exactly a household name, though if you work with computers attached to the cloud you have probably interacted with a ServiceNow product. The company develops a cloud computing platform to help companies manage digital workflows and offers software allowing its clients’ employees to build their own customized apps.

ServiceNow isn’t the only player in the business, although there’s plenty of business to go around. Information-technology market researcher Gartner estimates this so-called “low code” app development market is on pace to grow nearly 23% this year, while BrandEssence Market Research forecasts an annualized growth rate of more than 26% for the industry through 2027.

And while the company isn’t the only name in the low-code/no-code market, it’s undoubtedly one of the best. ServiceNow was ranked as a “leader” in Gartner’s 2021 assessment of all the major digital workflow names, graduating from last year’s “challenger” status to rub elbows with names like Broadcom while looking in the rearview mirror at companies like Microsoft and IBM, both of which are still just considered challengers within this space.

This leadership shines through in the numbers, too. This year’s revenue is projected to improve on 2020’s total by 29%, and press on to a rate of more than 25% next year. Earnings are expected to rise at an even faster clip than sales — this year and next — making this stock a buy despite the fact that it just reached record highs late last week.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.


https://www.fool.com/investing/2021/09/09/3-top-growth-stocks-to-buy-in-september/