I’m 30, so I’m not expecting to retire for some time. This allows me to take a very long time horizon on my SIPP (Self-Invested Personal Pension) investments.
This extended timeframe enables me to consider more aggressive investment strategies, such as including a higher proportion of growth stocks in my portfolio.
While growth stocks may experience short-term volatility, their potential for substantial capital appreciation aligns well with the extended time horizon afforded by my age.
This approach allows me to ride out market fluctuations, potentially benefiting from the compounding effect and maximising my retirement savings over the years.
So today, I’m looking at high potential growth stocks, all of which have already seen impressive growth.
And while a surging share price can put some investors off, for many companies it’s just the start. Just look at Apple and Amazon.
AppLovin
AppLovin (NASDAQ:APP) is up 337% over 12 months. It’s gone from strength to strength with successive earnings beats and amid a relatively resilient advertising market.
It’s a particularly exciting company due to its leading role in mobile app monetisation and advertising technology. And its innovative platform empowers app developers and advertisers to make more money.
In simple terms, it provides technologies that help businesses of every size connect to their ideal customers.
However, I recognise that the tech industry’s rapid evolution means AppLovin, like any tech company, must navigate potential disruptions, making adaptability essential for sustained success. An economic downturn may also pose challenges for this ad-focused business.
Despite being up 337% over 12 months, it trades with a forward price/earnings-to-growth (PEG) ratio of 0.64. A PEG ratio of one suggests fair value, so I can deduce from this that the stock remains undervalued by around 36%.
As an investor in AppLovin, I certainly believe in the stock’s ability to continue growing.
Super Micro Computer
Super Micro Computer (NASDAQ:SMCI) has demonstrated plenty of volatility in recent months. But it’s up 255% over 12 months.
This company excites me due to its leadership in providing advanced server solutions that cater to growing data centre demands — a major trend during the AI revolution.
Like AppLovin, it operates in a highly transformative and changeable environment that provides both opportunities and risks. And in this ever evolving space, Super Micro will need to continually develop its offering to avoid becoming redundant.
However, with a PEG ratio of 0.6, it could be undervalued by as much as 40%. Moreover, it’s an enabler of the AI revolution, and that’s a big trend to take advantage of right now.
Essentially, Super Micro allows big tech companies to build cutting-edge processing power into their data centres. And that’s important as big tech companies require increasingly powerful operating systems to power their complex AI language models.
With its proprietary cooling technology, Super Micro Computer is in pole position to prosper as the AI chip market grows 10x over the next three to five years.
And this is one thing that sets Super Micro apart. Its customisable solutions, including the capacity to regulate the temperature of chips, using things like liquid cooling, optimise the performance of big tech assets. The company also benefits from key partnerships with Nvidia and AMD.
Despite the surge, I’m holding this stock for more growth.
The post Up 250%+, are these stocks right for my SIPP? appeared first on The Motley Fool UK.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. James Fox has positions in AppLovin Corporation and Super Micro Computer. The Motley Fool UK has recommended Amazon, Apple, and Nvidia. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
