I just invested £4k of my ISA in these 3 brilliant growth stocks

Edward Sheldon has an investment horizon of 15-20 years. And he expects these growth stocks to deliver big returns over that timeframe.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

The flag of the United States of America flying in front of the Capitol building

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

A lot of high-quality growth stocks have taken a hit in recent weeks and I think this is a good buying opportunity for long-term investors like myself. In the long run, many of these stocks are likely to climb higher as their revenues and earnings grow.

Here, I’m going to highlight three I’ve been buying for my ISA in the recent sell-off. I reckon these stocks have the potential to make me a lot of money in the long run.

Amazon

First up we have Amazon (NASDAQ: AMZN). It‘s one of the so-called Magnificent 7 stocks.

Should you invest £1,000 in Vodafone right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Vodafone made the list?

See the 6 stocks

Amazon has had a significant pullback in the market sell-off. Only a few weeks ago, it was trading near $200. Now however, it’s in the $160s.

Created with Highcharts 11.4.3Amazon PriceZoom1M3M6MYTD1Y5Y10YALL6 Apr 20203 Apr 2025Zoom ▾Jul '20Jan '21Jul '21Jan '22Jul '22Jan '23Jul '23Jan '24Jul '24Jan '25202120212022202220232023202420242025202550100150200250www.fool.co.uk

At current levels, I see considerable value on the table here. With analysts expecting earnings per share of $5.82 next year, the forward-looking price-to-earnings, or P/E, ratio is under 30. That’s a historically low valuation for this disruptive company.

It’s worth pointing out that consumer weakness (in the online shopping space) is a risk in the short term. This is one reason the shares have pulled back lately.

Taking a five-year view, however, I expect this stock to be sitting at much higher levels. Looking ahead, revenues and earnings should keep growing at an impressive rate thanks to the company’s exposure to cloud computing (19% growth last quarter) and artificial intelligence (AI).

ASML

Speaking of AI, one stock I’ve been buying for more exposure to the theme is ASML (NASDAQ: ASML). It’s a semiconductor manufacturing equipment maker that specialises in technology that can print microscopic patterns onto silicon wafers, enabling the creation of more powerful computer chips.

Like a lot of semiconductor equipment stocks, ASML has experienced a major pullback recently. In the space of a few weeks, its share price fell nearly 30%.

Created with Highcharts 11.4.3ASML PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

I see this pullback as an amazing opportunity. Next year, revenue and earnings are forecast to grow 33% and 57%, respectively, on the back of the AI boom. So, I think buying shares now – while the P/E ratio is in the mid-20s – is likely to pay off for me.

I’ll point out that I’m not expecting this stock to climb in a straight line in the years ahead. This company can experience lumpy sales and its share price can be quite volatile at times.

In the long run, however, I expect the stock to do well.

KLA Corp

Given the carnage across the semiconductor space, I decided to buy KLA Corp (NASDAQ: KLAC) too. Its share price had fallen more than 20%.

Created with Highcharts 11.4.3KLA PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

This is another company that’s likely to play a crucial role in the AI revolution. That’s because its technology helps semiconductor manufacturers with quality control and production efficiency.

In the years ahead, the chip industry is likely to experience huge growth on the back of the AI boom. And I see this company as the perfect ‘picks-and-shovels’ play.

A risk here is the ongoing US/China stand-off. This could lead to lower sales for the company in the future (it generates a lot of its revenues in China).

With the stock currently trading on a forward-looking P/E ratio in the low 20s, however, I like the long-term risk/reward skew.

We think earning passive income has never been easier

Do you like the idea of dividend income?

The prospect of investing in a company just once, then sitting back and watching as it potentially pays a dividend out over and over?

If you’re excited by the thought of regular passive income payments, as well as the potential for significant growth on your initial investment…

Then we think you’ll want to see this report inside Motley Fool Share Advisor — ‘5 Essential Stocks For Passive Income Seekers’.

What’s more, today we’re giving away one of these stock picks, absolutely free!

Get your free passive income stock pick

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Ed Sheldon has positions in ASML, Amazon, and KLA. The Motley Fool UK has recommended ASML and Amazon. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. 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.

Pound coins for sale — 51 pence?

This seems ridiculous, but we almost never see shares looking this cheap. Yet this recent ‘Best Buy Now’ has a price/book ratio of 0.51. In plain English, this means that investors effectively get in on a business that holds £1 of assets for every 51p they invest!

Of course, this is the stock market where money is always at risk — these valuations can change and there are no guarantees. But some risks are a LOT more interesting than others, and at The Motley Fool we believe this company is amongst them.

What’s more, it currently boasts a stellar dividend yield of around 8.5%, and right now it’s possible for investors to jump aboard at near-historic lows. Want to get the name for yourself?

See the full investment case

More on Investing Articles

Dividend Shares

Of the 20 highest-yielding FTSE 100 stocks, this is my top pick

This FTSE 100 stock currently offers a yield of 6.4%. But Edward Sheldon believes it’s capable of providing share price…

Read more »

Investing Articles

Could Tesla’s share price jump over the next 12 months? These analysts think so!

Tesla's share price has fallen by almost a third since 1 January. But optimism is high that Elon Musk's company…

Read more »

Investing Articles

I asked ChatGPT where the FTSE 100 will be in 6 months: here’s what it said…

Let’s be realistic, ChatGPT can’t predict the future. But it did do a good job of compiling data from brokerages…

Read more »

Investing Articles

Could the Rolls-Royce share price hit £10?

The Rolls-Royce share price has taken most analysts by surprise with almost everything going right for the British engineering giant.

Read more »

Investing Articles

4 REITs Fools own for passive income

REITs often have higher-than-average dividend yields compared to other stocks, making them a solid choice to consider for passive income…

Read more »

artificial intelligence investing algorithms
Investing Articles

Up 272% in just a year, is Palantir stock just getting started?

This writer recognises that Palantir has grown its business very well -- but does the stock price offer him an…

Read more »

Runner standing at the starting point with 2025 year for starting in new year 2025 to achieve business planing and success concept.
Investing Articles

Up 50%? The Aston Martin share price forecast is mind-blowing! 

If analysts are right, the Aston Aston Martin share price could absolutely rocket in the year ahead. Harvey Jones says…

Read more »

Investing Articles

As the S&P 500 drops, here are 2 Stocks and Shares ISA holdings I’m watching

Our writer has different views on how President Trump's tariffs might affect these two US holdings in his Stocks and…

Read more »