My Self-Invested Personal Pension (SIPP) has many different growth stocks in it, ranging from Warhammer maker Games Workshop to AI chip behemoth Nvidia.
With this in mind, here are two growth stocks that I think are worth considering buying for the next five years. While each is different in size, I think both have clear paths to becoming larger companies in future.
$2.25trn giant
Let’s start with Amazon (NASDAQ:AMZN). With a colossal $2.25trn market cap, the company is no spring chicken these days. But despite its relative maturity and massive size, I can’t think of many firms pursuing more growth avenues.
For starters, it has integrated AI across its ecosystem, including agentic AI shopping assistant Rufus, which can shop tens of millions of items (including other online stores) and make purchases on behalf of customers. It helped drive nearly $12bn in incremental annualised sales last year.
Then there’s high-margin digital advertising, the fastest-growing segment, which I believe is underestimated given Amazon’s massive vault of consumer data. Ad revenue surpassed $68bn last year, with 22% growth in Q4.
Another emerging growth market is Amazon Leo, its satellite internet project which aims to compete with Starlink. The list goes on: AI chips, self-driving vehicles (Zoox), healthcare, as well as the core e-commerce and cloud computing operations.
Amazon expects to invest about $200bn in capital expenditures this year, mainly on data centres to expand cloud capacity for AI demand. And the risk is that the company doesn’t get a good return on this huge capital outlay, especially as it’s now raising debt to fund it.
However, management isn’t doing this with its eyes closed and fingers crossed. On the Q4 earnings call, CEO Andy Jassy said: “Customers really want AWS for core and AI workloads, and we’re monetising capacity as fast as we can install it.”
Today, the stock can be picked up for 29.2 times earnings (a 10-year low).
$85bn Latin American leader
MercadoLibre (NASDAQ:MELI) has essentially taken the Amazon playbook and successfully applied it to Latin America. Already a regional leader in e-commerce, its digital ad revenue surged 67% in the fourth quarter.
The firm also has its own streaming platform (Mercado Play) and subscription service (MELI+). And like Amazon, its vast logistics network allows it to deliver parcels faster than rivals. It recently opened its first fulfilment centre in China, allowing quicker shipping to its five largest markets (Brazil, Mexico, Argentina, Chile, and Colombia).
Revenue jumped 45% to $8.76bn in the fourth quarter, as gross merchandise volume rose 36.8% to $19.9bn. With e-commerce penetration levels roughly half the level of the US, UK, and China, the company has a massive growth opportunity ahead.
But what separates MercadoLibre from Amazon is its fintech unit, Mercado Pago, which offers credit and various financial services. Here, assets under management have grown from $2bn to almost $19bn over the past three years, with monthly active users more than doubling to 78m.
The stock has fallen 35% in less than a year because the company is investing in additional free shipping and fulfilment centres. This is pressurising margins in the near term, adding some risk.
But like Amazon, I think these investments will strengthen MercadoLibre’s competitive position in the long run, allowing it to capture the sizeable growth opportunities ahead.
