The stock market got off to a wild start in early 2021. The strong performance of technology companies and the increased potential for another big round of stimulus added a bullish momentum. But the recent volatility was triggered by the short-squeeze craze around GameStop and a handful of other companies are creating uncertainty and complicating the picture.
While it makes sense to keep an eye on the day’s events, investors will generally be better served by maintaining a long-term focus and putting their dollars into strong businesses that are ready to go through. With that in mind, read the three promising growth stocks that are worth buying in February.
Image source: Getty Images.
1. PubMatic
Digital advertising reshaped the media landscape. The move took dollars from distribution channels, including cable television and print media, but the overall effect extends far beyond just shifting spending to new channels. It facilitated great growth in the wider digital communications space.
In addition to serving as a basis for Alphabet and FacebookIn technology empires, digital ads are at the heart of the Internet experience and economy. For most of the pages you visit on the web, digital advertising is the monetary fuel that keeps the machine running – whether through direct ad serving or data collection that is used to serve your ads in the future. PubMatic (NASDAQ: PUBM) is a company that provides software to make advertising increasingly flexible and hyper-focused, and can have a long path of growth.
Programmatic advertising is a game-changing approach to buying and targeting ads. Integrating data analysis and artificial intelligence, PubMatic and other market participants are providing cloud-based software to automate the purchase of advertising. This approach allows companies to get more out of their advertising investments, and spending can be quickly redirected to other opportunities that generate better results.
PubMatic’s stock price has risen about 41% since closing on the day of its initial public offering in December 2020, and the company now has a market capitalization of around $ 1.9 billion. Not the only player in space, and bigger rivals, including The Trade Desk and Magnite (up to 1,470% and 1,670% in the last three years, respectively), will be vying for the category’s growth, but PubMatic has a good chance of posting a strong performance and delivering impressive returns.
2. Amazon
Amazon (NASDAQ: AMZN) can play a bigger role in shaping the coming decades than any other company on Earth. The technology giant already holds leadership positions in e-commerce and cloud computing, two of the most influential industries on the planet, and the continued growth of online retail and communications has placed the company at the center of the business overhaul and everyday life experiences.
Amazon is also giving a substantial boost to the digital advertising market, challenging category leaders, including Alphabet and Facebook. This growth bet can have big returns in the long run and is something investors should be excited about.
The global digital advertising market generated $ 169.7 billion in 2020, according to ResearchAndMarkets. The sector is expected to grow at a compound annual growth rate of approximately 11.9% through 2023, reaching US $ 237.5 billion at the end of the forecast period.
As more commerce and communications move more and more to online channels, the digital ad market has room for continued growth. Better yet, the strengths of individual Amazon companies are reinforcing each other and should continue to do so in the future.
The company has great advantages when it comes to technology and data infrastructure, and its industry-leading online retail platform naturally stands out as a valuable destination for advertisers. The experience in cloud computing and a massive e-commerce platform have laid the foundation for pursuing other promising growth initiatives, and these projects also have the potential to further strengthen the two main pillars. Amazon’s overall business is beautiful.
3. Take-Two Interactive
Take-Two Interactive (NASDAQ: TTWO) has been one of the biggest success stories in the video game industry in the past decade. The company’s stock price rose by around 1,500% over that time, and the growth in its market capitalization was even more impressive, almost 2,100% across the stretch, thanks to the added benefit of creating new shares. Much of this incredible performance resulted from Grand Theft Auto V (GTA V), Take-Two’s most successful game – and also the most profitable entertainment release in history, according to some reports.
Take-Two released the first versions of the game in 2013 and continued to port the game to new platforms. This expanded the game’s audience and generated extra revenue as players purchased the game multiple times to gain access to improved graphics and expanded features. Take-Two also maintained GTA V alive and prosperous with the help of regular content updates for its online multiplayer mode, and the title has sold over 135 million copies and grossed billions of dollars in sales of high-margin game content.
Now, Take-Two is ready to release an updated version of GTA V in Sony‘sand Microsoftrespective next-generation consoles, and it looks like the title still has a lot of momentum. Launching new content updates for Grand Theft Auto VOnline mode to keep players engaged and spending with in-game currency has been hugely profitable for Take-Two, and the debut on PlayStation 5 and Xbox Series X and S in late 2020 will help the company achieve even more longevity record title.
With Take-Two preparing for what is likely to be another highly profitable launch of GTA V, and seeing high performance for other franchises, including NBA 2K and redemption of the red dead, the company has never looked stronger.