These 2 Growth Stocks Are No-Brainer Buys Right Now

When it comes to investing, sometimes you want to take a big swing. After all, it's not always the number of winners in your portfolio that power your returns, but finding a few stocks that can be massive winners over time.

Let's look at two no-brainer growth stocks that fit that bill.

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Hims & Hers: A shift in strategy creates a huge long-term opportunity

Hims & Hers Health (NYSE: HIMS) has quietly been not just one of the fastest-growing names in telemedicine, but in the entire market. In 2022, it grew its revenue by 94%, followed by 65% growth in 2023 and 69% in 2024. That momentum carried into the first quarter of this year, with revenue surging 111% and its subscriber base jumping 38% to 2.4 million. Meanwhile, this isn't just about top-line growth, its profitability and cash flows are also soaring. Last quarter, its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) nearly tripled year over year, while its adjusted earnings per share (EPS) and operating cash flow quadrupled.

The company has built a sticky, high-margin recurring business model across men's and women's health, thanks largely to personalized subscriptions. Last quarter, nearly 60% of its subscribers used at least one personalized treatment, up from just 35% last year. The company sees this as a key driver going forward and is expanding personalized offerings across categories like low testosterone, menopause, and preventative health. It's a smart strategy to create a moat in a crowded business that otherwise would have minimal differentiation.

The company's biggest opportunity, however, is in weight loss drugs. Hims has gone from entering the GLP-1 market a year ago to now projecting $725 million in weight-loss drug revenue this year alone. That's a massive new revenue stream. While the category comes with a lower gross margin, it's fueling tremendous growth in overall gross profit dollars and helping the company add new customers.

The company is also evolving its weight loss strategy. After using a loophole to sell compounded versions of GLP-1 drugs like semaglutide at lower prices than branded drugs, Hims & Hers is now shifting toward selling branded GLP-1 drugs. It's partnered with Novo Nordisk to sell a Wegovy-branded weight loss drug, while it has also started selling Eli Lilly's Zepbound and Mounjaro GLP-1 drugs. It also added the generic drug liraglutide to its platform. Hims couldn't sell compounded GLP-1 drugs forever, but it's smartly pivoted to be able to still capture this huge opportunity.

Hims & Hers is not without risks, and in fact, a lot of investors are betting against the company, as evidenced by its high short interest. However, the company has been a growth machine, and it continues to have a long runway ahead.

Image source: Getty Images.

SoundHound AI: Betting on an voice-powered agentic AI platform

SoundHound AI (NASDAQ: SOUN) first got on investors' radars when Nvidia revealed it had bought shares in the company back in the fourth quarter of 2023. While the chip giant has booked its gains and moved on, SoundHound still offers a lot of potential upside.

SoundHound operates an artificial intelligence (AI) conversational intelligence platform. Its solution uses speech-to-meaning and deep-meaning-understanding technology to better understand a user's intent and provide them with a better experience.

The company generates revenue primarily through royalties and subscriptions. When its software is embedded in a car or device, it gets paid based on usage, units sold, or transaction volume. It also sells its voice AI directly to service businesses via subscriptions.

SoundHound has a strong foothold in the auto industry, where its technology is being used by major brands like Hyundai, Kia, and Stellantis. It's also made strong inroads in the restaurant industry, where its voice AI technology is used for drive-thru, phone, and kiosk ordering systems. Meanwhile, with its 2024 acquisition of Amelia AI, SoundHound has expanded into other industries like healthcare, financial services, and retail.

The bigger long-term opportunity for the company, though, is in agentic AI. Its AI agents wouldn't just answer questions, but they'd actually perform tasks. One example of this would be calling a medical practice to find a specialist. Instead of you navigating a phone tree, an AI agent would find the type of doctor you're looking for, book your appointment, check your insurance, and send over your medical records -- all without a human ever picking up the phone. That's the type of future SoundHound is hoping to create.

SoundHound recently launched Amelia 7.0, a major step forward in this goal, as it incorporates AI agents into its platform. It's billing itself as the only AI platform that combines AI agents and voice technology.

SoundHound has been growing quickly, with revenue surging 151% last quarter, but the stock isn't cheap, and the company has seen gross margin pressure following the Amelia acquisition. Some of this gross margin pressure is due to a quirky accounting issue, while some stems from lower-margin contracts that the company is looking to improve as contracts roll off. That said, if SoundHound can become the voice layer of agentic AI, it could have massive upside from here.

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Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Hims & Hers Health and Nvidia. The Motley Fool recommends Novo Nordisk and Stellantis. The Motley Fool has a disclosure policy.