The Ultimate Growth Stock to Buy With $1,000 Right Now

When you think of growth stocks these days, you probably think of players in the technology sector, and specifically those that are exposed to the artificial intelligence (AI) trend. Those are the stocks that lifted the tech-heavy Nasdaq Composite index to record levels last year. But you don't necessarily have to invest in tech to add elements of growth to your portfolio.

You'll find these sorts of players, focused on expansion and translating that into increased earnings, across industries. And one in particular that has clearly demonstrated its ability to grow -- and that offers good reasons to be optimistic about what's ahead for it -- is a company in the travel industry. I'm talking about leading cruise line operator Carnival (NYSE: CCL) (NYSE: CUK), which has reported records on metrics from revenue to bookings in quarter after quarter recently.

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Here's why I view it as the ultimate growth stock to buy with $1,000 right now.

Image source: Getty Images.

You can invest $1,000 -- or a lot less

First, it's important to note that you don't even have to have $1,000 to invest in Carnival right now. Considering its share price of just under $25, you can get started with a whole lot less. But if you do have $1,000 you're ready and able to put to work, you can gain greater exposure to this market leader -- a wise move if you already have a well-diversified portfolio. (It's never a good idea to put all of your money in just one stock, though, so if you are just getting started on the investing path and have $1,000 to work with, it would be a better idea to spread it across a few stocks.)

Now, let's get back to Carnival. The world's biggest cruise company had an extremely rough time during the early phase of the pandemic, when it and its peers had to halt their operations. The company shifted from profitability to losing money, and with no revenue coming in had to take on heavy new debt to stay afloat. Since then, of course, it has resumed full operations and demonstrated its ability to turn things around. It has also become clear that vacationers still love cruising, and they've been flocking to Carnival's ships.

Carnival made various efforts to lower its costs and boost earnings in recent years -- from replacing old ships with newer, more fuel-efficient ones to choosing more fuel-efficient routes and fostering added onboard spending by passengers. And in 2023, the company set out a set of performance goals that it expected to reach by 2026. These "SEA Change" goals include a 20% reduction in carbon intensity compared to 2019, a 50% increase in EBITDA in relation to a measure of passenger capacity, and an expansion of adjusted return on invested capital (ROIC) to 12%. These last two goals are compared to 2023 figures.

Carnival's recent records

In Carnival's latest quarterly report, management said it expects to reach the EBITDA and ROIC goals in 2025 -- one year early. The company also reported a series of record results: first-quarter revenue, operating income, and booking volumes for 2026. The booking volumes are particularly encouraging as they offer a reason to be optimistic about the year ahead.

Carnival also has continued to work on paying down its debt load, initially focusing on variable-rate debt to make it less vulnerable to potential interest rate increases. In its fiscal 2025 first quarter (which ended Feb. 28), Carnival refinanced $5.5 billion of its debt, resulting in $145 million in annualized interest rate savings.

Of course, the company still faces certain risks. Investors are worried about President Donald Trump's tariffs on imports, which will result in higher prices for American consumers. That, in turn, is going to leave them with less disposable income to spend on luxuries like travel. On top of this, Commerce Secretary Howard Lutnick earlier this year threatened to find new ways to tax the cruise industry -- a comment that temporarily weighed on cruise stocks.

What the headwinds mean

These elements could represent some headwinds for Carnival, but I don't think they outweigh all of the positive points. Trump's team has started to develop frameworks for what may become agreements on trade -- including with the U.K. and China -- and what we're hearing about those deals seems to be better than was previously expected. As for the threat of new taxes on cruise companies, analysts have said the selloff that followed Lutnick's comments was overblown. Sharon Zackfia of investment bank William Blair said the cruise industry as a whole would offer the U.S. less than $2 billion in new tax revenue if the income taxes being discussed were applied, making "the juice... not worth the squeeze."

Finally, a look at valuation shows us Carnival now trades for 12 times forward earnings estimates, down from about 18 times late last year. In light of Carnival's successful recovery and long-term potential, that lower price makes this stock the ultimate growth player to buy with $1,000 or even less today.

Should you invest $1,000 in Carnival Corp. right now?

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Adria Cimino has no position in any of the stocks mentioned. The Motley Fool recommends Carnival Corp. The Motley Fool has a disclosure policy.