3 Brilliant Growth Stocks to Buy Now and Hold for the Long Term

Key Points

• The U.S. EV market may be slowing, but that's not the case in China for companies like Nio.

• Nvidia isn't the only way to invest in AI data centers' growth; you should also consider Broadcom.

• Roku is perfectly positioned to handle whatever the future of the streaming business holds.

• 10 stocks we like better than Broadcom ›

Got a little money, and a lot of time to let it work? If so, great! You can not only afford to buy growth stocks, but maybe even take some well-calculated risks -- on the right companies, of course. Just stay focused on their long-term prospects when things get a little worrisome in the short run.

Here's a rundown of three brilliant stocks to buy now and hold for a while. Note that all three are proven winners in an industry that has a bright long-term future of its own.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Nio

The electric vehicle (EV) business may be hitting a wall here in the United States. That's not the case elsewhere though. In most other parts of the world, EVs are still being increasingly embraced. That's particularly true in China, where, according to a report from industry research outfit Rho Motion, June's sales of battery-powered electric vehicles soared 28% year over year to a record-breaking 1.11 million cars.

That's 60% of the planet's entire EV sales for the month in question, and about half of China's total automobile sales. And it only gets better from here. The International Energy Agency expects electric vehicles to account for 80% of China's total car sales by 2030.

Enter Nio (NYSE: NIO). Yes, it primarily serves the Chinese market, but no, it's not the market's biggest name. It's not even close, in fact. That honor belongs to BYD, followed distantly by the likes of Wuling, Tesla, Li Auto, and Geely Automobile, just to name a few. Then there's Nio, which delivered a mere 24,925 cars last month, mostly within China.

Its modest market share, however, is a key component of the bullish argument. It's got room to grow by penetrating its home country's fast-growing market. And it is. Nio's total deliveries jumped 17.5% year over year last month, capping off a 25.6% increase for the full quarter. Consumers there are falling in love with its affordable luxury as well as its practical lineup of vehicles, many of which are small SUVs and crossovers.

Underscoring this argument is the 36% top-line growth analysts expect for this year preceding next year's projected sales growth of 29%, both of which will help push the carmaker closer to profitability. The revenue growth pace, however, could persist for years, if not decades.

Broadcom

Most investors have heard of Broadcom (NASDAQ: AVGO). Many of these very same investors, however, would struggle to name a single particular piece of technological equipment it makes. The irony? Broadcom's wares are at least as important to the artificial intelligence (AI) industry as those of Nvidia or Arista Networks.

Take its Sian3 DSP PHY (digital signal processor physical layer) as an example. The 3-nanometer optical chip is capable of transmitting digital data at up to 1.6 terabytes per second. Its sixth-generation PCIe switches, meanwhile, make it easy to achieve the interoperability of different kinds of hardware and software that most data centers require.

And in January of this year Broadcom unveiled the Brocade G710 24-port 64G switch, which became the data center industry's most power-efficient and lowest-latency SAN (storage area network) switch for data center racks, boasting total bandwidth of up to 1.5 terabytes per second.

If you're a non-techie and don't know what any of this means, it's simple. Broadcom addresses most of the artificial intelligence industry' biggest technological data bottlenecks besides the one created by data centers' core processors (like the ones Nvidia offers).

Image source: Getty Images.

This is no small opportunity either. Broadcom CEO Hock Tan commented in December that he thinks the global market for artificial intelligence processors and their related connectivity technologies could be between $60 billion and $90 billion as soon as 2027, versus Broadcom's 2024 AI-related revenue of $12.2 billion.

The artificial intelligence hardware business that Broadcom is an integral part of, by the way, is expected to expand at an average annual pace of 26.6% through 2034, according to an outlook from Precedence Research.

Roku

Finally, add Roku (NASDAQ: ROKU) to your list of brilliant long-term growth stocks to buy. Roku is, of course, the maker of a popular piece of consumer technology that consumers use to access their subscription-based streaming services. It even makes its own branded televisions.

Although its TVs and dongles aren't sold all over the world, industry research outfit Pixalate reports Roku enjoys a leading 39% share of North America's streaming device market. It's now concentrating on South America where it's gotten some encouraging traction so far.

And yet, it's important to understand that streaming hardware isn't the crux of Roku's business; it's merely a means to an end. The vast majority of this company's revenue and all of its gross profit actually comes from advertising and fees that Roku collects from the streaming service providers in exchange for offering their apps on its platform.

It's also worth adding that Roku operates one of the free-to-watch, ad-supported channels available through its devices. In fact, TV-ratings outfit Nielsen reports The Roku Channel now garners more U.S. viewing time than Paramount's Paramount+, and just a little less than Amazon's Prime. That's impressive.

Roku's growth isn't likely to hold a candle to the sort of growth that the aforementioned Nio or Broadcom are anytime soon, if ever. But don't dismiss the long-term upside of its position within the business. Although the streaming industry's overall growth is stagnating, Roku's role as one of its technological gatekeepers is actually a very big deal.

If nothing else, it means that while streaming content's profitability is under pressure due to its increasingly commoditized nature, this company can at least monetize consumers' never ending desire for entertainment.

Just don't tarry if you're interested. As KeyBanc analyst Justin Patterson explained of his recent upgrade of Roku stock, "Roku is turning the corner" thanks to better advertising solutions and new partnerships (like the recently announced one with Amazon) at a point when advertisers are prioritizing connected-television's reach over traditional cable TV's.

In fact, for perspective, MNTN Research predicts CTV's ordinary ad revenue will grow to the tune of 10% this year, while cable's is expected to fall by 11%.

Should you invest $1,000 in Broadcom right now?

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Arista Networks, Nvidia, Roku, and Tesla. The Motley Fool recommends BYD Company and Broadcom. The Motley Fool has a disclosure policy.