Almost any investor can become a millionaire if they start early enough and hold, adding funds consistently. However, it certainly helps to choose top growth stocks that can help that process along. There are plenty of single stocks that have turned individual investors into millionaires, but since you don't know which ones they'll be, instead of hoping to get lucky, you should have a basket of high-potential growth stocks. Nu Holdings(NYSE: NU) and On Holding(NYSE: ONON) are two hypergrowth stocks that are unstoppable and can supercharge your portfolio.
1. Nu Holdings: Hypergrowth banking
Nu is an all-digital bank based in Brazil, and it's growing like a weed. After several quarters of triple-digit percentage revenue growth, it reached a level of scale where the business looks stable and the profits have started rolling in. It's still reporting regular quarterly growth in the high-double digit percentages, along with consistent positive net income.
It's enjoying many growth drivers, and there's no reason to think this will stop anytime soon. If anything, it has built itself up into a formidable player in Latin American banking, and its strength in its industry makes it difficult to challenge.
Brazilian bank customers have historically been beholden to a handful of large and powerful banks that have dominated the sector with strong barriers to entry. Nu got around those barriers by offering something completely different. It has no physical branches, and it raised money from venture capital titans like Warren Buffett's Berkshire Hathaway, which allowed it to develop the technology to create a robust digital platform. It passes on the savings from not having to invest in costly real estate to its members in low fees and higher savings rates, and there's been practically a stampede of people getting onto Nu's platform. As of last year, more than half of the adults in Brazil are members, and that percentage continues to increase, reaching 56% in the 2024 second quarter.
Now that it's well established and highly profitable in Brazil, it's taking its model to new countries in its region. It's adding customers at a fast pace in both Mexico, where it reached 7.8 million in the second quarter, and Colombia, where it's just getting off the ground. Its growth in Mexico is outpacing that in Brazil at the same stage, and that bodes well for its venture in Mexico and beyond.
Nu stock is up about 70% so far this year, and as inflation rates moderate and interest rates come down, its business could accelerate, leading to explosive gains for investors.
2. On Holding: Hypergrowth footwear
On is a Swiss sneaker maker that has catapulted to the top of the athletic footwear scene and is capturing market share, particularly in the upscale market, as it rolls out across the globe. Its has been reliable for strong growth despite competitors like Nike and Lululemon Athletica facing rough terrain and disappointing investors.
The company has developed a full line of premium sportswear and footwear at some of the highest prices on the market, and its line of Cloud products appeal to an affluent class of consumers who are weathering the inflationary climate with more resilience than the mass population. That's leading to high growth under adverse circumstances, and the high prices are leading to expanded margins and robust profits. It has the highest gross margins in the industry at 59.9%, and it's working to increase net income and expand its operating margin as it invests in its growth machine.
This is an exciting moment for On, whose shares are up more than 80% so far this year. Where it has launched, it has become extremely popular and gained loyal fans. However, it's still a minor presence in nearly any market where it operates, giving it years of growth as it develops its business and customers experience its products. It hasn't even reached 50% of brand penetration in its home country of Switzerland, and it has low brand penetration in key, upscale U.S. cities like New York and Dallas.
On top of that, it's getting the hang of constantly bringing out new, innovative products that feature its unique and much-loved CloudTec sole as well as other products that build on its brand and generate greater customer engagement.
Most of retail is still feeling the pinch of inflation, and when people go back to spending, On stock could skyrocket. But more than that, the long-term picture looks very rosy, and On stock could be an attractive candidate for growth investors looking to turn their funds into millions.
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Jennifer Saibil has positions in Nu Holdings. The Motley Fool has positions in and recommends Berkshire Hathaway, Lululemon Athletica, and Nike. The Motley Fool recommends Nu Holdings and On Holding. The Motley Fool has a disclosure policy.
