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2 Brilliant Growth Stocks to Buy Now and Hold for the Long Term | The Motley Fool

2 Brilliant Growth Stocks to Buy Now and Hold for the Long Haul

In the ever-evolving landscape of the stock market, identifying growth stocks that not only promise short-term gains but also offer substantial long-term potential is a pursuit that savvy investors constantly engage in. As we look ahead to 2025 and beyond, the investment world is buzzing with opportunities in sectors like artificial intelligence, cybersecurity, and renewable energy. A recent analysis highlights two standout companies that embody the essence of "brilliant" growth stocks—those with innovative business models, strong competitive moats, and the ability to compound returns over years, if not decades. These picks are not just about riding the next market wave; they're about building wealth through sustained innovation and market dominance. Let's dive into why these two stocks—Palantir Technologies (PLTR) and CrowdStrike Holdings (CRWD)—are recommended for investors to buy now and hold indefinitely, based on their robust fundamentals, market positioning, and growth trajectories.

Starting with Palantir Technologies, this data analytics powerhouse has been making waves since its public debut in 2020. Founded by Peter Thiel and a team of tech visionaries, Palantir specializes in big data software platforms that help organizations make sense of vast amounts of information. Its flagship products, Gotham and Foundry, are used by governments, corporations, and nonprofits to uncover insights, predict outcomes, and streamline operations. What sets Palantir apart is its deep roots in artificial intelligence and machine learning, which have positioned it as a key player in the AI boom. In recent quarters, the company has reported impressive revenue growth, with Q2 2024 figures showing a 27% year-over-year increase to $678 million, driven largely by its commercial segment. This diversification beyond government contracts—historically a major revenue source—signals a maturing business model that's less reliant on volatile public sector spending.

Palantir's growth story is compelling for several reasons. First, the explosion of data in the digital age creates an insatiable demand for tools that can process and analyze it effectively. Palantir's software doesn't just store data; it integrates disparate sources, applies AI algorithms, and delivers actionable intelligence in real-time. This has led to high-profile wins, such as partnerships with major enterprises like Airbus and BP, where Palantir's platforms optimize supply chains and enhance decision-making. Moreover, the company's foray into the commercial market has been turbocharged by its AI Platform (AIP), launched in 2023, which allows businesses to build custom AI applications without needing extensive coding expertise. Analysts project that this could open up a multi-billion-dollar market opportunity, especially as more companies adopt AI to stay competitive.

Financially, Palantir is on solid footing. It achieved profitability in 2023, a milestone for a growth-oriented tech firm, with net income reaching $210 million in the last fiscal year. Its gross margins hover around 80%, reflecting the high-margin nature of software sales. The stock's forward price-to-earnings (P/E) ratio, while elevated at around 80, is justified by expected earnings growth of over 40% annually through 2026, according to consensus estimates. Risks exist, of course—geopolitical tensions could impact government contracts, and competition from giants like Microsoft and Snowflake is fierce. However, Palantir's proprietary technology and sticky customer relationships (with retention rates above 90%) provide a formidable moat. For long-term holders, the thesis is clear: as AI becomes ubiquitous, Palantir's role in enabling it will drive exponential value. Buying now, amid any market dips, positions investors to benefit from what could be a decade-long growth arc, potentially turning a modest investment into a significant nest egg.

Shifting gears to CrowdStrike Holdings, this cybersecurity leader exemplifies resilience and innovation in an increasingly digital world fraught with threats. Founded in 2011, CrowdStrike pioneered the endpoint detection and response (EDR) space with its Falcon platform, which uses cloud-native architecture and AI to prevent, detect, and respond to cyber attacks in real-time. Unlike traditional antivirus software, CrowdStrike's solution is proactive, leveraging machine learning to identify anomalies and stop breaches before they escalate. The company's relevance has never been higher, especially following high-profile cyber incidents like the SolarWinds hack and the rise of ransomware attacks, which have underscored the need for advanced security measures.

CrowdStrike's financial performance has been nothing short of stellar. In its fiscal 2024 (ended January 31, 2024), revenue surged 36% to $3.06 billion, with subscription revenue—its core business—growing even faster at 37%. This momentum continued into Q1 of fiscal 2025, with a 33% revenue jump and annual recurring revenue (ARR) reaching $3.65 billion. The company's ability to upsell additional modules to existing customers is a key growth driver; its net retention rate stands at an impressive 119%, meaning clients are spending more over time. CrowdStrike now serves over 23,000 customers, including 62% of the Fortune 100, demonstrating its penetration into blue-chip enterprises.

What makes CrowdStrike a brilliant growth stock is its expansive total addressable market (TAM), estimated at over $100 billion and growing. The shift to remote work, cloud computing, and IoT devices has expanded the attack surface for cybercriminals, creating ongoing demand for CrowdStrike's services. Recent expansions, such as the acquisition of Humio for log management and the launch of Falcon XDR for extended detection, broaden its offerings beyond endpoints to encompass identity protection, cloud security, and threat intelligence. AI integration is a game-changer here too—CrowdStrike's Charlotte AI assistant automates threat hunting, reducing response times dramatically.

Valuation-wise, CrowdStrike trades at a forward P/E of about 70, which might seem steep, but it's backed by projected revenue growth of 25-30% annually and expanding margins. The company turned profitable in 2023, with operating margins improving to 15% in the latest quarter. Potential headwinds include intense competition from players like Palo Alto Networks and Microsoft, as well as the risk of a major security failure that could damage its reputation. However, CrowdStrike's track record—preventing breaches for high-stakes clients—and its cloud-first approach give it an edge in a market where legacy systems are being phased out.

For investors, the buy-and-hold case for both Palantir and CrowdStrike rests on their alignment with megatrends: the AI revolution and the cybersecurity imperative. These aren't speculative bets; they're companies with proven models, recurring revenue streams, and scalable platforms. Palantir's data mastery complements CrowdStrike's security prowess, offering diversified exposure to tech growth. In a world where data is the new oil and cyber threats are perpetual, these stocks could deliver compounded annual returns exceeding 20% over the next decade, based on historical growth stock precedents like Amazon or Salesforce during their ascent phases.

To maximize returns, consider dollar-cost averaging into these positions during market volatility, which often presents buying opportunities. Avoid the temptation to trade short-term; the real magic happens with patience. As Warren Buffett advises, invest in businesses you understand and believe in for the long term. Palantir and CrowdStrike fit that bill perfectly, poised to thrive amid technological advancements and global digital transformation. Whether you're a seasoned investor or just starting, adding these to your portfolio now could be a decision that pays dividends—literally and figuratively—for years to come.

In summary, these two brilliant growth stocks represent the pinnacle of innovation-driven investing. By focusing on their strong fundamentals, market leadership, and future potential, investors can position themselves for substantial wealth creation. The key is to buy with conviction and hold through the inevitable ups and downs, letting time and compounding work their wonders. (Word count: 1,048)

Read the Full The Motley Fool Article at:
[ https://www.fool.com/investing/2025/07/29/2-brilliant-growth-stocks-to-buy-now-and-hold-for/ ]