Investors are constantly on the lookout for “multi-bagger” stocks that generate outsized gains over time. Here, it’s imperative to identify stocks that are growing at a fast clip, and expanding revenue and profit margins at a consistent pace.
Moreover, if Canadians can hold these growth stocks in a TFSA (Tax-Free Savings Account), any returns in the form of dividends and capital gains will be sheltered from Canada Revenue Agency taxes.
The TFSA contribution room for 2023 has increased to $6,500, which can be deployed to create a diversified portfolio of growth stocks. These two tech stocks can help you turn $6,500 into $60,000 by 2030.
Snowflake stock
Snowflake (NYSE: SNOW) offers enterprises a platform called the Data Cloud to mobilize data at scale. Here, companies can unite their siloed data to execute diverse analytic workloads.
Snowflake ended fiscal Q1 of 2024 with a net revenue retention rate of 151%, suggesting that customers increased spending by 51% in the last 12 months. A high customer engagement rate has allowed Snowflake to increase revenue from US$265 million in fiscal 2020 (ended in January) to US$2.1 billion in fiscal 2023.
Analysts tracking the stock expect its sales to rise to US$2.8 billion in fiscal 2024 and US$3.6 billion in fiscal 2025. Snowflake expects its total addressable market to grow more than double from US$140 billion in CY 2022 to US$290 billion in CY 2027, providing the company with enough room to expand its top line.
Around 330 organizations now spend at least US$1 million annually on the Snowflake platform, up from 185 in fiscal 2022 and just 80 in fiscal 2021.
Due to its asset-light model, Snowflake is on track to improve profit margins in the upcoming years. For instance, its free cash flow margin is forecast to widen from 12% in 2022 to 30% in 2029. Its non-GAAP (generally accepted accounting principles) product gross margins have also improved from 69% to 75% in the last two years.
Hut 8 Mining stock
Investors bullish on Bitcoin and Ethereum can consider investing in Hut 8 Mining (TSX: HUT). Valued at a market cap of $1 billion, Hut 8 stock is trading 77% below all-time highs, allowing you to buy the dip.
Hut 8 mines Bitcoin, which means its share price is tied to the performance of the digital asset. During the last crypto bull run, Hut 8 stock rose from $1 in December 2019 to $19 in November 2021.
Hut 8 Mining also acquired a high-performance computing business in early 2022, further diversifying its revenue base.
In Q1 of 2023, Hut 8 reported revenue of $19 million, compared to $53.3 million in the year-ago period. It mined 475 BTC in the March quarter earning $14.5 million. In Q1 of 2022, the company mined 942 BTC to earn $49.3 million.
The next BTC bull run is forecast to begin in mid-2024, and the digital asset might surge past US$150,000 by November 2025, according to the stock-to-flow model. In the case these predictions are correct, you can expect Hut 8 stock to reclaim record highs and easily surge over 500% in the next two years.
