Here’s How a $10,000 TFSA Could Eventually Grow Into $100,000

Here’s why TFSA investors should consider owning quality growth stocks such as Uber in their portfolio right now.

Given the tax-sheltered status of the Tax-Free Savings Account (TFSA), Canadian investors should consider allocating a portion of their contribution room toward quality growth stocks. Typically, growth stocks deliver outsized gains during bull runs, allowing you to outpace the broader markets comfortably. Moreover, the ongoing pullback enables you to buy quality stocks at a lower multiple.

The cumulative TFSA contribution room has risen to $102,000 in 2025. So, investors with a higher risk appetite can allocate around $10,000 to fundamentally strong growth stocks in March 2025 and see their portfolio grow to $100,000 over time.

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Alphabet stock has returned 1,000% to long-term shareholders

Valued at a market cap of US$2 trillion, Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG) is among the largest companies globally. The tech giant leads several business segments, such as online search and public cloud. An investment of $10,000 in GOOGL stock back in March 2012 would be worth more than $100,000 today.

The growth story for Google’s parent company is far from over, given it is forecast to increase revenue from US$350 billion in 2024 to US$433 billion in 2026. Comparatively, adjusted earnings are forecast to expand from $8.04 in 2024 to $10.23 in 2026. So, priced at 16 times forward earnings, the tech stock is relatively cheap and trades at a discount of 34% to consensus price targets.

While GOOGL stock has significant upside potential, given its massive size, it is unlikely to replicate its historical gains. Instead, investors should consider gaining exposure to companies, such as Uber (NYSE: UBER), that have solid long-term potential.

Is the tech stock undervalued?

With a market cap of US$158 billion, Uber is much smaller compared to Alphabet. The ride-hailing giant has a vast international presence, which offers shareholders geographical diversification. In the fourth quarter (Q4) of 2024, Uber reported stellar results as gross bookings exceeded estimates, driven by product innovation across verticals. Its gross bookings rose by 21%, while mobility services grew by 24% in Q4.

Uber’s multi-product strategy continues to pay dividends, with 37% of users utilizing multiple services, up 300 basis points year over year. These cross-platform users spend 3.5 times more than single-product users. Further, Uber One membership surged to 30 million members, up nearly 60% compared to last year.

Looking ahead, Uber expects Q1 gross bookings growth of between 17% and 21% on a constant currency basis, despite headwinds from foreign exchange rates and weather disruptions.

Uber continues to focus on autonomous vehicles (AV), calling it a US$1 trillion market opportunity. This positions the company as the indispensable go-to-market partner for AV players, including Alphabet and Tesla.

Uber outlined five critical factors for autonomous commercialization: regulatory approval, superhuman safety records, cost-effective hardware platforms, on-the-ground operations, and high-utilization networks.

Insurance costs, a persistent challenge for Uber’s U.S. mobility business, are showing signs of moderation, with executives forecasting high single-digit increases per trip in 2025, significantly lower than the past two years.

Uber’s revenue is forecast to increase from US$44 billion in 2024 to US$57.6 billion in 2026. Comparatively, free cash flow is forecast to improve from US$6.89 billion in 2024 to US$10.11 billion in 2026. So, priced at 7.6 times forward FCF, Uber trades at a 20% discount to consensus price targets.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool recommends Alphabet, Tesla, and Uber Technologies. The Motley Fool has a disclosure policy.

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