Investing in growth stocks can be an excellent way to get the kind of multiplied returns that one can only dream of when investing in the stock market. However, stock market investing is risky. If you simply throw money into the market without learning how to choose and invest in growth stocks, you might be setting yourself up for failure.
Yes, stock market investing is inherently risky. When it comes to growth stocks, it gets even riskier. That said, knowing how to identify the right companies to invest in can help you succeed. Companies that are investing in developing new products and services to strengthen their positions can provide exceptional returns in the long run.
While not without risks, there are companies that have already done that and have the potential to deliver more growth. Today, I will discuss two such stocks you can consider adding to your self-directed investment portfolio.
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Celestica
Celestica (TSX:CLS) is a $38.45 billion market-cap Canadian company providing tech-based supply chain solutions. The company offers the potential of superior returns for investors, backed by the solid demand for its reliable design, manufacturing, and supply chain solutions for various industries. The artificial intelligence (AI) industry is huge and growing at an enormous pace. Exposure to this market segment has been a major tailwind for the company in the last few years.
Companies worldwide are increasing their investments in expanding AI infrastructure. Celestica has positioned itself to benefit from the demand with its capabilities of providing storage, computing, and networking products to serve the industry. The company is also innovating new products to meet the growing and changing needs of its clients, further strengthening its position. As of this writing, CLS stock trades for $334.23 per share.
Shopify
Shopify (TSX:SHOP) is not an unknown name for anyone who has been investing in the stock market for the last few years. Right around the pandemic, Shopify emerged as a major force in the ecommerce sector. The $268.76 billion market-cap tech company offers an ecommerce platform that lets merchants of all sizes build an online presence. This includes digital storefronts and fulfillment, payment, and shipping services.
Amid the pandemic, the need for such providers accelerated the growth of this company. Briefly, Shopify became the biggest TSX stock by market capitalization. While its share prices have normalized to more sustainable levels, there is plenty of growth on the cards. Utilizing AI integration, Shopify is improving its offerings, from better user experience to enhanced production capabilities and better operational efficiencies. As of this writing, Shopify stock trades for $206.84 per share.
Foolish takeaway
It is important to remember that, while the two TSX stocks have already delivered multi-bagger returns, it is not guaranteed that we will see a repeat of the same feat. At current levels, early investors were the ones who enjoyed such returns.
Considering the demand for the services that the tech stocks offer, there is a solid potential to see similar returns in the future. However, there will always be a risk of downturns and pullbacks. For those who remain invested during turbulent times, the discipline might pay off in substantial long-term returns. That said, taking unnecessary risks without balancing your portfolio might be foolish with a lower-case f.
