2 High-Growth Stocks to Buy and Hold for Great Long-Term Potential

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5 hours ago

CoreWeave is a promising stock to use to profit from the growing investment in AI infrastructure services.
Axon stock recently hit new highs as it continues to report growing demand for its public safety solutions.
10 stocks we like better than CoreWeave ›
Investing in fast-growing companies that still have a large opportunity ahead for their products can help you build wealth. Artificial intelligence (AI) and public safety are promising industries to look for investments in 2025. Here are two stocks to ride these megatrends.
AI is expected to add trillions in value to the economy over the long term, but this first requires substantial investment in data centers specially designed to handle AI computing workloads. CoreWeave (NASDAQ: CRWV) is a leader in offering AI infrastructure through the cloud for training models and other advanced workloads at scale.
CoreWeave's revenue has exploded over the last year, growing from $189 million in Q1 2024 to $982 million in Q1 2025. Management expects 2025 revenue to be between $4.9 billion to $5.1 billion.
For a long-term investor, CoreWeave is a unique stock with which to ride the growth of AI. It earns revenue through multiyear contracts or on-demand services, but most of its revenue is through committed contracts. This business model instills steady revenue and growing cash flows over time.
The business is in the process of investing in technology to meet growing demand for its services. It reported a loss of $314 million last quarter. This mostly reflects the high upfront investment it's making in infrastructure, such as Nvidia's graphics processing units (GPUs), to offer its AI cloud platform to customers.
However, CoreWeave is already showing the potential to be a very profitable business down the road. In Q1, its adjusted operating income increased 17% year over year to $163 million. But until it achieves higher margins, investors should expect the stock to be volatile.
This is a world-class AI infrastructure provider that is trading at a price-to-sales multiple of 13 based on management's 2025 guidance. This is based on the company's current market cap (share price times shares outstanding) of $64 billion. Investors buying around this valuation can still expect to earn excellent returns over the next several years.
Axon Enterprise (NASDAQ: AXON) (formerly Taser International) started over 30 years ago selling its Taser energy devices for law enforcement and self-defense. In recent years, the company has transformed into a services company with software solutions. This has grown its addressable market to an estimated $129 billion.
Axon offers cloud-based evidence gathering software and body cameras, which has transformed the business from a device seller to a comprehensive solutions provider for public safety. Revenue from software and services grew 39% year over year to $263 million last quarter.
Taser devices remain a key growth driver for the company. Since launching a few years ago, Taser 10 orders are growing twice as fast as the adoption of Taser 7. This indicates an expanding market for its products, which is a great sign for investors buying shares today. Axon's total revenue grew 31% year over year last quarter to $604 million.
Axon is also benefiting from strong demand for Draft One, a service that uses AI to automatically fill out data entries and police reports. It saves hours of time from manual work, which has made it the fastest-growing software offering in Axon's history.
Taser is potentially vulnerable to risks that investors should be aware of. It generates some revenue from government contracts, making it susceptible to spending cuts and higher compliance costs that could pressure its profit margin. It could also face public backlash and resistance from privacy concerns over its body camera products.
But Axon's history shows that the need for enhanced public safety tools continues to grow. The stock surged to new highs following its first-quarter earnings report, which can be taken as a bullish signal on the company's future.
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John Ballard has positions in CoreWeave and Nvidia. The Motley Fool has positions in and recommends Axon Enterprise and Nvidia. The Motley Fool has a disclosure policy.
2 High-Growth Stocks to Buy and Hold for Great Long-Term Potential was originally published by The Motley Fool