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

Anyone can put together a winning portfolio of stocks that helps them build wealth for retirement. All you have to do is look for companies that are posting high rates of revenue growth and emerging as leaders in a huge market.

To give you some ideas, here are two excellent growth stocks that can deliver above-average returns over the long term.

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1. Shopify

Shopify (NASDAQ: SHOP) is the operating system for e-commerce. It offers a complete suite of tools to open and grow an online business. It still only controls a small share of the e-commerce market, making it a solid growth stock to hold in your retirement account.

Shopify is certainly growing like it has many years of growth in the tank. The company closed 2024 with revenue up 31% year over year in the fourth quarter and 26% for the year. It is dominating with more than 875 million unique online shoppers transacting with a Shopify merchant last year.

The company is solidifying its market lead with new artificial intelligence (AI) tools that make it easier than ever to manage a business online. These tools could help Shopify continue to grow with large merchants that are looking to use AI to improve productivity.

Shopify's growing scale is driving improving profitability, which is a catalyst for the stock. Free cash flow has soared to top $1.5 billion over the last year, and analysts expect improving margins to grow earnings per share by 34% in the coming years.

The massive opportunity, combined with high earnings and free-cash-flow growth, should support the stock's expensive-looking valuation. The shares are not cheap, trading at 56 times this year's earnings estimates, but that's consistent with the stock's historical trading range. Shopify stock has delivered incredible returns over the last 10 years and should remain a rewarding investment.

2. Toast

Toast (NYSE: TOST) offers a cloud-based business management platform for the restaurant industry. Its comprehensive tools include point-of-sale software, payments, staff management, and marketing tools. The company has gained more than 134,000 restaurant locations. But the $1 trillion restaurant industry is still in the early innings of transitioning to cloud-based solutions, providing a long runway of growth.

Toast can grow for many years. The number of locations grew 26% year over year in 2024, yet Toast's share of restaurants in the U.S. stood at just 15%. The company not only added more locations, but also continues to see existing customers adopt more services, as evidenced by its net retention rate of 110%, which is padding the bottom line.

Toast Capital is one service that is seeing strong demand, with more than $1 billion in loan originations made to restaurants last year. These are profitable services that can boost the company's profit margins. In Q4, Toast reported net income of $33 million, reversing a year-ago loss.

Toast can lock in customers with its valuable data. For example, Toast's investments in AI can provide insights to restaurant owners about ways to improve their menu to boost sales. The more data the company collects from various restaurants that utilize its platform, the more formidable its competitive edge becomes.

The stock has returned 47% over the last 12 months and has recently pulled back with the market sell-off. Now is a good time to consider buying some shares, as there is significant growth potential over the next decade.

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John Ballard has positions in Toast. The Motley Fool has positions in and recommends Shopify and Toast. The Motley Fool has a disclosure policy.