The 3 Best Growth Stocks to Buy in August

Stocks to buy

Many stocks are soaring coming out of their second-quarter earnings, and analysts and investors look toward significant upcoming catalysts for certain companies and their share prices. Most of these are growth stocks, securities of companies that continue to grow quickly and take market share from competitors. As these companies become increasingly dominant in their sector, their shareholders are rewarded with gains that are trouncing the broader market’s returns. Some growth stocks have more than doubled their price this year, and despite the massive gains, analysts see more runway ahead. With stock markets traditionally performing best in the final quarter of the calendar year, there is a good reason for investors to load up on equities in August before markets gallop higher through the autumn and the year-end holidays. Here are the three best growth stocks to buy in August.

DraftKings (DKNG)

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The stock of online betting and fantasy sports company DraftKings (NASDAQ:DKNG) continues to run hot following its recent second-quarter earnings report. The Boston-based company announced that the number of unique monthly users on its betting platform rose 44% in Q2 from a year earlier. The company’s loss per share of 17 cents beat estimates of a 25 cent per share loss, and its Q2 revenue of $875 million was higher than consensus forecasts by $112 million.

The bottom line is that sports betting in the U.S. is growing in popularity, and DraftKings is leading the way. The strong Q2 print led DraftKings to raise its forward guidance, saying it now expects full-year revenue in a range of $3.46 billion to $3.54 billion, up from a previous range of $3.14 billion to $3.24 billion. DKNG stock has been on a big run this year, having risen more than 180% since January. The NFL football season that starts September 8 is expected to be a major catalyst, making this one of the best growth stocks to buy in August.

Advanced Micro Devices (AMD)

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The stock of microchip and semiconductor company Advanced Micro Devices (NASDAQ:AMD) is recovering nicely after initially dipping following its Q2 financial results. Since announcing the Q2 print on August 1, AMD stock has gained 8% and looks to continue on the growth trajectory, with the share price up 85% year to date. Despite the initial selloff, AMD’s Q2 print was strong, beating Wall Street forecasts on the top and bottom lines.

AMD announcing an 18% year-over-year revenue decline due to an ongoing slump in personal computer (PC) sales had spooked investors and analysts. But the company’s growth trend remains positive, and its focus on chips and semiconductors that enable artificial intelligence (AI) applications positions it well to capitalize on the technology. The company just released its new MI300X chip to help build and run AI chatbots such as ChatGPT and is expected to power sales going forward. This is for sure a top growth stock for August.

Alphabet (GOOG / GOOGL)

Source: IgorGolovniov /

Speaking of exposure to AI, how about Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL)? The Google parent company saw its stock jump 7% higher immediately after it reported better-than-expected Q2 results, bringing its year-to-date gain to 46%. Driven largely by growth in its cloud-computing unit, Alphabet reported earnings per share (EPS) of $1.44 versus $1.34, which had been forecast on Wall Street. Revenue for the quarter ended June 30 came in at $74.60 billion compared to $72.82 billion that analysts had forecasted.

However, GOOGL stock is primarily driven higher by expectations surrounding its global leadership in AI. In mid-July, the company’s share price jumped 5% higher in a single trading session on news that Alphabet had expanded its AI chatbot, called “Bard,” to Europe and Brazil. The launch of Bard across the European Union had been held up by regulators who voiced privacy concerns. Now, Alphabet has overcome those concerns, leading to the growth of its chatbot.

On the date of publication, Joel Baglole held a long position in GOOGL. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.

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