These two growth stocks have outperformed the market this year.
They are leaders in their niche and enjoy competitive advantages.
Both are improving their businesses and setting medium-term goals that could improve performance.
10 Stocks We Like More Than Veeva Systems ›
Veeva Systems(NYSE: VEEV) and Spotify technology(NYSE: SPOT) have been excellent this year, with returns above average of better than 40 percent. And while some investors may feel like they’ve missed the boat, the good news is that these niche leaders still have plenty of upside left. Veeva Systems and Spotify are looking for opportunities to keep that momentum going, though not necessarily continuously, for at least the next few years. Here’s more on these top growth stocks.
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The leaders of the cloud computing market are some of the largest and most successful companies in the world. Competing in this industry is tough, especially for a smaller player. But Veeva Systems is enjoying great success because of a great strategy. Instead of trying to go toe to toe with giants like AmazonVeeva Systems has built cloud services to meet the needs of one industry: life sciences.
Drugmakers and medical device makers must adhere to strict guidelines — from regulatory compliance to data integrity and patient privacy — or risk losing business, failing to bring products to market, facing lawsuits or the wrath of lawmakers. Veeva Systems meets these needs. As a result, it has become the primary cloud service provider for many of the largest pharmaceutical companies. And this year, the stock has significantly outperformed the market thanks to solid financial results. Veeva Systems has achieved its goal of 2025. earn 3 billion dollars.
Veeva Systems has made a habit of setting and achieving these forecasts, sometimes ahead of schedule. In a market where some CEOs overpromise and undercommit, Veeva Systems’ ability to deliver on its projections is noteworthy. Management has set a new target for 2030. to double the company’s revenue, which would require nearly a 15% compound annual growth rate over that period.
Veeva Systems is able to do this because of its leadership in its niche and continuous innovation, including a new industry-specific agent-based artificial intelligence (AI) platform called Veeva AI, which will help life sciences companies further increase efficiency by automating certain tasks. In addition, Veeva Systems benefits from high switching costs, which should help it maintain its leading position in this niche.
Veeva Systems is the fastest-growing stock you can hold in your portfolio for the next five years (and likely beyond).
Spotify has the upper hand in the competitive music streaming market. The company continues to make progress in expanding its ecosystem, and overall users and paying subscribers are still moving in the right direction. Revenue is also there, and while Spotify isn’t consistently profitable yet, the company has made great strides in that department over the past few years.
SPOT Revenue (Quarterly) data by YCharts
That’s why Spotify may still have a lot of upside. First, it still has huge potential to convert advertised users into paying users, which it has done well over the years. Second, Spotify has set a target of 2030. reach 1 billion monthly active users (MAU). The company is not that far from that goal. It ended the third quarter with 713 million MAUs, up 11% year over year. If I were a betting man, I’d put money on Spotify breaking the 1 billion mark by 2030.
Third, the company has created a deep network effect. Artists looking for a big audience know where to go because no music streaming platform has more subscribers. On the other side of the equation, customers benefit from having a huge music library thanks to Spotify’s deals with record labels. And the more users there are on the platform, the more attractive it is to record companies. Finally, Spotify has made efforts to improve the platform through AI initiatives, including an AI DJ that helps increase engagement and can increase ad revenue.
Spotify in 2025 has beaten the market due to excellent financial performance and may give more excellent returns after next year.
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Prosper Junior Bakiny has positions in Amazon. The Motley Fool has positions in and recommends Amazon, Spotify Technology and Veeva Systems. The Motley Fool has a disclosure policy.
Top 2 stocks to add to your portfolio in 2026 and later, were originally published in The Motley Fool
