2 Growth Stocks to Buy and Hold for the Long Term

Market volatility comes and goes, but anyone can build a substantial nest egg in the stock market over many years by steadily adding shares of growing businesses to their portfolios, and patiently holding them.

Here are two top growth stocks that are trading well below their recent highs and that should be rewarding investments over the next decade.

1. Meta Platforms

Meta Platforms (NASDAQ: META) is a competitively strong business, with more than 3.4 billion people using at least one of its social media apps every day. This large base of users generates hundreds of billions of dollars in annual advertising revenue, which allowed the company to earn $66 billion in profit over the last year. The stock trades at a reasonable valuation, and the company continues to funnel its resources into new opportunities and technologies that it believes will drive more growth.

Image source: Getty Images.

Meta's investments in artificial intelligence (AI) are helping increase user engagement on its apps by recommending more relevant content and helping advertisers improve ad targeting and placement. Revenue continued to grow at double-digit percentage rates in the first quarter, rising by 16% year over year, while its net profit soared by 35%.

CEO Mark Zuckerberg sees five key growth opportunities in the areas of improved advertising, better experiences, Meta AI, AI-powered devices, and business messaging. There's a lot of opportunity ahead for Meta Platforms. It plans to spend a minimum of $64 billion on capital expenditures this year, up from $37 billion in 2024, to support the growth of the business.

Meta has a great track record of translating its capital spending plans into shareholder returns. The stock has delivered market-beating returns over the last decade primarily because the business earns high returns on its investments. Moreover, Zuckerberg suggested that the company will not need all of its investments to be successful for the stock to reward investors.

One opportunity for Meta that seems promising is business messaging, which is seeing tremendous usage in countries like Thailand, where the cost of labor is low. Zuckerberg believes that AI will lower the cost of using messaging-based business operations in larger economies like the U.S., opening up a huge revenue opportunity.

Thailand ranks as one of the company's top 11 markets by revenue, largely due to businesses relying on Meta's messaging apps, even though it has a relatively small economy.

The stock trades at a reasonable multiple of 23 times this year's expected earnings. Meta Platforms should continue to grow earnings at double-digit percentage rates annually given the opportunities ahead of it, and that could lead to market-beating returns.

2. Reddit

Another advertising-based platform that is seeing strong growth is Reddit (NYSE: RDDT). It ended the first quarter with 108 million daily active unique users, up 31% year over year.

Reddit's stock soared following its initial public offering in March 2024, and again later in the year. But it began to plunge in February, and is now down by more than 50% from its peak. And based on the strong first-quarter results the company reported on May 1, that decline has created a great buying opportunity.

The value that Reddit brings users on the web is driving strong demand from advertisers. Revenue surged 61% year over year last quarter, and the company converted those revenues into a healthy operating cash flow margin of 33%. This is the look of a promising growth investment.

Reddit is just tapping into its long-term potential. International ad revenue grew by 82% year over year in Q1 -- its highest growth rate in three years. There's massive upside for Reddit, as more than half of its users are outside the U.S., yet international markets only contribute 20% to the company's revenue.

Reddit should be successful as it is emerging as a primary destination for people looking for information on products they are shopping for. This high-purchase-intent user base is what makes the platform so appealing to advertisers.

Another factor that should drive more growth for the business is that Reddit's discussion threads are easy to discover on the web, not locked away within an app. This makes Reddit content easily discoverable by search engines.

Near-term uncertainties about the outlook for the U.S. economy could lead to more volatility for stocks of ad-based businesses. But long-term investors in Meta Platforms and Reddit should see the value of their investments grow over the next decade.

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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Meta Platforms. The Motley Fool has a disclosure policy.