Growth stocks can provide investors with extraordinary returns. For those willing to accept a higher level of risk, the rewards can be immense, especially when it comes to companies that have successfully turned things around. Not every struggling growth stock manages a comeback, but when it does, the gains can be extraordinary.
Three companies that were unprofitable just a few years ago and have since become some of the market’s most intriguing growth stories are Palantir Technologies ( PLTR 3.08%), AppLovin ( APP 4.47%), and Carvana ( CVNA 3.63%). Here’s what a $7,000 investment in each of these stocks at the start of 2023 would be valued at today (as of Sept. 18).
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Palantir Technologies: $192,960
Palantir Technologies, a data analytics firm, has surged in popularity among individual investors in recent years. The integration of artificial intelligence (AI) into its platform has fueled tremendous expansion, and CEO Alex Karp has effectively promoted the company’s future prospects.
For the latest quarter, Palantir surpassed $1 billion in quarterly revenue for the first time, representing 48% year-over-year growth. The company also achieved net income of $326.7 million. This marks a significant turnaround from previous years, such as 2022, when it posted a $373.7 million net loss on annual revenue of $1.9 billion.
Since the beginning of 2023, Palantir’s stock has delivered returns exceeding 2,600%. An initial $7,000 investment would now be almost $193,000.
However, this impressive run has driven Palantir’s valuation to lofty heights. The company trades at a price-to-earnings (P/E) ratio above 570, and it holds the highest price-to-sales multiple in the S&P 500. At present, it’s among the priciest stocks investors can buy.
AppLovin: $413,170
AppLovin, a technology company, has outperformed even Palantir in recent years. Leveraging AI to power its advertising technology, AppLovin’s Axon AI platform links advertisers with publishers to optimize ad spending and maximize returns.
The company has posted remarkable growth, with quarterly sales hitting $1.3 billion—a 77% increase over the prior year. Earnings soared 164% to $820 million. Thanks to impressive profit margins, AppLovin has been able to scale effectively, which helps reduce its P/E over time. The stock currently trades at about 90 times earnings, but analysts forecast a forward P/E of 46, which is more reasonable.
Although AppLovin remains expensive, its valuation is more moderate than Palantir’s. Its rapid growth and robust margins may make it a superior investment, though risks are still present. Since 2023, shares have skyrocketed 5,800%, turning a $7,000 stake into more than $413,000.
Carvana: $558,460
Often, the greatest rewards are found where risk is highest. Just a few years ago, Carvana—an online platform for trading used cars—was believed to be at risk of bankruptcy. With heavy debt, high costs, and tough macroeconomic headwinds, investors faced significant danger if they bought in at the start of 2023.
Yet, Carvana’s fortunes have reversed dramatically. Its restructuring has succeeded, and renewed enthusiasm for meme stocks has attracted retail investors. In the June quarter, Carvana reported a $308 million profit on $4.8 billion in revenue, a 42% year-over-year growth. That’s a stark shift from 2022, when it suffered a nearly $1.6 billion net loss for the year, even with more than $13.6 billion in sales.
Carvana’s business model still carries considerable risk—its margins are razor thin, and further economic challenges, such as tariffs, could reduce demand. Since 2023, the stock has returned over 7,800%, meaning a $7,000 investment would now be worth close to $559,000.
Altogether, putting $7,000 into each of these three companies at the start of 2023 would have grown your portfolio to more than $1.1 million in less than three years.
