3 Incredible Growth Stocks That Are Now Too Cheap to Ignore

Core Viewpoint - The recent stock market sell-off presents an opportunity to invest in three attractive growth stocks despite ongoing macroeconomic uncertainty [1][2]. Group 1: Alphabet - Alphabet is recognized for its Google search engine and YouTube, boasting over 1 billion monthly users [3]. - The core business, Google Search, remains resilient against competition from AI chatbots, with AI-generated answers monetizing similarly to traditional search results [4]. - Google's advertising business is expected to perform well during economic slowdowns, as advertisers prioritize high-intent ads [5]. - Google Cloud is experiencing strong demand for AI services, with a year-over-year growth of 30% and significant room for margin improvement [6]. - Alphabet's stock is trading at 17.5 times analysts' consensus estimate for 2025 earnings, indicating a favorable valuation for long-term investors [7]. Group 2: DraftKings - DraftKings is a leading online sports betting and iGaming company in the U.S., facing recent stock price declines due to recession fears [8]. - The company added 3.5 million new customers last year, increasing its customer base by 42% to 10.1 million, while reducing customer acquisition costs [9]. - DraftKings benefits from valuable proprietary data, enhancing its ability to set accurate betting lines and target promotions [10]. - The company is focused on data investments and may pursue acquisitions to strengthen its data advantage amid potential market downturns [11]. - Management projects a revenue growth of about 34% for the year, with earnings per share expected to increase more than fivefold this year and another 72% in 2026, while the stock trades at 27.5 times earnings expectations [12]. Group 3: PayPal - PayPal is a pioneer in online digital wallets, with 434 million active accounts as of the end of 2024, benefiting from e-commerce growth [13]. - The company is vulnerable to economic slowdowns, which could disproportionately affect online retail [14]. - Under new CEO Alex Chriss, PayPal is focusing on profitable growth by culling unprofitable merchants, resulting in a 2% growth in unbranded card processing [15][16]. - The company generates significant free cash flow, allowing for regular share repurchases and supporting earnings-per-share growth [16]. - PayPal's stock is trading at a trailing P/E ratio of 15 and a forward P/E of about 12, indicating a low valuation despite macroeconomic risks [17].